Summary
The United States Court of Appeals for the Eighth Circuit affirmed the denial of Aegon Direct Marketing Services, Inc.'s motion to dismiss or stay proceedings pending arbitration. The court held that Express Scripts had expressly challenged the continuing existence of the earlier arbitration agreement, so the question of arbitrability was for the court rather than the arbitrator absent clear and unmistakable evidence otherwise. 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 complaint adequately stated a claim for declaratory and injunctive relief under Rule 12(b)(6) by alleging that a 2000 agreement superseded the 1995 agreement.
- Whether the district court or an arbitrator should decide whether the 1995 arbitration agreement remained in existence and whether the billing dispute was subject to arbitration.
- Whether the incorporation of the American Arbitration Association rules constituted clear and unmistakable evidence that the parties agreed to arbitrate the arbitrability question.
- Whether the arbitration provisions addressed in Prima Paint and Buckeye required submission of this dispute to an arbitrator.
Holdings
- The complaint was sufficient to survive Rule 12(b)(6) because Express Scripts alleged that the 2000 agreement became effective, superseded the 1995 agreement, and supported that allegation with factual assertions.
- Absent clear and unmistakable evidence that the parties delegated arbitrability to the arbitrator, the court—not the arbitrator—must decide whether a valid arbitration agreement exists and whether the particular dispute falls within its scope.
- Prima Paint and Buckeye did not require arbitration because Express Scripts specifically challenged the continuing existence and applicability of the arbitration provision itself, rather than merely challenging the validity of the contract as a whole.
- The court declined to consider Aegon's argument that incorporation of the AAA rules delegated arbitrability to the arbitrator because Aegon had not adequately raised and briefed the argument in the district court or its appellate briefs.
Key quotations
“Thus, "the question `whether the parties have a valid arbitration agreement at all' is for the court, not the arbitrator, to decide."” (516 F.3d at 700)
“A dispute like the one hereover whether the parties agreed to arbitrate will be resolved by the district court "[u]nless the parties clearly and unmistakably provide otherwise."” (516 F.3d at 701)
“For these reasons we affirm the judgment of the district court.” (516 F.3d at 702)
Factual background
The parties' predecessors entered a 1995 pharmaceutical sales agreement containing a broad arbitration clause, and Aegon and Express Scripts later succeeded to the relevant contractual interests. Express Scripts alleged that the parties orally entered a 2000 agreement that superseded the 1995 agreement and contained no arbitration clause; the only record copy of the 2000 agreement was unsigned. After Aegon claimed Express Scripts had overbilled it by approximately $5 million, Aegon demanded arbitration under the 1995 agreement. Express Scripts then sought a declaration that the 1995 arbitration provision no longer applied.
Procedural history
Express Scripts filed a state-court action seeking a declaration that a 2000 oral agreement superseded and terminated an earlier agreement's arbitration clause, together with injunctive relief against Aegon's arbitration demand. Aegon removed the action to federal court and moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss or under 9 U.S.C. § 3 to stay the action pending arbitration. The district court denied Aegon's motion and dismissed Express Scripts' request for a temporary restraining order as moot. The Eighth Circuit affirmed.