On July 28, 2015, the US Court of Appeals for the Second Circuit ruled that “the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“FAA”), requires a stay of proceedings when all claims are referred to arbitration and a stay requested”.
In this case, the District Court compelled arbitration, denied Defendant’s request to stay proceedings and dismissed the case. Being a final order, an appeal followed.
The Second Circuit recognized there would be administrative advantages in terms of docket management of a rule permitting dismissal, but the FAA gives no discretion to the court because it requires a stay of the proceeding when all claims are referred to arbitration and a stay is requested.
Accordingly, the Second Circuit affirmed the District Court’s judgment denying summary judgment and compelling arbitration, but it vacated the dismissal and remanded with instructions to stay the action.
The decision is important because if the case is stayed pending arbitration, the decision (not being final) cannot be appealed right away. The loosing party has to wait until the arbitration process is completed – at that point the court dismisses the case. Even then, of course the ground for appeals of the arbitration award are very limited.
Michael A. Katz v. Cellco Partnership dba Verizon Wireless, Docket Nos. 14‐138 and 14‐291 (July 28, 2015) is available at https://apps.fastcase.com/Research/Public/ExViewer.aspx?LTID=CmaSVBQQALdptflg4QpYvEjQGlW9ROwBHKi9ECI0owa9P02wEG33PxqLSC7kNFx+eZt/zZ3uAZxmoMgfo0eXAGA2nzLD5GgfC5+tQ1Un+PDUFUaiEgJxfvjB9yhWPlh486alwxpr8XHYSSJlQa3ZMSES8H1ajMtHXERUwibfNa0
For more info, Francesca Giannoni-Crystal