I called it. SCOTUS issued its unanimous opinion today in Henry Schein v. Archer & White, vacating and remanding the Fifth Circuit decision and making clear that there is no “wholly groundless” exception to the Federal Arbitration Act’s enforcement of delegation clauses.
As you may recall, a circuit split had developed over the “wholly groundless” exception. Some circuits, including the Fifth, concluded that even when parties have delegated questions of arbitrability (questions like: is the arbitration agreement valid? and does it cover the current dispute?) to an arbitrator, courts have the right to do an initial smell test. If the court finds the defendant’s argument for arbitrability is “wholly groundless” (and stinks), then it can refuse to send it to arbitrator. Other circuits, however, found room for no such exception in SCOTUS’s decisions.
