Archer and White Sales, Inc. v. Henry Schein, Inco, 935 F.3d 274

Archer & White Sales sued Henry Schein, Danaher, and related entities for alleged anticompetitive conduct and sought damages and injunctive relief under federal and Texas antitrust law.
The Dealer Agreement between Archer and a predecessor contained an arbitration clause stating that “any dispute arising under or related to this Agreement (except for actions seeking injunctive relief and [certain IP disputes]) shall be resolved by binding arbitration in accordance with the AAA rules.”
Defendants moved to compel arbitration; a magistrate granted the motion (finding arbitrability delegated to an arbitrator), but the district court vacated that order and held the court should decide arbitrability because the dispute sought injunctive relief excluded from arbitration.
The Fifth Circuit panel initially affirmed based on a then-existing “wholly groundless” exception, concluding defendants’ arbitrability arguments were implausible; the Supreme Court reversed, holding that the exception conflicted with the FAA and remanded to decide whether the parties clearly and unmistakably delegated arbitrability.
On remand this panel held the Dealer Agreement did not clearly and unmistakably delegate arbitrability because the carve-out for “actions seeking injunctive relief” sits outside the incorporated AAA-rule delegation; the court therefore decided arbitrability and held the case is excluded from mandatory arbitration.

Issue	Archer's Argument	Henry Schein's Argument	Held
Whether the parties clearly and unmistakably delegated the gateway question of arbitrability to an arbitrator	No; the carve-out for “actions seeking injunctive relief” means AAA rules (and delegation) apply only to disputes not in the carve-out	Yes; incorporation of the AAA rules is clear and delegates arbitrability regardless of the carve-out; court should not resolve delegation without deciding merits	No delegation: the carve-out excludes those actions from the AAA-incorporated arbitration, so no clear and unmistakable evidence of delegation
If delegation absent, whether this action is arbitrable (i.e., falls within the arbitration clause)	The clause plainly excludes any “action seeking injunctive relief,” so this suit (which seeks injunctive relief) is not subject to arbitration	The carve-out should be read narrowly to allow arbitration of damages claims and only exclude injunctions preserving status quo pending arbitration	The clause unambiguously excludes any action seeking injunctive relief; the case is not subject to mandatory arbitration

Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019) (Supreme Court rejects “wholly groundless” exception and directs courts to determine delegation question)
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (parties may delegate arbitrability only by clear and unmistakable evidence)
Petrofac, Inc. v. DynMcDermott Petroleum Operations Co., 687 F.3d 671 (5th Cir. 2012) (incorporation of AAA rules can supply clear and unmistakable evidence of delegation)
Crawford Prof’l Drugs, Inc. v. CVS Caremark Corp., 748 F.3d 249 (5th Cir. 2014) (applied Petrofac where AAA incorporation existed despite carve-out language)
NASDAQ OMX Grp., Inc. v. UBS Securities, LLC, 770 F.3d 1010 (2d Cir. 2014) (where a broad arbitration clause is subject to a qualifying provision that arguably covers the dispute, delegation may be ambiguous and for the court)
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (strong federal policy favoring arbitration)
Volt Info. Scis., Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468 (1989) (FAA does not force arbitration when parties have not agreed to it)