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Posts Tagged ‘Henry Schein’

Henry Schein Case: CPR Interviews Loree and Faulkner on Supreme Court’s Grant of Certiorari

June 24th, 2020 Arbitrability, Arbitration Agreements, Arbitration as a Matter of Consent, Arbitration Law, Arbitration Practice and Procedure, Arbitration Provider Rules, Arbitration Providers, Authority of Arbitrators, FAA Chapter 1, Federal Arbitration Act Section 2, International Institute for Conflict Prevention and Resolution (CPR), United States Court of Appeals for the Fifth Circuit, United States Supreme Court Comments Off on Henry Schein Case: CPR Interviews Loree and Faulkner on Supreme Court’s Grant of Certiorari
Henry Schein | Supreme Court | Cert. Granted
Steps and columns on the portico of the United States Supreme Court in Washington, DC.

On Monday, June 15, 2020 the International Institute of Conflict Protection and Resolution (“CPR”) interviewed our good friend and colleague Richard D. Faulkner and Loree & Loree partner Philip J. Loree Jr. about the U.S. Supreme Court’s grant of certiorari in Henry Schein Inc. v. Archer and White Sales Inc., No. 19-963. To watch and listen to the video-conference interview, CLICK HERE.

The petition for and grant of certiorari arose out of the Fifth Circuit’s remand decision from the United States Supreme Court’s decision in Henry Schein Inc. v. Archer & White Sales Inc., 139 S. Ct. 524 (2019) (available at ) (“Schein I”).

If you’ve been following our posts about the Schein I and the remand decision, Archer and White Sales Inc. v. Henry Schein Inc., 935 F.3d 274 (5th Cir. 2019) (available at ) (“Schein II”), then you know that the arbitration proponent, Henry Schein, Inc. (“Schein”), petitioned for rehearing en banc of Schein II in fall 2019. (See here, here, here, and here.) In October 2019, while the petition for rehearing en banc was pending, Philip J. Loree Jr. published in Alternatives an article entitled “Back to Scotus’s Schein: A Separability Analysis that Resolves the Problem with the Fifth Circuit Remand,” 37 Alternatives 131 (October 2019).

The Fifth Circuit denied the petition for rehearing en banc on December 6, 2019. But Schein, a Melville, N.Y.-based dental equipment distributor, filed on January 30, 2020 a petition for certiorari, which asked the U.S. Supreme Court to review the Fifth Circuit’s Schein II ruling.

The Petition asks the U.S. Supreme Court to determine “[w]hether 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.” (Petition at I)

We wrote about the Petition in a post CPR Speaks, CPR’s blog, published on February 19, 2020, which was entitled “Schein Returns: Scotus’s Arbitration Remand Is Now Back at the Court.” And we also published in the April 2020 issue of CPR Alternatives an article about the Petition, which was entitled “Schein’s Remand Decision Goes Back to the Supreme Court. What’s Next?,” 38 Alternatives 54 (April 2020) (the “April 2020 Alternatives Article”). 

As noted in the April 2020 Alternatives Article, Schein’s filing of the petition for certiorari prompted Archer & White Sales Inc. (“Respondent” or “Archer & White”), a Plano, Texas, distributor, seller, and servicer of dental equipment, to file a conditional cross-petition (the “Cross Petition”), which in the event the Court granted the Petition asked the Court to determine “[w]hether the parties clearly and unmistakably agreed to arbitrate arbitrability by incorporating the AAA Rules into their contract.”

The Cross-Petition ultimately prompted Rick Faulkner and Phil Loree Jr. to co-author a two-part article for Alternatives entitled “Schein’s Remand Decision: Should Scotus Review the Provider Rule Incorporation-by-Reference Issue?” Part I was published in the May 2020 issue of Alternatives. Part II was published in the June 2020 issue.

The two-part article argued that, if the Court granted the Petition, it should also grant the Cross-Petition, and address the issue whether the parties, by agreeing to arbitrate “in accordance with” the American Arbitration Assocation’s Commercial Arbitration Rules, clearly and unmistakably agreed to arbitrate arbitrability issues.

But as it turned out, the Court granted the Petition, but denied the Cross-Petition, one of the issues addressed in the interview.

Our good friend Russ Bleemer, Editor of Alternatives, conducted the interview, and did a great job editing the articles Rick and I wrote about Schein for Alternatives. He also wrote for the CPR Speaks Blog an excellent summary of where things stand in light of the Court’s grant of the Petition. The video of the interview is embedded into that blog post. You can request copies of the articles Rick and Phil wrote about Schein by emailing CPR at alternatives@cpradr.org.  

We also shout-out CPR’s Tania Zamorsky, who, among other things, is the blog master of CPR Speaks, and who coordinated the effort to share copies of the video on CPR’s social media outlets.

Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

Does a Clear and Unmistakable Delegation Provision Require the Parties to Arbitrate Disputes About the Existence of an Arbitration Agreement?

April 27th, 2019 Arbitrability, Arbitration Agreements, Arbitration and Mediation FAQs, Arbitration as a Matter of Consent, Arbitration Practice and Procedure, Arbitration Provider Rules, Authority of Arbitrators, Existence of Arbitration Agreement, Federal Arbitration Act Section 2, Federal Arbitration Act Section 3, Federal Arbitration Act Section 4, Rights and Obligations of Nonsignatories, Separability, Severability, United States Court of Appeals for the Fifth Circuit, United States Supreme Court Comments Off on Does a Clear and Unmistakable Delegation Provision Require the Parties to Arbitrate Disputes About the Existence of an Arbitration Agreement?
Arbitrability Question 5 | Delegation Clause | Delegation Provision

Parties can, and frequently do, agree to include in their contract a so-called
“Delegation Provision” that clearly and unmistakably delegates to the arbitrators questions of arbitrability. (See, e.g., Loree Reinsurance and Arbitration Law Forum posts here, here, here, and here.) Questions of arbitrability include questions concerning: (a) the scope of an arbitration agreement, that is, whether the parties agreed to arbitrate particular disputes or categories of disputes; (b) the validity or enforceability of an arbitration agreement “upon upon such grounds as exist at law or in equity for the revocation of any contract[,]” 9 U.S.C. § 2; or (c) whether an arbitration agreement has been formed or concluded, that is, whether an arbitration agreement exists in the first place. (See Loree Reinsurance and Arbitration Law Forum post here.)

Typically, a “delegation provision” states in clear and unmistakable terms that arbitrability questions are to be decided by the arbitrators. For example, by making part of their contract Rule 8.1 of the 2018 version of the International Institute for Conflict Prevention and Resolution (CPR)’s Non-administered Arbitration Rules, parties agree to the following broad Delegation Provision:

Rule 8: Challenges to the Jurisdiction of the Tribunal

8.1 The Tribunal shall have the power to hear and determine challenges to its jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement. This authority extends to jurisdictional challenges with respect to both the subject matter of the dispute and the parties to the arbitration.

CPR Non-Administered Arbitration Rule 8.1 (2018) (emphasis added).

Who Gets to Decide whether the Parties Entered into a Delegation Provision?

Federal Arbitration Act | Who Gets to Decide? | Delegation Provision

Suppose that Agent A, without the knowledge and consent of Party A, purports to bind Party A to a written contract with Party B, which includes a broad arbitration agreement that expressly incorporates by reference, and makes part of the purported contract, the 2018 version of CPR’s Non-administered Arbitration Rules. Party B and Agent A deal with each other concerning the subject matter of the contract, and a dispute arises.

Party B demands arbitration of the dispute, and serves an arbitration demand on Party A, who is understandably surprised at being named a party in an arbitration proceeding concerning a purported agreement of which it had no knowledge, objects to the arbitration demand, and Party B commences an action to compel arbitration.

In the proceeding to compel arbitration, Party A argues that Agent A had no actual or apparent authority to bind it to the agreement that contained the arbitration agreement. Party B responds that because the Delegation Clause made part of the agreement requires arbitration of issues concerning the “existence” of the arbitration agreement, Party A must arbitrate the issue of whether Agent A had authority to bind it to the agreement.

Must Party A arbitrate the issue whether Agent A had authority to bind it to the agreement because the agreement contains a Delegation Provision? If the only consideration were the text of Rule 8.1, then the answer would be “yes.”

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