Supreme Court Issues Two Decisions

The Supreme Court issued two decisions from argued cases today. Both cases were unanimous decisions of the court. Justice Thomas wrote the decision in Culbertson v. Berryhill and Justice Kavanaugh delivered his first opinion on the bench in Henry Schein, Inc. v. Archer & White Sales, Inc.

Culbertson involved a question regarding whether attorney fee caps under the Social Security Act apply only to fees for court representation or if the cap also applies to aggregate fees awarded under §§ 406(a) and (b). The Court held that the cap applies only to fees for court representation. The Court determined that §§ 406(a) and (b) apply to different stages of the representation (before the agency and before the court) and use different methods to calculate fees. The Court was not persuaded that the agency practice to withhold 25% of past due benefits for payment of both agency and court fees does not support reading the two sections in the aggregate since the statutory text clearly discusses two separate pots of money. If Congress wanted to cap the agency stage fees at 25% it would have included the relevant language in § 406(a). The case was reversed and remanded since the Eleventh Circuit held that the 25% limit applied to both court and agency representation.

Schein involved the Federal Arbitration Act. Archer & White brought a suit against Archer Schein alleging various state and federal antitrust violations and seeking monetary damages and injunctive relief. A contract between the two parties called for arbitration of any dispute arising under the contract with the exception of requests for injunctive relief. Schein requested that the District Court refer the matter to arbitration by invoking the Federal Arbitration Act. Archer & White argued that since the claim involved a request for injunctive relief, the dispute was not subject to arbitration. Schein claimed that since arbitrators have the power to determine questions of arbitrability, an arbitrator should make the decision if arbitration applied in this case, and not the court. Archer & White claimed that the request for arbitration was wholly groundless, which gives the court the power to decide on arbitrability. The District Court denied the request to compel arbitration and the Fifth Circuit affirmed. The Court held that the wholly groundless exception is inconsistent with the Federal Arbitration Act and precedent of the Court. The Act provides that arbitration is a matter for contract and courts must enforce arbitration contracts according to the terms provided in the contract. If parties delegate the arbitrability question to an arbitrator in the contract, this agreement cannot be overruled by the court, even if the claim is wholly groundless. The Act does not contain a wholly groundless exception in the text and the Court was unwilling to add such language. The case was vacated and remanded to determine if the contract did delegate the arbitrability issue to an arbitrator, in addition to any other arguments that were already preserved.

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