When a case goes to arbitration, the court case is paused, not dismissed
In Smith v. Spizzirri, the U.S. Supreme Court held that a federal court sending a case to arbitration must stay the lawsuit if a party asks, rather than dismiss it.
Reviewed by Laurence S. Bezinover · Published
What changed
The Federal Arbitration Act says a court “shall” stay a lawsuit once it finds the dispute must be arbitrated (9 U.S.C. § 3). The Supreme Court unanimously held that this is mandatory when a party requests a stay. Keeping the case open lets the court help during the arbitration, such as enforcing subpoenas, and help enforce the award afterward.
Who it affects
Businesses and individuals with arbitration agreements whose disputes end up in federal court.
Questions to raise with counsel
- If we move to compel arbitration, should we expressly ask the court for a stay?
- What does it mean for us that an order sending a case to arbitration generally cannot be appealed right away?
- Do our arbitration clauses set the forum, rules, and costs we want, before a dispute arises?
This briefing is general information about California law, not legal advice for your situation. Reading it does not create an attorney-client relationship.