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Henry Schein Inc. v. Archer and White Sales Inc. (2020)

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Supreme Court of the United States
Henry Schein Inc. v. Archer and White Sales Inc.
Term: 2020
Important Dates
Argument: December 8, 2020
Decided: January 25, 2021
Outcome
Dismissed
Vote
NA
Majority
Per curiam

Henry Schein Inc. v. Archer and White Sales Inc. is a case argued on December 8, 2020, during the court's October 2020-2021 term. The case came on a writ of certiorari to the United States Court of Appeals for the 5th Circuit.[1] It concerns arbitration agreements.

On January 25, 2021, the court dismissed the writ of certiorari in the case as improvidently granted in a per curiam decision.[2] Click here for more information about the ruling.


HIGHLIGHTS
  • The case: Archer & White Sales, Inc. filed a lawsuit in magisterial court against Henry Schein, Inc. ("Schein") alleging that Schein violated the Sherman Antitrust Act and the Texas Free Enterprise and Antitrust Act.[3] Schein filed motions to compel arbitration and stay all proceedings. The magistrate judge granted the defendants' motions. The U.S. District Court for the Eastern District of Texas reversed and vacated the magistrate judge's ruling and issued an order denying the motions to compel arbitration. On appeal, the U.S. Court of Appeals for the 5th Circuit affirmed the Eastern District of Texas' order. Schein appealed to the U.S. Supreme Court. The court vacated the 5th Circuit's ruling and remanded the case for further proceedings. On remand, the 5th Circuit affirmed the district court's denial of motions to compel arbitration. Schein petitioned the U.S. Supreme Court for review.
  • The issue: Whether an arbitration agreement provision exempting certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator.[4]
  • The outcome: In a per curiam decision, the court dismissed the case as improvidently granted.


    • You can review the lower court's opinion here.[5]

    For more information on the case of the same name that was decided in 2018, click here.

    Timeline

    The following timeline details key events in this case:

    • January 25, 2021: The U.S. Supreme Court dismissed the case as improvidently granted.
    • December 8, 2020: The U.S. Supreme Court heard oral argument.
    • June 15, 2020: The court agreed to hear the case.
    • January 31, 2020: Henry Schein Inc. filed a petition with the U.S. Supreme Court.
    • August 14, 2019: On remand, the 5th Circuit affirmed the district court’s order denying the motions to compel arbitration.

    Henry Schein Inc. v. Archer and White Sales Inc. (2018)

    • January 8, 2019: The U.S. Supreme Court vacated the 5th Circuit's ruling and remanded the case.
    • October 29, 2018: Oral argument.
    • June 25, 2018: The U.S. Supreme Court agreed to hear the case.
    • March 9, 2018: Petition for review filed with U.S. Supreme Court.
    • December 21, 2017: The United States Court of Appeals for the 5th Circuit affirmed the Eastern District of Texas' order denying the motions to compel arbitration.


    Background

    See also: Henry Schein Inc. v. Archer and White Sales Inc. (2018)

    Archer & White Sales, Inc., a dental equipment distributor, entered into a contract with dental equipment manufacturer Pelton and Crane to distribute Pelton and Crane's equipment. The contract provided for arbitration of any dispute arising under or related to the agreement, except for actions seeking injunctive relief, among other potential actions. Henry Schein, Inc., a distributor and dental equipment manufacturer, was Pelton and Crane's successor-in-interest.[6][7]

    On August 31, 2012, Archer & White Sales, Inc. filed a lawsuit in magisterial court against Schein, alleging that the company violated the Sherman Antitrust Act and the Texas Free Enterprise and Antitrust Act.[6][8]

    On May 28, 2013, the magistrate judge issued an order granting the defendants' motions to compel arbitration and stay all proceedings and to compel the plaintiff to arbitrate and to stay proceedings.[9]

    On December 7, 2016, the Eastern District of Texas granted the plaintiffs' order for reconsideration, reversed and vacated the magistrate judge’s order, and denied the defendants' motions, lifting the stay of proceedings.[9]

    On appeal, the 5th Circuit affirmed the Eastern District of Texas' judgment on December 21, 2017.[8]

    Henry Schein, Inc. appealed to the U.S. Supreme Court, and the court agreed to hear the case on June 25, 2018. The case was argued on October 29, 2018, and was decided on January 8, 2019. In a unanimous ruling, the court vacated and remanded the 5th Circuit's decision, holding that "the 'wholly groundless' exception to arbitrability is inconsistent with the Federal Arbitration Act and this Court’s precedent."[6]

    On remand from the Supreme Court, the Fifth Circuit reconsidered the merits of the case. On August 14, 2019, the Fifth Circuit affirmed the district court's order denying motions to compel arbitration.[5] The Fifth Circuit held that because the arbitration agreement included a provision that exempted certain claims from arbitration, including actions seeking injunctive relief, the parties had not met the threshold of a clear and unmistakable delegation of the question of arbitrability to an arbitrator.[5][10]

    On January 31, 2020, Schein filed a petition for review with the Supreme Court challenging the Fifth Circuit's ruling. On June 15, 2020, the Supreme Court granted review.

    Lower court opinion

    The following selection is a quote from the Fifth Circuit's opinion, issued on August 14, 2019:[5]

    “ In light of the Supreme Court’s decision, we consider anew the question of whether the parties in this dispute delegated the threshold arbitrability determination to an arbitrator. After being sued for antitrust violations, defendants in this suit sought to enforce an arbitration agreement. Initially, the magistrate judge granted a motion to compel arbitration, concluding that the question of arbitrability of the claims itself belonged to an arbitrator. The district court disagreed, holding that the arbitrability question was one for the courts. This panel affirmed. We determined that we need not reach the issue of whether the arbitration provision delegated the issue of arbitrability to an arbitrator because of a then-established narrow exception: where an assertion of arbitrability was "wholly groundless," a court was not required to submit the issue of arbitrability to an arbitrator. Determining defendants’ arguments for arbitrability were wholly groundless, we affirmed the district court’s holding that the claims were not arbitrable.


    The Supreme Court reversed, holding that the "wholly groundless" exception was inconsistent with the Federal Arbitration Act. The Court declined to opine on whether the contract in this case in fact delegated the threshold arbitrability question to an arbitrator, remanding for this court to make that determination in the first instance. It reminded that "courts ‘should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so.’ " Tasked with interpreting the arbitration clause anew, we conclude that the parties have not clearly and unmistakably delegated the question of arbitrability to an arbitrator. Accepting that the district court had the power to decide arbitrability, we now hold that the district court correctly determined that this case is not subject to the arbitration clause and affirm.

    ... Because this action is not subject to mandatory arbitration, we do not reach Archer’s alternative argument that third parties to the arbitration clause cannot enforce such an arbitration clause. We affirm the district court’s order denying defendants’ motions to compel arbitration.[11]

    		”
    —United States Court of Appeals for the 5th Circuit

    Legal definitions


    Sherman Antitrust Act

    The Sherman Antitrust Act is a federal law passed in 1890 that banned trusts and monopolies in industry, authorizing the federal government to dissolve trusts and break up monopolies as part of its power to regulate interstate commerce. It was the first modern American antitrust law and laid the foundation for Presidents Theodore Roosevelt and William Howard Taft's attempts to break up large industrial trusts.[12]

    Texas Free Enterprise and Antitrust Act

    The following selection is from Section 15.04 of the Texas Business & Commercial Code entitled "Purpose and construction":[3]

    “ The purpose of this Act is to maintain and promote economic competition in trade and commerce occurring wholly or partly within the State of Texas and to provide the benefits of that competition to consumers in the state. The provisions of this Act shall be construed to accomplish this purpose and shall be construed in harmony with federal judicial interpretations of comparable federal antitrust statutes to the extent consistent with this purpose.[11] ”
    —Texas Free Enterprise and Antitrust Act

    Questions presented

    The petitioner presented the following questions to the court:

    Questions presented:
    • Whether an arbitration agreement provision exempting certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator.[4]

    Oral argument

    Audio

    Audio of oral argument:[13]



    Transcript

    Outcome

    In a per curiam decision, the court dismissed the case from its merits docket as improvidently granted, meaning that the court ruled that it should not have taken up the case.[2][14]

    Text of the opinion

    Read the full opinion here.


    October term 2020-2021

    The Supreme Court began hearing cases for the term on October 5, 2020. The court's yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions in mid-June.[15]

    The court issued 67 opinions during its 2020-2021 term. Two cases were decided in one consolidated opinion. Ten cases were decided without argument. Click here for more information on the court's opinions.

    The court agreed to hear 62 cases during its 2020-2021 term. Of those, 12 were originally scheduled for the 2019-2020 term but were delayed due to the coronavirus pandemic. Five cases were removed from the argument calendar.


    See also

    External links

    Footnotes

    1. ↑ SCOTUSblog, "Henry Schein Inc. v. Archer and White Sales Inc.," accessed June 15, 2020
    2. ↑ 2.0 2.1 Supreme Court of the United States, "Henry Schein Inc. v. Archer and White Sales Inc.: Per curiam," decided January 25, 2021
    3. ↑ 3.0 3.1 Casetext, "Tex. Bus. & Com. Code § 15.01," accessed July 8, 2020
    4. ↑ 4.0 4.1 Supreme Court of the United States, "19-963 Schein, Inc. v. Archer and White Sales, Inc.; Questions presented," June 15, 2020
    5. ↑ 5.0 5.1 5.2 5.3 U.S. Court of Appeals for the 5th Circuit, Archer & White Sales, Inc. v. Henry Schein, Inc., decided August 14, 2019
    6. ↑ 6.0 6.1 6.2 Supreme Court of the United States, Henry Schein Inc. v. Archer and White Sales Inc, decided January 8, 2019
    7. ↑ Merriam-Webster, "successor in interest," accessed August 6, 2020
    8. ↑ 8.0 8.1 United States Court of Appeals for the 5th Circuit, Archer & White Sales, Inc. v. Henry Schein, Inc., decided December 21, 2017
    9. ↑ 9.0 9.1 United States District Court for the Eastern District of Texas, Archer & White Sales, Inc. v. Henry Schein, Inc., decided December 7, 2016
    10. ↑ SCOTUSblog, "Sequel Watch," June 10, 2020
    11. ↑ 11.0 11.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    12. ↑ OurDocuments.gov, "Sherman Anti-Trust Act (1890)," accessed January 2, 2018
    13. ↑ Supreme Court of the United States, "Oral Argument - Audio," accessed December 11, 2020
    14. ↑ SCOTUSblog, "Practice Pointer: Digging into DIGs," April 25, 2019
    15. ↑ SupremeCourt.gov, "A Brief Overview of the Supreme Court," accessed April 20, 2015
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