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

In 2012, Archer & White Sales, Inc., a dental equipment distributor, sued Henry Schein, Inc. and related entities in federal court in Texas, alleging federal and state antitrust violations and seeking both money damages and injunctive relief. The parties' contract contained an arbitration clause that covered most disputes but excluded actions seeking injunctive relief. Henry Schein moved to compel arbitration, arguing that the contract's incorporation of arbitration rules delegated the arbitrability question to an arbitrator. Archer & White opposed, arguing the dispute was not arbitrable because the complaint sought injunctive relief. The district court denied the motion, and the Fifth Circuit affirmed, applying its "wholly groundless" exception, which allowed courts to decide arbitrability if the argument for arbitration was wholly groundless. The Supreme Court granted certiorari.

The Supreme Court unanimously vacated the Fifth Circuit's judgment and remanded the case. The Court held that the "wholly groundless" exception is inconsistent with the Federal Arbitration Act and the Court's precedent. When the parties' contract delegates the arbitrability question to an arbitrator, a court may not override the contract, even if the court thinks the arbitrability claim is wholly groundless. The Court declined to decide whether the particular contract actually delegated the arbitrability question, leaving that issue for the Fifth Circuit on remand.

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 that the claim of arbitrability is "wholly groundless."

The decision strengthened the enforceability of arbitration agreements with delegation clauses, limiting the role of courts in determining arbitrability. It resolved a circuit split and clarified that parties may contractually agree to have arbitrators, rather than courts, decide threshold arbitrability questions. The ruling was viewed as a significant pro-arbitration decision that reinforces the Federal Arbitration Act's policy favoring arbitration as a matter of contract. It also marked Justice Kavanaugh's first majority opinion for the Court.