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19-963 HENRY SCHEIN, INC. V. ARCHER AND WHITE SALES, INC. DECISION BELOW: 935 F.3d 274 DISMISSED AS IMPROVIDENTLY GRANTED. CERT. GRANTED 6/15/2020 QUESTION PRESENTED: 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. LOWER COURT CASE NUMBER: 16-41674
The U.S. Supreme Court case Henry Schein Inc. v. Archer and White Sales Inc., 2020, revolved around the issue of arbitration agreements in contracts and who has the authority to decide whether a dispute falls within such an agreement: courts or arbitrators themselves? The case began when Archer and White Sales sued Henry Schein for antitrust violations, but Schein argued that their contract required them to settle disputes through arbitration instead of litigation. However, Archer & White contended that because their claim sought injunctive relief (a type of court order), it was exempt from mandatory arbitration per their contract's terms. In its decision, the Supreme Court ruled unanimously in favor of Henry Schein Inc., stating that under the Federal Arbitration Act (FAA), an arbitrator - not a court - should determine whether a dispute is subject to mandatory arbitration if there is "clear and unmistakable evidence" parties agreed on this delegation clause in their contract. This ruling reaffirmed previous decisions emphasizing strong federal policy favoring enforcement of private arbitration agreements.
In the dissenting opinion for Henry Schein Inc. v. Archer and White Sales Inc., Justice Kavanaugh argued that the majority's decision was inconsistent with the Federal Arbitration Act (FAA) and Supreme Court precedent, which both strongly favor arbitration. He contended that when an agreement delegates questions of arbitrability to an arbitrator, courts should not intervene unless it is "clear and unmistakable" that such delegation was not intended by parties involved in a dispute. The justice disagreed with the majority's application of a "wholly groundless" exception to this rule, arguing it lacked any textual basis in FAA or logical foundation within contract law principles governing delegation clauses. Furthermore, he expressed concern about practical implications of this ruling as it could potentially lead to wasteful litigation over threshold arbitrability issues before proceeding towards merits-based resolution either through court trial or arbitration.