In the January 24, 2019 edition of The Legal Intelligencer, Edward Kang, Managing Member of KHF wrote “US Supreme Court Settles the ‘Wholly Groundless’ Exception. Or Has It?”
In a recent article I co-authored, I discussed the “wholly groundless” exception to delegation clauses under the Federal Arbitration Act, “Should an Arbitrator Determine Arbitrability Where a Claim Is ‘Wholly Groundless’?” The Legal Intelligencer (July 26, 2018). There, I discussed the circuit split on this issue and that the U.S. Supreme Court would soon decide this issue for good. And the court has.
On Jan. 8, writing for a unanimous court in his first written opinion, Justice Brett Kavanaugh held that the wholly groundless exception to arbitrability is inconsistent with the FAA and, therefore, no such exception exists, see Henry Schein v. Archer & White Sales, ___ S.Ct. ___, 2019 WL 122164 (Jan. 8, 2019). The court held “when the parties’ contract delegates the arbitrability question to an arbitrator, a court may not override the contract, even if the court thinks that the arbitrability claim is wholly groundless.” In concluding this, the court stated, “the act contains no ‘wholly groundless’ exception, and we may not engraft our own exceptions onto the statutory text.”