DIGging a Deeper Hole in the Doughnut’s Hole: SCOTUS and Who Decides Arbitrability

Abstract

The Supreme Court has swiftly ended the eight-year long court battle in Henry Schein, Inc. v. Archer & White Sales, Inc. by dismissing the writ of certiorari, the second granted in this case, “as improvidently granted” (“DIG”). The question on appeal from the Fifth Circuit was who should decide whether a particular claim falls within the scope of an arbitration clause—that is, whether it is “arbitrable” ––the court or the arbitrator. The answer to this question impacts parties’ right to access the courts as well as their freedom to reserve certain decisions for an arbitrator. The DIG order issued by the Supreme Court in Schein is only the third to have ever been issued by the Court in an arbitration-related case. More importantly, it leaves in place a decision of the Fifth Circuit that de-parts from the principles that the Supreme Court has established in previous arbitration cases. In this Essay, I explain these principles within a “doughnut framework” that presents the different levels of the arbitrability analysis. I also provide an alternative to the Supreme Court’s DIG order and illustrate how the Court could have rendered a meaningful ruling in Schein’s second appeal that would have been in line with this “doughnut framework.” Finally, I discuss the wider implications that the Court’s DIG order may have for parties to commercial arbitration agreements.