Arbitration: “except for actions seeking injunctive relief” means – just that.

Plaintiffs alleged antitrust violations by distributors of dental equipment; seeking damages and injunctive relief. The defendants sought to compel arbitration, based on this arbitration clause in a relevant contract:

Disputes. This Agreement shall be governed by the laws of the State of North Carolina. Any dispute arising under or related to this Agreement (except for actions seeking injunctive relief and disputes related to trademarks, trade secrets, or other intellectual property of Pelton & Crane), shall be resolved by binding arbitration in accordance with the arbitration rules of the American Arbitration Association [(AAA)]. The place of arbitration shall be in Charlotte, North Carolina.

The issue was whether arbitrability was for the courts to decide or the arbitrator. The Fifth Circuit applied “the two-step inquiry adoped in Douglas v. Regions Bank[, 757 F.3d 460 (5th Cir. 2014),] under which the first question is whether the parties “clearly and unmistakably” intended to delegate the question of arbitrability to an arbitrator. Finding that “the interaction between the AAA Rules and the [injunctive relief] carve-out is at best ambiguous,” the Court chose not to resolve that issue, concluding that the second Douglas question was dispositive. That question asks whether the “assertion of arbitrability is wholly groundless,” which the Court found to be the case:

The arbitration clause creates a carve-out for ‘actions seeking injunctive relief.’ It does not limit the exclusion to ‘actions seeking only injunctive relief,’ nor ‘actions for injunction in aid of an arbitrator’s award.’ Nor does it limit itself to only claims for injunctive relief. . . . The mere fact that the arbitration clause allows Archer to avoid arbitration by adding a claim for injunctive relief does not change the clause’s plain meaning.

Archer & White Sales v. Henry Schein, Inc., No. 16-41674  (Dec. 21, 2017) (emphasis added).

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