Henry Schein, Inc. v. Archer and White Sales, Inc.
Issues
If a court determines that a claim of arbitrability is “wholly groundless,” may a court refuse enforcement of an agreement conferring the authority to determine questions of arbitrability to an arbitrator under the Federal Arbitration Act?
The Supreme Court will decide how courts should treat agreements delegating gateway questions of arbitrability to arbitrators—questions of whether an arbitrator has the authority to hear a case. Henry Schein, Inc. (“Henry Schein”) argues that, to honor such an agreement, the court must allow the arbitrator to decide gateway questions of arbitrability, even if the case clearly belongs in the court. In support of their argument, Henry Schein contends that under the Federal Arbitration Act (“FAA”), courts must allow arbitrators to decide the merits of claims delegated to arbitrators by contract, even if the merits are not arguable. Archer and White Sales, Inc. (“Archer and White”) counters that if a claim to arbitrability is “wholly groundless,” the court does not have to make the arbitrator evaluate the claim. Archer and White assert that the FAA does not ask courts to compel arbitration when plaintiffs file claims where they clearly belong—in court. From a policy perspective, this case asks the Court to balance the FAA’s strong policy in favor of arbitration with the need to protect the parties to an arbitration clause from arbitration proceedings they did not agree to.
Questions as Framed for the Court by the Parties
Whether the Federal Arbitration Act permits a court to decline to enforce an agreement delegating questions of arbitrability to an arbitrator if the court concludes the claim of arbitrability is “wholly groundless.”
On August 31, 2012, Archer and White Sales, Inc. (“Archer and White”) sued Henry Schein, Inc. and Danaher Corp. (“Henry Schein”) in the United States District Court for the Eastern District of Texas. Archer and Whites Sales, Inc. v.
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Additional Resources
- Gibbons P.C., SCOTUS to Have the Last Word on “Wholly Groundless” Standard for Delegation of Arbitrability, Commercial Litigation Alert (July 6, 2018).
- Shayna Posses, Dental Co. Claims Must Go To Arbitrator, High Court Told, Law 360 (October 15, 2018).