Paul, Weiss Wins Second Supreme Court Petition Grant in Schein v. Archer & White

The U.S. Supreme Court agreed to consider whether a carve-out in an arbitration agreement negates a provision allowing arbitrators to rule on whether a case is arbitrable under the Federal Arbitration Act. Paul, Weiss is representing the petitioner, Henry Schein, Inc., a leading dental supplier, which is seeking to adjudicate the case in arbitration rather than the federal courts.

The grant in the case, which raises potentially groundbreaking arbitration issues, comes nearly four months after the Supreme Court stayed the case days before it was set to go to trial in the Eastern District of Texas. In its underlying lawsuit, rival dental distributor Archer & White Sales Inc. alleges that Henry Schein conspired to limit competitors’ sales territories under distribution agreements.

Remarkably, this is the second time the high court has considered Henry Schein’s arbitration bid. In January 2019, litigation partner Kannon Shanmugam and associate Will Marks persuaded the Court to vacate an earlier Fifth Circuit decision that had deemed Henry Schein’s arbitration bid to be “wholly groundless.” The Court rejected Archer & White’s argument that the provision was restricted to suits seeking only injunctions, not those that request damages.

In its 2019 decision, however, the Court didn’t opine on whether the dispute belonged in arbitration or not, instead inviting the Fifth Circuit to consider the question. In August 2019, the Fifth Circuit rejected Henry Schein’s arbitration bid and sent the case to the district court for trial. In a petition for certiorari filed January 31, Paul, Weiss argued that the Fifth Circuit’s reasoning was “badly flawed,” “defies common sense” and deepens a split among federal appeals courts.

The Paul, Weiss team included litigation partner Kannon Shanmugam.