## Facts

- A & C Discount Pharmacy, L.L.C. d/b/a Medcore Pharmacy (A&C) participated in Caremark’s pharmacy network, which Caremark administered for health-plan clients as a pharmacy-benefits manager.
- A&C and CaremarkPCS, LLC and Caremark, LLC (collectively, Caremark) signed a 2015 provider agreement that incorporated Caremark’s Provider Manual.
- The agreement contained a broad arbitration clause requiring binding arbitration under the American Arbitration Association (AAA) Rules and covering disputes about arbitrability.
- The parties also executed a 2015 addendum addressing compounded medications.
- In June and August 2015, Caremark notified A&C that it was breaching the addendum by dispensing unauthorized prescriptions and directed A&C to cease the challenged conduct or face termination from the network.
- A&C sought to prevent termination by filing suit in Texas state court for declaratory relief and temporary and permanent injunctive relief, and it obtained a temporary restraining order (TRO).
- Caremark removed the case to federal court before the temporary-injunction hearing occurred.
- After removal, A&C filed an amended complaint and renewed its requests for a TRO and for temporary and permanent injunctive relief.
- The federal court allowed the state-court TRO to expire (concluding it had been erroneously granted) but allowed A&C’s request for preliminary injunctive relief to proceed procedurally.
- Caremark moved to compel arbitration under the provider agreement and to stay the litigation.
- A&C opposed arbitration as to its request for preliminary injunctive relief, arguing that the AAA Rules permitted it to seek interim court relief.
- Caremark responded that the AAA framework also provides for emergency relief in arbitration and that, given the agreement’s delegation of arbitrability, the arbitrator must decide any dispute over whether interim injunctive relief belongs in court or arbitration.

## Issues

1. Whether the parties clearly delegated questions of arbitrability to the arbitrator by agreeing to arbitration under the AAA Rules.
2. Whether, given that delegation, the court or the arbitrator must decide if A&C’s request for preliminary injunctive relief is subject to arbitration.

## Decision

- The court granted Caremark’s motion to compel arbitration.
- The court held that the arbitrator must decide arbitrability, including whether A&C’s request for preliminary injunctive relief is required to be pursued in arbitration rather than in court.
- The court stayed the federal action and administratively closed the case while arbitration proceeded.

## Legal Principles

- Under the Federal Arbitration Act, courts enforce arbitration agreements according to their terms, including contractual provisions assigning “gateway” arbitrability questions to an arbitrator.
- Parties may delegate arbitrability to the arbitrator, but the delegation must be shown by “clear and unmistakable” evidence.
- Incorporation of the AAA Rules—whose provisions authorize arbitrators to rule on their own jurisdiction and on objections to arbitrability—generally constitutes clear and unmistakable evidence of delegation.
- When arbitrability is delegated, disputes about the scope of arbitration (including arguments that certain forms of relief are excluded from arbitration) are for the arbitrator to resolve, absent a contract term that unmistakably assigns that question to the court.
- The availability of emergency or interim relief procedures within the AAA framework supports enforcing arbitration where the parties agreed to arbitrate under AAA Rules.

## Conclusion

Because the provider agreement required arbitration under the AAA Rules and assigned arbitrability disputes to the arbitrator, the court compelled arbitration and stayed the case, leaving the arbitrator to determine whether A&C’s request for preliminary injunctive relief must be handled in arbitration or may proceed in court.


A & C Discount Pharmacy, L.L.C. v. Caremark, L.L.C., Civil Action, No 3:16-CV-0264-D, 2016 U.S. Dist. LEXIS 82888 (2016)