Supreme Court Rejects “Wholly Groundless” Exception to Question of Arbitrability

Red block among white blocks symbolizing exception

An arbitrator, and not the courts, will decide questions of arbitrability where parties have contracted for such a result.

February 6, 2019
Justin Fortescue - White and Williams LLP

In newly appointed Supreme Court Justice Brett Kavanaugh’s first opinion, the United States Supreme Court held that the “wholly groundless” exception to arbitrability, which some federal courts had relied on as justification to decide questions of arbitrability over the express terms of a contract, was inconsistent with the Federal Arbitration Act and Supreme Court precedent. Based on this decision, where a contract delegates the question of arbitrability to an arbitrator, courts must respect the parties’ contract and refer the question to the arbitrator. Schein v. Archer & White, 586 U.S. __ (2019).

In Schein, Archer & White brought a lawsuit against Henry Schein alleging violations of federal and state antitrust laws and seeking both monetary damages and injunctive relief. The relevant contract between the parties contained an arbitration provision that provided:

“Any dispute arising under or related to this Agreement (except for actions seeking injunctive relief . . .) shall be resolved by binding arbitration in accordance with the arbitration rules of the American Arbitration Association.”

Mr. Fortescue may be contacted at fortescuej@whiteandwilliams.com



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