SCOTUS Will Yet Again Decide Delegation of Arbitrability Question in Henry Schein Case

The Supreme Court of the United States has once again agreed to resolve a circuit split regarding whether it is up to a court or an arbitrator to decide questions related to arbitrability in the ongoing saga of Henry Schein, Inc. v. Archer and White Sales, Inc.  Last year, the nation’s highest court delivered a unanimous opinion in Henry Schein, Inc. v. Archer and White Sales, Inc., No. 17-1272 (January 8, 2019) stating a court may not decide the issue of arbitrability if the parties have contracted otherwise or incorporated arbitral rules that delegate the issue of arbitrability to an arbitrator even in situations where the arbitration claim is deemed to be “wholly groundless.” (A complete history of the case is available in a previous Disputing blog post.) After the Supreme Court issued its opinion, the case was remanded to the United States Court of Appeals for the Fifth Circuit.

Following remand, the Fifth Circuit once again affirmed a district court’s order stating it was up to the court to determine arbitrability.  The Fifth Circuit stated:

The Supreme Court reversed, holding that the “wholly groundless” exception was inconsistent with the Federal Arbitration Act. The Court declined to opine on whether the contract in this case in fact delegated the threshold arbitrability question to an arbitrator, remanding for this court to make that determination in the first instance. It reminded that “courts ‘should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so.’ ” Tasked with interpreting the arbitration clause anew, we conclude that the parties have not clearly and unmistakably delegated the question of arbitrability to an arbitrator. Accepting that the district court had the power to decide arbitrability, we now hold that the district court correctly determined that this case is not subject to the arbitration clause and affirm.

Yet again, Henry Schein filed a petition for certiorari with the U.S. Supreme Court arguing the high court must resolve a split among the circuit courts.  According to the Henry Schein’s petition, the question presented in the case is:

Whether a provision in an arbitration agreement that exempts certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator.

In addition, Archer and White filed a cross-petition asking the court to decide:

Whether an arbitration agreement that identifies a set of arbitration rules to apply if there is arbitration clearly and unmistakably delegates to the arbitrator disputes about whether the parties agreed to arbitrate in the first place.

On June 15^th, the Supreme Court of the United States granted Henry Schein’s petition and denied that of Archer and White.  The latest Henry Schein case (No. 19-963) has not yet been set for argument.

Photo by: Bill Mason on Unsplash