Corporate Counsel Article Points Out That There Is A Split Among The Federal Circuits
In an April 2, 2012 article in Corporate Counsel online, entitled “In Arbitration, a Right to an Automatic Stay Pending Appeal?”, authors Elbert Lin and J. Andrew Law point out that there is a split among the federal circuits. The majority holds that appeal of the denial of a motion to compel arbitration automatically stays district court proceedings. But the 9th, 5th, and 2nd circuits reject the majority view, making it possible for litigants to battle on in district court while the issue concerning the right to arbitrate is being appealed.
The authors explain:
“The split turns on the application of Griggs v. Provident Consumer Discount Co., 459 U.S. 56 (1982). In Griggs, the Supreme Court held that ‘[t]he filing of a notice of an appeal is an event of jurisdictional significance—it confers jurisdiction on the court of appeals and divests the district court of its control over those aspects of the case involved in the appeal.’ Id. at 58 (emphasis added). The courts of appeals have disagreed over what is ‘involved in’ an appeal of an order denying arbitration.”
The authors argue that the minority view is an anachronism evincing a resistance to arbitration that the Federal Arbitration Act was intended to overcome, and that review may be “on the horizon” by a Supreme Court majority that has underscored the benefits of private arbitration.