David N. Cinotti Authors Commentary in Mealey’s International Arbitration Report, “U.S. Supreme Court Limits Appeals from Decisions Enforcing Arbitration Agreements”
David N. Cinotti, partner at Pashman Stein Walder Hayden P.C., authored an article in Mealey’s International Arbitration Report titled, “U.S. Supreme Court Limits Appeals from Decisions Enforcing Arbitration Agreements.” The article discusses the implications of the recent U.S. Supreme Court decision in Smith v. Spizzirri, which resolved a disagreement among the circuit courts of appeal on an important procedural issue under the Federal Arbitration Act (the “FAA”): when a district court decides that a dispute filed in court is covered by an arbitration agreement, must the court stay the litigation or can it dismiss the case?
“The Supreme Court held that Section 3 of the FAA requires a stay rather than dismissal. Under Smith, a district court’s order that a dispute is covered by an arbitration agreement cannot immediately be appealed, absent the unusual circumstance of certification of a controlling issue of law by the district court for appeal and acceptance of the appeal by the circuit court. That is because an order staying a case in favor of arbitration is not a final order subject to appeal; nor is it appealable under Section 16 of the FAA, which authorizes immediate appeals from denials of petitions to compel arbitration or motions to stay litigation in favor of arbitration, but precludes immediate appeals from orders requiring arbitration. An order dismissing a case in favor of arbitration, on the other hand, is a final order subject to appeal because it ends litigation in the district court. Following Smith, parties who do not believe that they are required to arbitrate will ordinarily have to wait until after the arbitration is over to challenge an order holding that their dispute must be arbitrated,” writes Cinotti.
The article concludes:
“Smith further underscores that interlocutory appeals under FAA Section 16 are a one-way street: parties that unsuccessfully invoke an arbitration clause can have a decision reviewed immediately (and thereby stay the district-court litigation), while parties sent to arbitration unwillingly will ordinarily have to wait—potentially for years—to appeal a decision finding that their dispute is arbitrable.”
To read the full article, click here.
Cinotti has a wealth of experience in litigating issues under the Federal Arbitration Act and has written extensively on the statute, which you can read more about here.