May 20, 2022

Volume XII, Number 140

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SCOTUS Considers Effect of Carve-Out Provision in Arbitration Agreement

On Monday, the US Supreme Court agreed to consider 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. It is a question on which circuits have been divided. On one hand, some courts have found that the gateway question of arbitrability—whether the claims fall within the scope of the carve-out provision—is for the arbitrator to decide. On the other, some courts have found that, where there is a carve-out provision, there is no clear and unmistakable evidence of the parties’ intent to delegate questions of arbitrability to an arbitrator, and questions of arbitrability are to be decided by the court. Undoubtedly, resolution is necessary.

The case at issue, Henry Schein, Inc. v. Archer and White Sales, Inc., involves an antitrust dispute wherein Archer and White Sales, Inc., which distributes, sells, and services dental equipment, alleged conspiracy claims against Henry Schein, Inc., which distributes dental equipment. The relevant agreement included an arbitration provision requiring all disputes arising thereunder or related to the agreement, to be arbitrated, except for actions seeking injunctive relief, among others. Included in Archer and White Sales, Inc.’s complaint was a claim for unspecified injunctive relief. Henry Schein, Inc. moved to compel arbitration, and after a lengthy procedural history, the underlying issue of the operation of the arbitration provision is now before the US Supreme Court.

Interestingly, these parties are not strangers to the Court. In January 2019, in this same case, the US Supreme Court unanimously held that under the Federal Arbitration Act, if parties “clearly and unmistakably” delegate arbitrability questions to an arbitrator, a court cannot second guess the decision to arbitrate that particular dispute, even if the court believes the argument in favor of arbitrability is “wholly groundless.” Now, the Court has yet another opportunity to refine the framework by which arbitration agreements are analyzed.

Copyright © 2022, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume X, Number 170
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About this Author

Ashley Lewis Litigation Attorney Houston Hunton Andrews Kurth
Associate

Ashley’s practice includes general litigation, with an emphasis on oil and gas litigation and construction litigation.

She has advised and represented clients in all stages of litigation, including pre-suit matters, discovery (depositions and written), motion practice and trial. Ashley has represented clients in state and federal court as well as in alternative dispute resolution settings.

Representative Experience

Trial counsel for an exploration and production company in a dispute arising...

713 220 3907
Michael D. Morfey Energy Litigation Attorney Hunton Andrews Kurth Houston, TX
Partner

Michael is co-lead of the firm’s energy litigation practice group, and handles high-stakes cases and trials across the spectrum of commercial litigation with an emphasis on energy, banking, real estate and construction matters.

He has succeeded in cases covering the full range of industries and has particular experience defending clients in high-risk mass plaintiff and class action litigation, including matters involving claims of breach of contract, negligence, fraud, tortious interference, breach of fiduciary duty, trespass, nuisance and other torts. Whether prosecuting or...

713-220-4163
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