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US Supreme Court: Federal Arbitration Act requires stay once arbitration is compelled, curbing appeals; courts may mandate stays even without request (Smith v Spizzirri)

Published on: 17 May 2024

Published by a Law360 reporter
Legal News
Article summary

In a six-page opinion written by Justice Sonia Sotomayor and issued less than a month after oral argument in Smith v Spizzirri, the Supreme Court relied on the text of federal arbitration law to hold that the Ninth Circuit erred in concluding that federal courts have discretion to dismiss once arbitration is compelled, a course that enables the losing party to appeal. Section 3 of the Federal Arbitration Act states that when a case is referred to arbitration, a trial court 'shall on application of one of the parties stay the trial of the action until such arbitration has been had'. The justices rejected the respondents’ position, advanced by the on-demand delivery company IntelliQuick, that 'stay' simply requires the court to halt parallel litigation, which it could achieve by dismissing the case. There are two significant problems with that construction, the opinion explained. First, it overlooks the long-settled legal meaning of 'stay'. Even when the FAA was enacted, the term described the 'temporary suspension' of proceedings, not the final termination of them, according to the Court’s analysis...

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