Summary
The Eighth Circuit affirmed the district court's denial of Aegon's motion to dismiss or stay Express Scripts' declaratory judgment action pending arbitration. The court held that Express Scripts expressly challenged the continuing validity of the 1995 agreement and its arbitration provision, requiring the court—not an arbitrator—to decide arbitrability absent clear and unmistakable evidence of an agreement to arbitrate arbitrability. The court declined to consider Aegon's argument that incorporation of the American Arbitration Association rules supplied such evidence because the argument was waived.
Topics
Practice areas
Questions Presented
- Whether the district court properly denied Aegon's Rule 12(b)(6) motion to dismiss Express Scripts' declaratory-judgment and injunctive-relief claims.
- Whether the district court or an arbitrator should decide whether the 1995 agreement and its arbitration provision remained effective after the alleged 2000 agreement.
- Whether the parties' arbitration clause clearly and unmistakably delegated questions of arbitrability to the arbitrator.
- Whether the district court properly denied Aegon's motion to stay the action pending arbitration under 9 U.S.C. § 3.
Holdings
- The district court properly denied Aegon's motion to dismiss because Express Scripts alleged that the 2000 agreement became effective and superseded the 1995 agreement, together with facts that could support that allegation.
- The court, not the arbitrator, must decide whether a valid arbitration agreement exists and whether the specific dispute falls within the scope of that agreement, unless the parties clearly and unmistakably agreed to arbitrate arbitrability.
- The severability principles recognized in Prima Paint and Buckeye did not require an arbitrator to decide this dispute because Express Scripts specifically challenged the continuing existence and applicability of the arbitration provision itself.
- The district court properly denied Aegon's motion to stay because Aegon did not establish that the dispute over the continued existence and scope of the arbitration agreement was referable to arbitration.
Key quotations
“Unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator.”
“The question 'whether the parties have a valid arbitration agreement at all' is for the court, not the arbitrator, to decide.”
“Because the 1995 Agreement does not include an express statement of the parties' intent to arbitrate questions of arbitrability, the district court did not err in concluding that the arbitrability issue must be resolved by a court”
Factual background
In 1995, predecessors of the parties entered into a pharmaceutical sales agreement containing an arbitration clause. Express Scripts asserted that the parties orally entered a new agreement in 2000, operated under its terms, and thereby superseded the 1995 agreement; the only record copy of the purported 2000 agreement was unsigned and contained no arbitration clause. After a 2005 billing dispute involving approximately $5 million, Aegon demanded arbitration under the 1995 agreement, and Express Scripts sought a declaration and injunction against arbitration.
Procedural history
Express Scripts filed a state-court action seeking a declaration that a 2000 oral agreement terminated the parties' earlier agreement to arbitrate and seeking to enjoin Aegon's arbitration demand. Aegon removed the action to the Eastern District of Missouri and moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) or stay the action under 9 U.S.C. § 3. The district court denied Aegon's motion and dismissed Express Scripts' request for a temporary restraining order as moot; the Eighth Circuit affirmed.