Arthur Andersen LLP v. Carlisle (2008)
- Docket
- 08-146
- Decided
- 2008-01-01
Summary
Question: 1) Does Section 16(a)(1) of the Federal Arbitration Act confer appellate jurisdiction over an appeal from a motion to stay proceedings under Section 3 of the FAA when appellants are non-signatories to the arbitration agreement? 2) Does Section 3 of the Federal Arbitration Act allow a federal district court to stay proceedings when non-signatories to an arbitration agreement can attempt to enforce the arbitration agreement under contract and agency law? Conclusion: Yes and Yes. The Supreme Court held that a federal court of appeals has jurisdiction over an appeal from a motion to stay proceedings under Section 16(a)(1) of the Federal Arbitration Act, regardless of whether the petitioner is in fact eligible for a stay. With Justice Antonin G. Scalia writing for the majority and joined by Justices Anthony M. Kennedy, Clarence Thomas, Ruth Bader Ginsburg, Stephen G. Breyer, and Samuel A. Alito, the Court reasoned that Section 16 clearly and unambiguously views the underlying merits of the claim irrelevant, but rather looks to the category of order appealed from. In this case, an appeal from a motion to stay proceedings automatically granted the Sixth Circuit jurisdiction. The Court also held that the Sixth Circuit erred in holding that Section 3 of the FAA categorically prevents a non-signatory to an arbitration agreement from pursuing a stay in proceedings. Rather, "whenever the relevant state law would make a contract to arbitrate a particular dispute enforceable by a non-signatory," that person may pursue and obtain a stay under Section 3. Therefore, the Court remanded to the Sixth Circuit to determine whether relevant state law allows the non-signatories to enforce their agreement under state contract law and thus are allowed to pursue a stay in proceedings. Justice David H. Souter dissented and was joined by Chief Justice John G. Roberts and Justice John Paul Stevens. He argued that "longstanding congressional policy" limits the ability of parties to obtain interlocutory appeals. Accordingly, appeals from a denial of a motion to stay proceedings should not be available to those parties who have not even signed the relevant arbitration agreement.