The DRI Center for Law and Public Policy recently filed an amicus brief before the U.S. Supreme Court in Coinbase, Inc. v. Bielski, a case involving whether trial court litigation must be stayed during a nonfrivolous appeal of an order denying a motion to compel arbitration.
The majority rule adopted by most federal circuits holds that Section 16(a) of the Federal Arbitration Act (FAA) divests the district court of ongoing jurisdiction over the case and grants an automatic stay pending interlocutory appeal, subject to a frivolous appeal exception.
The minority rule adopted by the Ninth Circuit (along with the Second and Fifth Circuits) holds that district courts retain jurisdiction and have discretion to deny stays during appeals of arbitration denials.
The Center’s amicus brief:
- supports the position of petitioner Coinbase, Inc., which was denied the right to arbitrate and was forced into litigation during its interlocutory appeal of the district court’s order denying arbitration.
- explains the longstanding federal policy favoring arbitration and outlines the many U.S. Supreme Court cases carrying out the intent behind the FAA by holding that its scope and effect are broad.
- shows how the minority rule could irreparably harm litigants seeking to enforce arbitration. Permanent consequences result from litigation. They cannot be undone even if an order is reversed on appeal.
- argues that the Ninth Circuit minority rule deprives both businesses and consumers of bargained-for contractual rights.
- explains how the majority rule fosters judicial economy and is better aligned with the structure and function of the federal judiciary, with its unique functions of district and appellate courts.
- was authored by Sarah Elizabeth Spencer of Christensen & Jensen, P.C., in Salt Lake City.
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