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             Congressional                                         ______
          a   Research Service





An Avalanche of Arbitration: Three Federal

Arbitration Act Cases at the Supreme Court


Updated January 15, 2019
UPDATE:   On January 15, 2019, the Supreme Court issued its decision in New Prime v.
Oliveira. In an opinion authored by Justice Gorsuch, the Court unanimously ruled in favor of
respondent Oliveira on both of the questions discussed below. First, the Court held that courts
not arbitrators-had to determine whether or not an arbitration agreement falls within the ambit
of Sections ] and 2 of the Federal Arbitration Act, even if the parties sought to delegate that
question to arbitration. Second, the Court held that an independent contracting agreement was a
contract of employment such that it was subject to the Federal Arbitration Act's exemption for
such contracts involving interstate transportation workers like Mr. Oliveira. Justice Ginsburg
concurred, writing a short separate opinion to observe that, while ordinarily it is appropriate to
look at the ordinary meaning of the words in a statute at the time the statute was enacted (as the
Court did in New Prime with the language contract of employment'), Congress may also craft
statutes with broad language that can govern changing circumstances. Justice Kavanaugh did
not participate in the case.

In addition, on January 9, 2019, the Court decided the second of the cases discussed below,
Henry Schein, Inc. v. Archer & White Sales, Inc. In another unanimous opinion, this time
authored by Justice Kavanaugh, the Court rejected the existence of a wholly groundless
exception to so-called delegation clauses, which some lower courts had adopted in order to
decide arbitrability questions even where the parties had sought to delegate the question of
arbitrability to an arbitrator. Instead, the Court explained that, under the Federal Arbitration
Act and the Court's prior precedents, courts may never decide an arbitrability question-or a
merits question-that the parties have delegated to an arbitrator. The Court expressed no view
on whether the contract at issue in the case actually delegated arbitrability, but remanded for the
lower court to make that determination.

                                                           Congressional Research Service
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