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Henry Schein, Inc.v.Archer & White Sales, Inc.

CourtSupreme Court of the United States
Docket No.17-1272
DecidedJanuary 8, 2019
Reporter586 U.S. 63
JudgesSupreme Court of the United States
Tags
CivilContract LawArbitrationFederal JurisdictionStatutory InterpretationReversalRemand
Case Summary

Archer & White sued Henry Schein and related companies over a distribution agreement that included an arbitration clause and a delegation provision. Archer & White sought only injunctive relief and argued that the dispute was outside the arbitration clause. The district court denied the defendants’ motion to compel arbitration after applying the Fifth Circuit’s “wholly groundless” exception, which allowed a court to reject a delegation provision when the argument for arbitrability appeared plainly groundless. The Supreme Court unanimously rejected that exception. The Federal Arbitration Act contains no wholly-groundless carveout, and courts may not devise one because statutory text and precedent require enforcement of a valid delegation clause. When the parties’ contract delegates arbitrability to an arbitrator, a court may not decide the arbitrability question unless the delegation provision itself is invalid or a party specifically challenges it. The Court did not decide whether the contract actually delegated this dispute or whether Archer & White’s challenge was valid. It reversed and remanded for the lower courts to address those questions under the Act.

Opinion

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