450:
31:
379:
clause, allowing an arbitral tribunal to decide arbitrability. Thus, by agreeing to the AAA rules, the parties had agreed to delegate the question of arbitrability to the arbitrator. Archer & White responded that this was not a clear delegation of authority because their arbitration clause included "cut-outs"—specific types of claims that they did not agree to subject to arbitration. The
570:, but the American Law Institute (ALI) has voiced their opinion that they do not qualify as such. The ALI argues that although these types of clauses grant jurisdictional authority to an arbitrator, they do not exclude or disclaim the authority of courts to rule on the question, and therefore courts may still rule on arbitrability. In the
545:, however, the Court explicitly stated, "We express no view about whether the contract at issue in this case in fact delegated the arbitrability question to an arbitrator." The question of whether these general adoptions of arbitration rules qualified as valid delegations of arbitrability was not addressed by the Supreme Court.
423:
position of Archer & White that a judge could simply skip the step of determining whether the parties delegated arbitrability by making a "wholly groundless" determination about the merits of arbitrability. Commentators predicted that the Court would strike down the "wholly groundless" exception.
314:
In the decades preceding this case, the U.S. Supreme Court issued a number decisions that were widely seen as favoring the use of arbitration through an expansive reading of the
Federal Arbitration Act (9 U.S.C. § 1 et seq.). By the end of the twentieth century, arbitration, once disfavored by courts
468:, the Supreme Court reiterated these previous decisions, holding that courts must respect clear and unmistakable delegations of arbitrability to an arbitrator, and may not circumvent those delegations by weighing the merits of the arbitrability question itself. It pointed to relevant language in the
557:
to answer these broader question about when a delegation clause is "clear and unmistakeable." Arbitration clauses often incorporate the rules of an arbitration organization (like AAA), and those rules generally include a competence-competence clause. Whether these types of clauses qualify as "clear
472:
case, stating, "We have held that a court may not 'rule on the potential merits of the underlying' claim that is assigned by contract to an arbitrator, 'even if it appears to the court to be frivolous.' Reaffirming these cases, the Court struck down the Fifth
Circuit's "wholly groundless" exception
1289:
No. 17-1272, at page 2 ("Although a majority of courts have found the incorporation of rules containing such a provision to satisfy First
Options’ “clear and unmistakable” evidence test, the ALI’s Restatement of the U.S. Law of International Commercial and Investor-State Arbitration has concluded,
574:
case, this question was addressed by the district court and the Fifth
Circuit, but the Fifth Circuit ultimately declined to make a final ruling on the question and the issue was not addressed by the Supreme Court. Given the prevalence of these clauses in arbitration agreements, arbitration experts
422:
on the case on
October 29, 2018. At oral argument, some of the justices expressed concern at the suggestion by counsel for Henry Schein that a dispute should be sent to an arbitrator when it was clear that the arbitrator lacked jurisdiction on the dispute. But even more concern was shown for the
383:
had previously held that very similar provisions incorporating the AAA rules were clear delegations of arbitrability, and it had even held that similar cut-outs did not defeat the effect of these provisions. In this case, however, the Fifth
Circuit believed that the intersection of the particular
378:
Henry Schein argued, based on the language in the contract, that the parties agreed to have the arbitrator decide whether the dispute should be decided through arbitration. The contract contained an agreement to arbitrate under the rules of AAA, and the AAA rules contain a "competence-competence"
1258: Feb. 13, 2019) ("Considering the Supreme Court's interpretation of the similar arbitration clause in Henry Schein, Inc. in light of the Federal Arbitration Act, the court concludes that an arbitrator must determine the arbitrability of the defense to the intellectual property claims.").
492:
Circuits had previously recognized the "wholly groundless" exception to an otherwise valid delegation of arbitrability. These appellate courts believed it would be wasteful and absurd to send a dispute to an arbitrator only to have the arbitrator send the parties back to court because they lack
409:
the ruling to the United States
Supreme Court, arguing that the "wholly groundless" exception violates the Federal Arbitration Act. Since the Fifth Circuit declined to rule on whether the delegation of arbitrability was valid, only ruling on the "wholly groundless" exception was appealed to the
832:
The
Seventh Amendment to the United States Constitution reads: "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than
392:
Archer & White advanced an alternative argument that even if the delegation was valid, the argument for arbitration was "wholly groundless." The Fifth
Circuit Court of Appeals, along with the Sixth Circuit and the Federal Circuit, had previously held that even if parties clearly delegate
397:
ruled for Archer & White on the "wholly groundless" exception, finding that no reasonable arbitrator could find this case subject to arbitration, and therefore the question of whether the parties delegated the arbitrability decision to an arbitrator was irrelevant. The Fifth
Circuit
439:
case, the Court wrote: "...the question of arbitrability...is undeniably an issue for judicial determination. Unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator." In
315:
as an inferior form of dispute resolution, had become commonplace. Arbitration agreements and awards are now routinely honored by federal courts. Disputes about arbitration are still common in United States courts, however, for two primary reasons: First, the right to a
154:
The Fifth Circuit's "wholly groundless" exception to a valid delegation of arbitrability is inconsistent with the Federal Arbitration Act. Where parties have clearly delegated decisions on arbitrability to an arbitrator, courts must defer to the arbitrator on those
426:
The opinion in the case was released on January 8, 2019. It was a unanimous (9-0) opinion written by Justice Brett Kavanaugh, his first opinion from the Supreme Court bench. The opinion was based on a series of previous Supreme Court decisions. In
384:
cut-outs at issue and grounds for the underlying dispute made the question of delegation difficult. Finding that the case could be resolved through an exception, they declined to answer the question of whether the delegation was valid.
319:
is fundamental in the United States, so courts need confirmation that individuals have freely agreed to relinquish that right before compelling arbitration. Second, arbitration is believed by many to favor large organizations and
360:
in the sales contract, even though they were not a signatory to the Pelton and Crane contract, invoking the Federal Arbitration Act. Archer & White argued that their dispute was not subject to arbitration because one of the
300:), and therefore a valid delegation of arbitrability should be honored even if a court believes the argument for arbitration to be "wholly groundless." It was Justice Kavanaugh's first Supreme Court opinion.
525:
gave rise to some confusion; some observers surmised the Court had determined the arbitration clause incorporating AAA rules to be a valid delegation of arbitrability. At least one federal case (
356:." Eventually, the business relationship deteriorated, and Archer & White sued Danaher and Henry Schein for violations of antitrust law. Henry Schein moved to compel arbitration based on the
1321:
1101:
882:
1317:
Adrienne Scheffey and Robert Friedman, "Supreme Court Eliminates the 'Wholly Groundless' Exception to Arbitration Agreements, Reinforcing the Force of Delegation Provisions," January 14, 2019
663:
1307:
344:
Archer & White Sales, a small dental distribution business, entered into a contract with Pelton & Crane a Danaher company] to buy Pelton and Crane dental equipment. Their
1391:
435:, 475 U.S. 643, the Court explicitly noted that parties could delegate arbitrability, but held that the arbitrability determination should typically be made by a court. In the
983:
701:
509:. Courts may not skip that step by "peeking" at the merits of the arbitrability question and deciding that the claim in favor of arbitration is "wholly groundless."
718:
431:, 561 U.S. 63, the Court held that parties could agree to delegate decisions on specific issues to arbitrators, and that courts must respect those delegations. In
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1177:
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1129:
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755:
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had agreed arbitrate certain issues, have given rise to court decisions outlining fine-grained distinctions about which disputes are subject to arbitration.
79:
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1016:
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arbitrability to an arbitrator, a court can decide refuse to let the case go to arbitration if the argument for arbitration is "wholly groundless." The
844:
1067:
1396:
1386:
1017:"Supreme Court Eliminates the "Wholly Groundless" Exception to Arbitration Agreements, Reinforcing the Force of Delegation Provisions"
446:, 514 U.S. 938, the Court again held that parties could delegate arbitrability, and reinforced the "clear and unmistakable" standard.
521:
was cited by several courts as strengthening the right of parties to delegate arbitrability to an arbitrator. The narrow holding in
1308:
Ronald Mann, "Opinion analysis: Kavanaugh’s first opinion rejects vague exception limiting enforcement of arbitration agreements,"
1172:
442:
292:, the court sided with petitioner Henry Schein, Inc., holding that the "wholly groundless" exception to arbitrability violates the
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clarified a split in the federal courts of appeals about the arbitrability of disputes. Only the courts of appeals for the Fifth,
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further clarified these questions by eliminating one possible exception to the Supreme Court's previous arbitrability decisions.
126:
122:
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to the AAA arbitration clause case at hand in concluding that it was a clear delegation of arbitrability to the arbitrator. In
1215:
1102:"Argument analysis: Justices signal opposition to vague exceptions that would limit enforceability of arbitration agreements"
911:
324:" who can force their counterparts (sometimes consumers or employees) into arbitration agreements through their superior
269:
on January 8, 2019. The case decided the question of whether a court may disregard a valid delegation of arbitrability—a
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735:
419:
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35:
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included the following language: "Any dispute arising under or related to this Agreement (except for actions seeking
353:
309:
288:—when the argument in favor of arbitration is "wholly groundless." In a unanimous (9-0) opinion written by Justice
1251:
883:"US Supreme Court's Decision in Henry Schein Inc. v. Archer and White Sales Inc. is Not as Clear as Everyone Says"
664:"Supreme Court Decides First Arbitration Case on Its Docket – Henry Schein, Inc. v. Archer & White Sales, Inc"
325:
679:"Statutory Misconstruction: How the Supreme Court Created a Federal Arbitration Law Never Enacted by Congress"
1322:
Steven K. Davidson, Michael J. Baratz, Jared R. Butcher, Molly Bruder Fox, "US Supreme Court's Decision in
63:
678:
1068:
https://www.supremecourt.gov/DocketPDF/17/17-1272/38293/20180309094624854_Danaher%20cert%20petition.pdf
449:
562:
is hotly contested. Many lower federal courts have found such clauses to be valid delegations under
984:"Argument preview: Justices to mull who decides whether to arbitrate – the judge or the arbitrator"
293:
273:
252:
1363:
1201:
575:
anticipate that the Supreme Court will eventually address the question they left unanswered in
352:...), shall be resolved by binding arbitration in accordance with the arbitration rules of the
1181:
1156:
1133:
812:"Mandatory Binding Arbitration and the Demise of the Seventh Amendment Right to a Jury Trial"
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8:
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186:
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779:
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730:
713:
357:
281:
1200:
AT&T Technologies, Inc. v. Communications Workers, 475 U. S. 643, 649–650 (1986).
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jurisdiction. The Supreme Court resolved this split by eliminating this exception. In
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930:
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133:
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Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, at page 5,
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591:, 592 U.S. ___ (2021), the Court dismissed certiorari as improvidently granted.
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141:
129:, 2016 U.S. Dist. LEXIS 169245 (E.D. Tex. Dec. 7, 2016); affirmed, 878
90:
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after extended debate, that these cases were incorrectly decided.").
125:, 2013 U.S. Dist. LEXIS 201338; motion for reconsideration granted,
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969:
934:
270:
137:
843:
Silver-Greenberg, Jessica; Gebeloff, Robert (October 31, 2015).
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406:
328:. These concerns, along with other disagreements about whether
30:
1064:
Henry Schein Inc., et al. v. Archer & White Sales, Inc.
798:
Arbitrability of Disputes Under the Federal Arbitration Act
130:
1015:
Scheffey, Adrienne; Friedman, Robert (January 14, 2019).
501:
is authorized to determine arbitrability, as outlined by
842:
719:
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.
1392:
United States Supreme Court cases of the Roberts Court
845:"Arbitration Everywhere, Stacking the Deck of Justice"
497:, the Court stressed that courts must first determine
1341:, No. 17–1272, 586 U.S. ___ (2019) is available from:
1287:
Henry Schein, Inc. v. Archer & White Sales, Inc.,
1274:
Henry Schein, Inc. v. Archer & White Sales, Inc.,
1149:
AT&T Technologies, Inc. v. Commc'n Workers of Am.
1083:"Henry Schein, Inc. v. Archer & White Sales, Inc"
473:
to the delegation of arbitrability to an arbitrator.
433:
AT&T Technologies, Inc. v. Commc'n Workers of Am.
1339:
Henry Schein, Inc. v. Archer & White Sales, Inc.
1285:
Amicus curiae brief of Professor George A. Bermann,
1272:
Amicus curiae brief of Professor George A. Bermann,
1042:
Archer & White Sales, Inc. v. Henry Schein, Inc.
961:
Archer & White Sales, Inc. v. Henry Schein, Inc.
908:
Henry Schein, Inc. v. Archer & White Sales, Inc.
906:
Brief of Respondent Archer & White Sales, Inc.,
638:
Henry Schein, Inc. v. Archer & White Sales, Inc.
553:
Some commentators have noted the Court's failure in
476:
459:
Henry Schein, Inc. v. Archer & White Sales, Inc.
334:
Henry Schein, Inc. v. Archer & White Sales, Inc.
262:
Henry Schein, Inc. v. Archer & White Sales, Inc.
119:
Archer & White Sales, Inc. v. Henry Schein, Inc.
54:
Henry Schein, Inc. v. Archer & White Sales, Inc.
24:
Henry Schein, Inc. v. Archer & White Sales, Inc.
1326:
is Not as Clear as Everyone Says," February 5, 2019
589:Henry Schein, Inc. v. Archer and White Sales, Inc.
558:and unmistakeable" delegations of authority under
702:Prima Paint Corp. v. Flood & Conklin Mfg. Co.
265:, 586 U.S. ___ (2019), was a case decided by the
1373:
1324:Henry Schein Inc. v. Archer and White Sales Inc.
1014:
1212:See, e.g., De Angelis v. Icon Entm't Grp., Inc.
387:
373:
533:as supporting this conclusion, comparing the
1254:, 2019 U.S. Dist. LEXIS 23128, at *8 (
833:according to the rules of the common law."
809:
1173:First Options of Chicago, Inc. v. Kaplan
816:Ohio State Journal on Dispute Resolution
448:
443:First Options of Chicago, Inc. v. Kaplan
413:
1218:, 2019 U.S. Dist. LEXIS 33578, at *11 (
548:
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517:In the months following the decision,
117:Motion to compel arbitration granted,
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537:clause with its AAA incorporation in
18:2019 United States Supreme Court case
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981:
877:
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800:, 71 Iowa L. Rev. 1137, 1140 (1986).
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1232:, 2019 U.S. Dist. LEXIS 31909 (
768:AT&T Mobility LLC v. Concepcion
752:Rent-A-Center West, Inc. v. Jackson
683:Florida State University Law Review
512:
13:
1397:United States arbitration case law
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1261:
1247:Charlie's Project, LLC v. T2B, LLC
1126:Rent-A-Center, W., Inc. v. Jackson
1072:
1001:
940:
915:
736:Circuit City Stores, Inc. v. Adams
527:Charlie's Project, LLC v. T2B, LLC
267:Supreme Court of the United States
144:. granted, 138 S. Ct. 2678 (2018).
36:Supreme Court of the United States
14:
1408:
1387:United States Supreme Court cases
1331:
1100:Mann, Ronald (October 30, 2018).
1062:Petition for Writ of Certiorari,
982:Mann, Ronald (October 22, 2018).
870:
785:
600:
477:Implications and Subsequent Cases
1225:Kourembanas v. InterCoast Colls.
662:Lewis, John (January 15, 2019).
354:American Arbitration Association
310:Arbitration in the United States
29:
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1239:
1205:
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381:Fifth Circuit Court of Appeals
365:sought was injunctive relief.
1:
594:
303:
1364:Supreme Court (slip opinion)
810:Sternlight, Jean R. (2001).
652:___, 138 S. Ct. 2678 (2019).
7:
677:Moses, Margaret L. (2006).
388:Wholly Groundless Exception
374:Delegation of Arbitrability
10:
1413:
1355:Oyez (oral argument audio)
1252: No. 1:18-cv-11240
1230: No. 2:17-cv-00331
1047: No. 2:12-cv-00572
307:
887:Steptoe & Johnson LLP
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49:
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28:
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429:Rent-A-Center v. Jackson
418:The Supreme Court heard
339:
280:should decide whether a
926:Douglas v. Regions Bank
796:Allison Brooke Overby,
294:Federal Arbitration Act
253:Federal Arbitration Act
45:Decided January 8, 2019
43:Argued October 29, 2018
461:
1021:Littler Mendelson P.C
452:
414:Decision of the Court
308:Further information:
239:Kavanaugh, joined by
1236: Feb. 28, 2019).
966:878 F.3d 488
931:757 F.3d 460
549:Unanswered Questions
298:9 U.S.C. § 1 et seq.
85:139 S. Ct. 524; 202
1053: May 28, 2013).
583:Improper Certiorari
187:Ruth Bader Ginsburg
93:566; 2019 WL 122164
1312:, January 9, 2019.
849:The New York Times
462:
358:arbitration clause
175:Associate Justices
1216:No. 2:17-cv-00927
1089:. March 14, 2019.
350:injunctive relief
258:
257:
127:No. 2:12-cv-00572
123:No. 2:12-cv-00572
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1302:Legal Commentary
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1273:
1246:
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1224:
1211:
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1197:
1192:
1187: (1995).
1171:
1167:
1162: (1986).
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1144:
1139: (2010).
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766:
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588:
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577:Henry Schein
576:
572:Henry Schein
571:
567:
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559:
555:Henry Schein
554:
552:
543:Henry Schein
542:
539:Henry Schein
538:
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534:
531:Henry Schein
530:
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523:Henry Schein
522:
519:Henry Schein
518:
516:
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495:Henry Schein
494:
482:Henry Schein
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466:Henry Schein
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231:Case opinion
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215:Neil Gorsuch
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199:Samuel Alito
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109:Case history
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395:trial court
286:arbitration
211:Elena Kagan
1376:Categories
1310:SCOTUSBlog
1106:SCOTUSblog
988:SCOTUSblog
640:, No.
595:References
317:jury trial
304:Background
278:arbitrator
155:questions.
91:U.S. LEXIS
89:480; 2019
60:Docket no.
1220:S.D. Ohio
1111:March 14,
1051:E.D. Tex.
1026:March 13,
993:March 13,
892:March 13,
862:March 13,
857:0362-4331
699:See also
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274:provision
241:unanimous
87:L. Ed. 2d
70:Citations
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564:AT&T
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503:AT&T
470:AT&T
437:AT&T
407:appealed
400:affirmed
363:remedies
271:contract
236:Majority
138:5th Cir.
99:Argument
642:17-1272
490:Federal
330:parties
282:dispute
149:Holding
140:2017);
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1028:2019
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