Amicus Curiae Brief — Coinbase, Inc., Petitioner v. Abraham Bielski
Supreme Court briefJan 27, 2023
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No. 22-105
In the Supreme Court of the United States
COINBASE, INC.,
Petitioner,
v.
ABRAHAM BIELSKI,
Respondent.
COINBASE, INC.,
Petitioner,
v.
DAVID SUSKI, et al.,
Respondents.
On Writ of Certiorari to the United States
Court of Appeals for the Ninth Circuit
BRIEF OF THE NATIONAL RETAIL FEDERATION AS
AMICUS CURIAE IN SUPPORT OF PETITIONER
STEPHANIE A. MARTZ
ANDREW J. PINCUS
National Retail
Counsel of Record
Federation
ARCHIS A. PARASHARAMI
1101 New York Avenue, KEVIN RANLETT
NW #1200
Mayer Brown LLP
Washington, DC 20005
1999 K Street, NW
Washington, DC 20006
[additional counsel on
(202) 263-3000
signature page]
apincus@mayerbrown.com
Counsel for Amicus Curiae
i
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES...................................... iii
INTEREST OF THE AMICUS CURIAE....................1
INTRODUCTION AND SUMMARY OF
ARGUMENT ..........................................................3
ARGUMENT ...............................................................5
District Court Proceedings Should Be Stayed
During Non-Frivolous Appeals From The
Denial Of Arbitration.............................................5
A. Requiring Parties to Litigate the
Underlying Claims During an Appeal
Vitiates the Benefits of Arbitration
Protected by the FAA. ......................................5
1. Congress enacted the FAA to enable
parties to avoid the disadvantages of
litigation in court.........................................5
2. Denying a stay pending appeal
subjects parties to the very
disadvantages of litigation that the
FAA entitles them to avoid. ........................9
B. District Court Proceedings Should
Virtually Always Be Stayed During
Appeals of a Denial of Arbitration. ................ 20
1. Stays pending appeal are automatic
in comparable interlocutory appeals. ....... 20
2. The traditional stay factors will
virtually always favor a stay until
arbitrability is resolved. ............................ 22
a. Non-frivolous appeals would
involve a serious question as to
whether the claim belongs in
arbitration. ........................................... 23
ii
b. The defendant would be
irreparably harmed by the denial
of a stay in any appeal from the
denial of arbitration. ............................ 24
c. The balance of the equities
always favors a stay pending
appeal. .................................................. 27
d. The public interest favors a stay
pending appeal. .................................... 29
CONCLUSION .......................................................... 31
iii
TABLE OF AUTHORITIES
Page(s)
Cases
14 Penn Plaza LLC v. Pyett,
556 U.S. 247 (2009) ................................................ 6
Abdullayeva v. Attending Homecare
Servs. LLC,
928 F.3d 218 (2d Cir. 2019) ................................. 18
ADT, L.L.C. v. Richmond,
18 F.4th 149 (5th Cir. 2021) ................................ 18
Air-Con, Inc. v. Daikin Applied Latin
Am., LLC,
21 F.4th 168 (1st Cir. 2021) ................................. 17
Ala. Ass’n of Realtors v. Dep’t of Health
& Human Servs.,
141 S. Ct. 2485 (2021) .......................................... 23
Allied-Bruce Terminix Cos., Inc. v.
Dobson,
513 U.S. 265 (1995) ................................................ 7
Allman v. Smith,
764 F.3d 682 (7th Cir. 2014) ................................ 21
Alvarez v. Sheraton Operating Corp.,
2022 WL 67339 (9th Cir. Jan. 6,
2022) ..................................................................... 17
Am. Express Co. v. Italian Colors Rest.,
570 U.S. 228 (2013) ................................ 1, 7, 28, 29
iv
TABLE OF AUTHORITIES—continued
Page(s)
Am. Fam. Life Assurance Co. of N.Y. v.
Baker,
778 F. App’x 24 (2d Cir. 2019) ............................. 18
Am. Trucking & Transp. Ins. Co. v.
Nelson,
771 F. App’x 445 (9th Cir. 2019).......................... 18
Amgen Inc. v. Conn. Ret. Plans & Tr.
Funds,
568 U.S. 455 (2013) .............................................. 19
Arnold v. Homeaway, Inc.,
890 F.3d 546 (5th Cir. 2018) ................................ 19
Ashford v. PricewaterhouseCoopers
LLP,
954 F.3d 678 (4th Cir. 2020) ................................ 18
AT&T Mobility LLC v. Concepcion,
563 U.S. 333 (2011) ........................ 6, 10, 19, 26, 30
Atkins v. CGI Techs. & Sols., Inc.,
724 F. App’x 383 (6th Cir. 2018).......................... 19
Attix v. Carrington Mortg. Servs., LLC,
35 F.4th 1284 (11th Cir. 2022) ............................ 16
Aviles v. Quick Pick Express, LLC,
2016 WL 6902458 (N.D. Cal. Jan. 25,
2016) ..................................................................... 30
v
TABLE OF AUTHORITIES—continued
Page(s)
Aviles v. Quick Pick Express, LLC,
703 F. App’x 631 (9th Cir. 2017).......................... 30
Balan v. Tesla, Inc.,
840 F. App’x 303 (9th Cir. 2021).......................... 17
Ballou v. Asset Mktg. Servs., LLC,
46 F.4th 844 (8th Cir. 2022) ................................ 16
Barnett v. Am. Express Nat’l Bank,
37 F.4th 1100 (5th Cir. 2022) .............................. 17
Becker v. Delek US Energy, Inc.,
39 F.4th 351 (6th Cir. 2022) ................................ 16
Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007) .............................................. 11
Beltran v. AuPairCare, Inc.,
907 F.3d 1240 (10th Cir. 2018) ............................ 19
Benchmark Ins. Co. v. SUNZ Ins. Co.,
36 F.4th 766 (8th Cir. 2022) ................................ 16
Berk v. Coinbase, Inc.,
840 F. App’x 914 (9th Cir. 2020).......................... 18
Berkeley Cnty. Sch. Dist. v. Hub Int’l
Ltd.,
2022 WL 17974626 (4th Cir. Dec. 28,
2022) ..................................................................... 17
vi
TABLE OF AUTHORITIES—continued
Page(s)
Berkeley Cnty. Sch. Dist. v. Hub Int’l
Ltd.,
944 F.3d 225 (4th Cir. 2019) ................................ 18
Blinco v. Green Tree Serv., LLC,
366 F.3d 1249 (11th Cir. 2004) (per
curiam) ................................................................. 21
Borror Prop. Mgmt., LLC v. Oro Karric
N., LLC,
979 F.3d 491 (6th Cir. 2020) ................................ 18
Bradford-Scott Data Corp. v. Physician
Comp. Network, Inc.,
128 F.3d 504 (7th Cir. 1997) .......................... 22, 26
Brice v. Sequoia Cap. Operations, LLC,
859 F. App’x 31 (9th Cir. 2021) ........................... 17
C.B.S. Emps. Fed. Credit Union v.
Donaldson, Lufkin & Jenrette Secs.
Corp.,
716 F. Supp. 307 (W.D. Tenn. 1989) ................... 23
Casa Arena Blanca LLC v. Rainwater
by Estate of Green,
2022 WL 839800 (10th Cir. Mar. 22,
2022) ..................................................................... 17
Ciccio v. SmileDirectClub, LLC,
2 F.4th 577 (6th Cir. 2021) .................................. 17
vii
TABLE OF AUTHORITIES—continued
Page(s)
CIGNA HealthCare of St. Louis, Inc. v.
Kaiser,
294 F.3d 849 (7th Cir. 2002) ................................ 26
Cipolla v. Team Enters., LLC,
810 F. App’x 562 (9th Cir. 2020).......................... 18
Commc’ns Workers of Am. v. AT&T Inc.,
6 F.4th 1344 (D.C. Cir. 2021) .............................. 17
Conduragis v. Prospect Chartercare,
LLC,
909 F.3d 516 (1st Cir. 2018) ................................ 18
Cottrell v. AT&T Inc.,
2020 WL 2747774 (N.D. Cal. May 27,
2020) ..................................................................... 16
Cottrell v. AT&T Inc.,
2021 WL 4963246 (9th Cir. Oct. 26,
2021) ..................................................................... 17
Cunningham v. Lyft, Inc.,
17 F.4th 244 (1st Cir. 2021) ................................. 17
Cuomo v. U.S. Nuclear Regul. Comm’n,
772 F.2d 972 (D.C. Cir. 1985) .............................. 23
Darrington v. Milton Hershey Sch.,
958 F.3d 188 (3d Cir. 2020) ................................. 18
Dean Witter Reynolds, Inc. v. Byrd,
470 U.S. 213 (1985) ................................................ 9
viii
TABLE OF AUTHORITIES—continued
Page(s)
Dekker v. Vivint Solar, Inc.,
2021 WL 4958856 (9th Cir. 2021) ....................... 17
Del Rio v. CreditAnswers, LLC,
2010 WL 3418430 (S.D. Cal. Aug. 26,
2010) ..................................................................... 26
Dickson v. Gospel for ASIA, Inc.,
902 F.3d 831 (8th Cir. 2018) ................................ 19
Doctor’s Assocs., Inc. v. Alemayehu,
934 F.3d 245 (2d Cir. 2019) ................................. 18
Dohrmann v. Intuit, Inc.,
823 F. App’x 482 (9th Cir. 2020).......................... 18
Donelson v. Ameriprise Fin. Servs., Inc.,
999 F.3d 1080 (8th Cir. 2021) .............................. 17
Dorman v. Charles Schwab Corp.,
934 F.3d 1107 (9th Cir. 2019) .............................. 18
Eberle v. Smith,
2008 WL 238450 (S.D. Cal. Jan. 29,
2008) ..................................................................... 23
Egan v. Live Nation Worldwide, Inc.,
764 F. App’x 204 (3d Cir. 2019) ........................... 18
Epic Sys. Corp. v. Lewis,
138 S. Ct. 1612 (2018) ............................ 1, 7, 10, 24
ix
TABLE OF AUTHORITIES—continued
Page(s)
F.T.C. v. Standard Oil Co. of Cal.,
449 U.S. 232 (1980) .............................................. 25
Fernandez v. Bridgecrest Credit Co.,
2020 WL 7711837 (C.D. Cal. May 4,
2020) ..................................................................... 15
Fernandez v. Bridgecrest Credit Co.,
2022 WL 898593 (9th Cir. Mar. 28,
2022) ............................................................... 15, 16
Ferrell v. Cypress Env’t Mgmt.-TIR,
LLC,
2021 WL 5576677 (10th Cir. Nov. 30,
2021) ..................................................................... 17
Flores v. Barr,
977 F.3d 742 (9th Cir. 2020) ................................ 23
Foster v. Walmart, Inc.,
15 F.4th 860 (8th Cir. 2021) ................................ 17
Frederick v. Law Off. of Fox Kohler &
Assocs. PLLC,
852 F. App’x 673 (3d Cir. 2021) ........................... 17
Gaffers v. Kelly Servs., Inc.,
900 F.3d 293 (6th Cir. 2018) ................................ 19
Gallagher v. Vokey,
860 F. App’x 354 (5th Cir. 2021).......................... 17
x
TABLE OF AUTHORITIES—continued
Page(s)
Geier v. m-Qube Inc.,
314 F.R.D. 692 (W.D. Wash. 2016) ...................... 15
Geier v. m-Qube Inc.,
824 F.3d 797 (9th Cir. 2016) ................................ 15
Gilmer v. Interstate/Johnson Lane
Corp.,
500 U.S. 20 (1991) .................................................. 7
Griggs v. Kenworth of Montgomery, Inc.,
775 F. App’x 608 (11th Cir. 2019)........................ 18
Griggs v. Provident Consumer Discount
Co.,
459 U.S. 56 (1982) .................................................. 3
Gutierrez v. Wells Fargo Bank, NA,
889 F.3d 1230 (11th Cir. 2018) ............................ 19
Halliburton Energy Servs., Inc. v.
Ironshore Specialty Ins. Co.,
921 F.3d 522 (5th Cir. 2019) ................................ 18
Hamrick v. Partsfleet, LLC,
1 F.4th 1337 (11th Cir. 2021) .............................. 17
Hansen v. LMB Mortg. Servs., Inc.,
1 F.4th 667 (9th Cir. 2021) .................................. 17
Harlow v. Fitzgerald,
457 U.S. 800 (1982) .............................................. 21
xi
TABLE OF AUTHORITIES—continued
Page(s)
Harper v. Amazon.com Servs., Inc.,
12 F.4th 287 (3d Cir. 2021) .................................. 17
Hause v. City of Sunbury,
2022 WL 738611 (3d Cir. Mar. 11,
2022) ..................................................................... 17
Hearn v. Comcast Cable Commc’ns,
LLC,
992 F.3d 1209 (11th Cir. 2021) ............................ 17
Hegarty v. Somerset Cty.,
25 F.3d 17 (1st Cir. 1994) .................................... 21
Hendricks v. UBS Fin. Servs., Inc.,
No. 2:12-cv-606-JRG-RSP (E.D. Tex.) ................. 14
Hendricks v. UBS Fin. Servs., Inc.,
546 F. App’x 514 (5th Cir. 2013).......................... 14
Hilton v. Braunskill,
481 U.S. 770 (1987) .............................................. 22
Hodges v. Comcast Cable Commc’ns,
LLC,
21 F.4th 535 (9th Cir. 2021) ................................ 17
Hudson v. P.I.P. Inc.,
793 F. App’x 935 (11th Cir. 2019)........................ 18
Int’l Corrugated & Packing Supplies,
Inc. v. Lear Corp.,
771 F. App’x 545 (5th Cir. 2019).......................... 18
xii
TABLE OF AUTHORITIES—continued
Page(s)
Int’l Union v. Trane U.S. Inc.,
946 F.3d 1031 (8th Cir. 2020) .............................. 18
JPay, Inc. v. Kobel,
904 F.3d 923 (11th Cir. 2018) .............................. 19
Kilgore v. Keybank Nat’l Ass’n,
2009 WL 1975271 (N.D. Cal. July 8,
2009), rev’d, 718 F.3d 1052 (9th Cir.
2013) ..................................................................... 16
Knapke v. PeopleConnect, Inc.,
38 F.4th 824 (9th Cir. 2022) ................................ 17
Lamps Plus, Inc. v. Varela,
139 S. Ct. 1407 (2019) ............................................ 6
Levin v. Alms & Assocs., Inc.,
634 F.3d 260 (4th Cir. 2011) ............................ 3, 26
Local Union 97 v. NRG Energy, Inc.,
53 F.4th 42 (2d Cir. 2022) .................................... 17
Luxshare, Ltd. v. ZF Automotive US,
Inc.,
15 F.4th 780 (6th Cir. 2021) ................................ 23
Mandviwala v. Five Star Quality Care,
Inc.,
723 F. App’x 415 (9th Cir. 2018).......................... 19
Manigault v. Macy’s East, LLC,
318 F. App’x 6 (2d Cir. 2009) ............................... 15
xiii
TABLE OF AUTHORITIES—continued
Page(s)
Manigault v. Macy’s East, LLC,
506 F. Supp. 2d 156 (E.D.N.Y. 2007) .................. 15
Martinez-Gonzalez v. Elkhorn Packing
Co.,
25 F.4th 613 (9th Cir. 2022) ................................ 17
Mason v. Midland Funding LLC,
815 F. App’x 320 (11th Cir. 2020)........................ 18
McArdle v. AT&T Mobility LLC,
2017 WL 4354998 (N.D. Cal. Oct. 2,
2017), aff’d, 772 F. App’x 575 (9th
Cir. 2019) .............................................................. 14
McArdle v. AT&T Mobility, LLC,
474 F. App’x 515 (9th Cir. 2012).......................... 14
McArdle v. AT&T Mobility LLC,
657 F. Supp. 2d 1140 (N.D. Cal.
2009) ..................................................................... 14
McArdle v. AT&T Mobility LLC,
No. 4:09-cv-1117 (N.D. Cal.) ................................ 14
McCauley v. Halliburton Energy Servs.,
Inc.,
413 F.3d 1158 (10th Cir. 2005) ............................ 21
McCullough v. AIG Ins. Hong Kong
Ltd.,
828 F. App’x 704 (11th Cir. 2020)........................ 18
xiv
TABLE OF AUTHORITIES—continued
Page(s)
Meeks v. Experian Info. Servs., Inc.,
2022 WL 17958634 (9th Cir. Dec. 27,
2022) ..................................................................... 16
Meeks v. Experian Info. Sols., Inc.,
2021 WL 5149066 (N.D. Cal. Nov. 5,
2021) ..................................................................... 16
Mendoza v. Fred Haas Motors, Ltd.,
825 F. App’x 200 (5th Cir. 2020).......................... 18
In re Mercedes-Benz Emissions Litig.,
797 F. App’x 695 (3d Cir. 2020) ........................... 18
Mey v. DIRECTV, LLC,
971 F.3d 284 (4th Cir. 2020) ................................ 18
Miner v. Ecolab, Inc.,
744 F. App’x 399 (9th Cir. 2018).......................... 19
Mitchell v. Forsyth,
472 U.S. 511 (1985) .............................................. 21
Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc.,
473 U.S. 614 (1985) ................................................ 6
Mohamed v. Uber Techs., Inc.,
109 F. Supp. 3d 1185 (N.D. Cal.
2015), rev’d, 848 F.3d 1201 (9th Cir.
2016) ..................................................................... 16
xv
TABLE OF AUTHORITIES—continued
Page(s)
Momot v. Mastro,
2010 WL 11538047 (D. Nev. Feb. 24,
2010) ..................................................................... 15
Momot v. Mastro,
652 F.3d 982 (9th Cir. 2011) ................................ 15
Morgan Drexen, Inc. v. Consumer Fin.
Prot. Bureau,
785 F.3d 684 (D.C. Cir. 2015) .............................. 25
Murphy v. DIRECTV, Inc.,
2008 WL 8608808 (C.D. Cal. July 1,
2008) ............................................................... 23, 27
Neal v. Navient Sols., LLC,
978 F.3d 572 (8th Cir. 2020) ................................ 18
Nettles v. Midland Funding LLC,
983 F.3d 896 (7th Cir. 2020) ................................ 17
Nken v. Holder,
556 U.S. 418 (2009) .............................................. 22
Noe v. City Nat’l Bank of W. Va.,
828 F. App’x 163 (4th Cir. 2020).......................... 18
Novic v. Credit One Bank, Nat’l Assoc.,
757 F. App’x 263 (4th Cir. 2019).......................... 18
Noye v. Johnson & Johnson Servs., Inc.,
765 F. App’x 742 (3d Cir. 2019) ........................... 18
xvi
TABLE OF AUTHORITIES—continued
Page(s)
O’Connor v. Uber Techs., Inc.,
904 F.3d 1087 (9th Cir. 2018) .............................. 19
Ohring v. UniSea, Inc.,
2021 WL 2936641 (W.D. Wash. July
13, 2021), rev’d, 2022 WL 1599127
(9th Cir. May 20, 2022) .................................. 15, 16
In re Pac. Fertility Ctr. Litig.,
814 F. App’x 206 (9th Cir. 2020).................... 14, 18
In re Pac. Fertility Ctr. Litig.,
2019 WL 2635539 (N.D. Cal. June
27, 2019) ............................................................... 13
Parks IP Law, LLC v. Wood,
755 F. App’x 884 (11th Cir. 2018)........................ 19
Performance Unlimited, Inc. v. Questar
Publishers, Inc.,
52 F.3d 1373 (6th Cir. 1995) ................................ 27
Plummer v. McSweeney,
941 F.3d 341 (8th Cir. 2019) ................................ 18
Pollard v. Remington Arms Co.,
320 F.R.D. 198 (W.D. Mo. 2017) .......................... 28
Polyflow, L.L.C. v. Specialty RTP,
L.L.C.,
993 F.3d 295 (5th Cir. 2021) ................................ 17
xvii
TABLE OF AUTHORITIES—continued
Page(s)
Princz v. Fed. Rep. of Germany,
998 F.2d 1 (D.C. Cir. 1993) (per
curiam) ................................................................. 21
Reeves v. Enter. Prods. Partners, LP,
17 F.4th 1008 (10th Cir. 2021) ............................ 17
Reichert v. Rapid Invs., Inc.,
826 F. App’x 656 (9th Cir. 2020).......................... 18
In re Remicade (Direct Purchaser)
Antitrust Litig.,
938 F.3d 515 (3d Cir. 2019) ................................. 18
Renegotiation Bd. v. Bannercraft
Clothing Co.,
415 U.S. 1 (1974) .................................................. 25
Richardson v. Coverall N. Am., Inc.,
811 F. App’x 100 (3d Cir. 2020) ........................... 18
Ridgeway v. Nabors Completion & Prod.
Servs. Co.,
725 F. App’x 472 (9th Cir. 2018).......................... 19
Robert D. Mabe, Inc. v. OptumRX,
43 F.4th 307 (3d Cir. 2022) .................................. 16
In re Rotavirus Vaccines Antitrust
Litig.,
30 F.4th 148 (3d Cir. 2022) .................................. 17
xviii
TABLE OF AUTHORITIES—continued
Page(s)
Solomon v. CARite Corporate LLC,
837 F. App’x 355 (6th Cir. 2020).......................... 18
Southard v. Newcomb Oil Co., LLC,
2019 WL 8111958 (6th Cir. Nov. 12,
2019) ..................................................................... 18
Stiner v. Brookdale Senior Living, Inc.,
810 F. App’x 531 (9th Cir. 2020).......................... 18
Stolt-Nielsen S.A. v. AnimalFeeds Int’l
Corp.,
559 U.S. 662 (2010) ...................................... 6, 8, 24
Swanson v. Citibank, N.A.,
614 F.3d 400 (7th Cir. 2010) .......................... 11, 13
Swiger v. Rosette,
989 F.3d 501 (6th Cir. 2021) ................................ 17
Tassy v. Lindsay Ent. Enters., Inc.,
2018 WL 1582226 (6th Cir. Feb. 22,
2018) ..................................................................... 19
Tex. Democratic Party v. Abbott,
961 F.3d 389 (5th Cir. 2020) ................................ 23
Triplet v. Menard, Inc.,
42 F.4th 868 (8th Cir. 2022) ................................ 17
United States v. LaMere,
951 F.2d 1106 (9th Cir. 1991) .............................. 21
xix
TABLE OF AUTHORITIES—continued
Page(s)
United Steel v. Nat’l Grid,
38 F.4th 279 (1st Cir. 2022) ................................. 16
Viking River Cruises, Inc. v. Moriana,
142 S. Ct. 1906 (2022) ........................................ 1, 7
Weiss v. Macy’s Retail Holdings, Inc.,
741 F. App’x 24 (2d Cir. 2018) ............................. 19
Williams-Jackson v. Innovative Senior
Care Home Health of Edmond, LLC,
727 F. App’x 965 (10th Cir. 2018)........................ 19
Matter of Willis,
944 F.3d 577 (5th Cir. 2019) ................................ 18
Zaborowski v. MHN Gov’t Servs., Inc.,
2013 WL 1832638 (N.D. Cal. May 1,
2013) ..................................................................... 27
Zachman v. Hudson Valley Fed. Credit
Union,
49 F.4th 95 (2d Cir. 2022) .................................... 17
Ziglar v. Express Messenger Sys., Inc.,
739 F. App’x 444 (9th Cir. 2018).......................... 19
Zirpoli v. Midland Funding, LLC,
48 F.4th 136 (3d Cir. 2022) .................................. 17
Zoller v. GCA Advisors, LLC,
993 F.3d 1198 (9th Cir. 2021) .............................. 17
xx
TABLE OF AUTHORITIES—continued
Page(s)
Statutes, Rules and Regulations
9 U.S.C. § 3 .................................................. 3, 7, 24, 26
9 U.S.C. § 4 .................................................. 3, 7, 24, 26
9 U.S.C. § 16 .......................................................... 3, 26
9 U.S.C. § 16(a) .......................................................... 26
Sup. Ct. R. 23............................................................. 28
Sup. Ct. R. 37.6 ............................................................ 1
Fed. R. Civ. P. 23(c) ................................................... 10
American Arbitration Association Commercial Arbitration Rule R-38 ............................. 27
JAMS Streamlined Arbitration Rules R19(d) ...................................................................... 27
1988 Judicial Improvements and Access
to Justice Act, Pub. L. No. 100-702,
tit. X, § 1019(a), 102 Stat. 4671 (Nov.
19, 1988) ................................................................. 3
Y2K Act of 1999, Pub. L. No. 106-37
§ 2(a)(3)(B)(iv), 113 Stat. 185 ................................ 6
xxi
TABLE OF AUTHORITIES—continued
Page(s)
Other Authorities
A.B.A. Committee on Commerce, Trade
and Commercial Law, The United
States Arbitration Law and Its
Application, 11 A.B.A. J. 153 (1925) ..................... 7
Jerold S. Auerbach, Justice Without
Law? (1983) ............................................................ 9
Albert Bates, Jr., Controlling Time and
Cost in Arbitration: Actively
Managing the Process and “RightSizing” Discovery, 67-Oct. Disp.
Resol. J. 54 (2012) .................................................. 8
John H. Beisner, Discovering a Better
Way: The Need for Effective Civil
Litigation Reform, 60 Duke L.J. 547
(2010) .................................................................... 12
Omri Ben-Shahar, Arbitration and
Access to Courts: Economic Analysis,
in Regulatory Competition in
Contract Law and Dispute
Resolution (Horst Eidenmüller, ed.
2013) ..................................................................... 29
Edward H. Cooper, 15A Federal
Practice and Procedure § 3914.10.8
(3d ed. Supp. 2022)............................................... 21
xxii
TABLE OF AUTHORITIES—continued
Page(s)
Edward H. Cooper, 15B Federal
Practice and Procedure § 3914.17 (2d
ed. Supp. 2022) ..................................................... 13
Duke Conf. Subcomm., Advisory Comm.
on Civ. Rules, Report of the Duke
Conference Subcommittee 79 (2014) .................... 11
Carlton Fields, Class Action Survey
(2022) .................................................................... 12
Susanna S. Fodor & Steven C. Bennett,
Arbitrating Commercial Real Estate
Lease Disputes, 65 Disp. Resol. J. 90
(2010) ...................................................................... 8
Henry J. Friendly, Federal Jurisdiction:
A General View 120 (1973) .................................. 19
H.R. Rep. No. 542, 97th Cong., 2d Sess.
13 (1982) ................................................................. 6
H.R. Rep. No. 68-96 (1924).......................................... 6
Edith H. Jones, Appeals of Arbitration
Orders—Coming Out of the
Serbonian Bog, 31 S. Tex. L. Rev.
361 (1990) ............................................................. 26
John S. Kiernan, Reducing the Cost and
Increasing the Efficiency of Resolving
Commercial Disputes, 40 Cardozo L.
Rev. 187 (2018) ....................................................... 9
xxiii
TABLE OF AUTHORITIES—continued
Page(s)
John B. McArthur, Do Arbitrators Know
Something that Judges Don't?, 94
Judicature 107 (2010) ............................................ 8
1 Thomas H. Oehmke & Joan M.
Brovins, Commercial Arbitration
§ 17:1 (Supp. 2023)............................................... 25
Andrew M. Pardieck, The Shifting
Sands of Cost Shifting, 69 Clev. St.
L. Rev. 349 (2021) ................................................ 12
Nam D. Pham & Mary Donovan, An
Empirical Assessment of
Employment Arbitration, 16 J.L.
Econ. & Pol’y 45 (2021) ........................................ 28
Nam D. Pham & Mary Donovan, Fairer,
Faster, Better III: An Empirical
Assessment of Consumer &
Employment Arbitration, U.S.
Chamber of Commerce Institute for
Legal Reform (Mar. 2022) .................................... 28
Rodney A. Satterwhite & Matthew J.
Quatrara, Asymmetrical Warfare:
The Cost of Electronic Discovery in
Employment Litigation, 14 Rich. J.L.
& Tech. 9 (2008) ................................................... 11
xxiv
TABLE OF AUTHORITIES—continued
Page(s)
Alan Schwartz & Simone M. Sepe,
Economic Challenges for the Law of
Contract, 38 Yale J. Reg. 678 (2021) ..................... 8
The Sedona Conference Commentary on
Protection of Privileged ESI, 17 Sedona Conf. J. 95 (2016) ........................................ 12
Hon. Shira A. Sheindlin, The
Intersection of E-Discovery and
Arbitration, 2021 Practitioner
Insights Commentators 280 (2021) ....................... 8
S. Rep. No. 68-536 (1924) ............................................ 6
Stephen J. Ware, The Centrist Case for
Enforcing Adhesive Arbitration
Agreements, 23 Harv. Negotiation L.
Rev. 29 (2017) ....................................................... 29
Roy Weinstein, et al., Efficiency and
Economic Benefits of Dispute
Resolution through Arbitration
Compared with U.S. District Court
Proceedings (Mar. 2017) ........................................ 9
Percy Werner, Voluntary Tribunals, 56
Am. L. Rev. 852 (1922)........................................... 7
xxv
TABLE OF AUTHORITIES—continued
Page(s)
Thomas Willging & Shannon
Wheatman, Attorney Choice of
Forum in Class Action Litigation:
What Difference Does It Make?, 81
Notre Dame L. Rev. 591 (2006) ........................... 28
Charles Yablon & Nick Landsman-Roos,
Discovery about Discovery: Sampling
Practice and the Resolution of
Discovery Disputes in an Age of EverIncreasing Information, 34 Cardozo
L. Rev. 719 (2012) ................................................ 11
INTEREST OF THE AMICUS CURIAE1
Established in 1911, the National Retail Federation (NRF) is the world’s largest retail trade association and the voice of retail worldwide. The NRF’s
membership includes retailers of all sizes, formats,
and channels of distribution, spanning all industries
that sell goods and services to consumers.
The NRF provides courts with the perspective of
the retail industry on important legal issues impacting its members. To that end, the NRF often files amicus briefs expressing the views of the retail community on numerous topics, including the enforceability
of arbitration agreements. See, e.g., Viking River
Cruises, Inc. v. Moriana, 142 S. Ct. 1906 (2022); Epic
Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018); Am. Express Co. v. Italian Colors Rest., 570 U.S. 228 (2013).
Retail is by far the largest private-sector employer
in the United States. The retail industry directly employs 32 million Americans, and supports one in four
jobs—totaling about 52 million workers.
Many NRF members enter into arbitration agreements with their employees and some also do so with
their customers. NRF members choose arbitration because it is faster, simpler, more informal, less expensive, and less adversarial than a lawsuit in court.
Most of the benefits of arbitration—benefits that
Congress specifically recognized and protected when
it enacted the Federal Arbitration Act (FAA)—disappear when a district court erroneously denies a motion
Pursuant to Rule 37.6, amicus affirms that no counsel for a
party authored this brief in whole or in part and that no person
or entity other than amicus, its members, or its counsel made a
monetary contribution to its preparation or submission.
1
2
to compel arbitration and permits the litigation to continue during an appeal of that order. The defendant
will face the very burdens of litigation in court that
the arbitration agreement was intended to avoid. Dispute resolution becomes more adversarial, subject to
the complex procedural rules that apply in court, and
burdened by onerous discovery. The result, among
other things, is a significant increase in the costs of
dispute resolution for NRF members.
The NRF and its members therefore have a strong
interest in the Court’s resolution of the question presented here. Staying district court proceedings during
the non-frivolous appeal of an order denying arbitration protects the rights guaranteed by the FAA, preserves the benefits of arbitration, and is compelled by
the text of the FAA. And even if the Court does not
accept Coinbase’s argument (with which NRF agrees)
that district courts are divested of jurisdiction by an
appeal of an order denying arbitration, a stay would
be required by the legal standard governing stays
pending appeal in other contexts.
3
INTRODUCTION AND
SUMMARY OF ARGUMENT
Coinbase’s brief explains that a district court
must stay proceedings during a non-frivolous appeal
of the denial of a motion to compel arbitration. As this
Court has held, “[t]he filing of a notice of 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.” Griggs v. Provident Consumer
Discount Co., 459 U.S. 56, 58 (1982). “The core subject
of an arbitrability appeal is the challenged continuation of proceedings before the district court on the underlying claims.” Levin v. Alms & Assocs., Inc., 634
F.3d 260, 264 (4th Cir. 2011). Congress legislated
against, and incorporated, these background principles when it enacted Section 16 of the FAA to authorize immediate interlocutory appeals from the denial of
arbitration. See 1988 Judicial Improvements and Access to Justice Act, Pub. L. No. 100-702, tit. X,
§ 1019(a), 102 Stat. 4671 (Nov. 19, 1988) (codified as
amended at 9 U.S.C. § 16).
NRF submits this brief to discuss additional reasons why a stay pending appeal should be automatic.
If stays were discretionary, then they often will be denied—albeit wrongly—in cases in which the denial of
arbitration ultimately is reversed on appeal.
Defendants in those cases would suffer the permanent loss of the FAA’s protections. That is because the
entire point of arbitration is to avoid litigation in
court. Congress enacted the FAA—requiring courts to
enforce arbitration agreements according to their
terms (see 9 U.S.C. §§ 3-4)—so that parties can choose
with whom they will arbitrate, tailor the applicable
rules to their needs, select an expert decisionmaker,
4
and avoid the undue publicity, disproportionate expense and delay, and adversarial nature of litigation
in court.
Each of these substantive rights protected by the
FAA would be denied if the defendant must proceed
with litigation while an appeal is pending. And the
benefits of arbitration, including the cost savings it
generates, would disappear entirely.
In other situations in which denial of a stay would
effectively deprive the appellant of a right not to litigate in court—such as official immunity—stays pending appeal are automatic. The same principle applies
to appeals from the denial of arbitration.
Moreover, even if, contrary to our submission, the
FAA does not require a stay, a proper application of
the traditional factors governing stays during other
types of appeals will require a stay during a non-frivolous appeal of the denial of arbitration. Most significantly, defendants are irreparably harmed because
the very right they seek to vindicate on appeal, the
right to avoid litigation in court, is lost in the absence
of a stay. In addition, the balance of the equities and
the public interest weigh in favor of a stay in light of
the policy embodied in the FAA’s protections, the need
to conserve judicial resources, and the availability of
pre-judgment interest to protect plaintiffs against any
harm that could result from delayed proceedings.
For these reasons, the decisions below should be
reversed.
5
ARGUMENT
District Court Proceedings Should Be Stayed
During Non-Frivolous Appeals From The Denial
Of Arbitration.
Forcing parties to litigate in court during an appeal from an order denying arbitration necessarily deprives them of the substantive protections of the FAA,
which entitles parties to resolve disputes under simplified and streamlined procedures rather than the
complex rules governing litigation in court.
That is not mere speculation: litigated cases
demonstrate that those burdens often are imposed on
parties in the circuits in which a stay of proceedings
pending appeal is not automatic.
In addition, courts automatically grant stays
pending appeal when parties take interlocutory appeals to vindicate the denial of other rights to avoid
litigation—which supports the same rule here. Finally, the factors that govern stays during other types
of appeals—which lower courts hostile to arbitration
have been misinterpreting—require a stay pending
appeal in virtually all non-frivolous appeals from a denial of arbitration.
A. Requiring Parties to Litigate the Underlying Claims During an Appeal Vitiates
the Benefits of Arbitration Protected by
the FAA.
1. Congress enacted the FAA to enable parties to avoid the disadvantages of litigation in court.
The FAA protects parties’ right to agree to “trade[]
the procedures and opportunity for review of the
6
courtroom for the simplicity, informality, and expedition of arbitration.” Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985).
Parties choose to “forgo the procedural rigor” of litigation under court rules to “realize the benefits of private dispute resolution: lower costs, greater efficiency
and speed, and the ability to choose expert adjudicators to resolve specialized disputes.” Stolt-Nielsen S.A.
v. AnimalFeeds Int’l Corp., 559 U.S. 662, 685 (2010);
see also, e.g., Lamps Plus, Inc. v. Varela, 139 S. Ct.
1407, 1416 (2019) (same).
Congress has recognized that arbitration avoids
the “delays, expense, uncertainties, loss of control, adverse publicity, and animosities that frequently accompany litigation.” Y2K Act of 1999, Pub. L. No. 10637 § 2(a)(3)(B)(iv), 113 Stat. 185; see also H.R. Rep.
No. 542, 97th Cong., 2d Sess. 13 (1982) (arbitration is
“cheaper and faster than litigation,” has “simpler procedural and evidentiary rules,” “minimizes hostility,”
and is “more flexible in regard to scheduling”). Indeed,
the House Report accompanying the FAA declared
that “the costliness and delays of litigation * * * can
be eliminated by agreements for arbitration[.]” H.R.
Rep. No. 68-96, at 2 (1924). And the Senate Report
agreed that arbitration allows parties to “avoid the delay and expense of litigation.” S. Rep. No. 68-536, at 3
(1924).
“[T]he relative informality of arbitration” and
“procedures [that] are more streamlined” are among
“the chief reasons that parties select arbitration.” 14
Penn Plaza LLC v. Pyett, 556 U.S. 247, 269 (2009).
“[T]he informality of arbitral proceedings * * * reduc[es] the cost and increas[es] the speed of dispute
resolution.” AT&T Mobility LLC v. Concepcion, 563
7
U.S. 333, 345 (2011); see also Allied-Bruce Terminix
Cos., Inc. v. Dobson, 513 U.S. 265, 280 (1995).2
For that reason, the FAA, “[n]ot only * * * require[s] courts to respect and enforce agreements to
arbitrate; it also specifically direct[s] them to respect
and enforce the parties’ chosen arbitration procedures.” Epic, 138 S. Ct. at 1621 (citing 9 U.S.C. §§ 34). That “‘includ[es] terms that specify with whom the
parties choose to arbitrate their disputes and the rules
under which that arbitration will be conducted.’” Ibid.
(quoting Am. Express, 570 U.S. at 233).
Judicial “procedures” often are “at odds with arbitration’s informal nature.” Viking River Cruises, 142
S. Ct. at 1918. For example, if class procedures were
engrafted onto arbitration, “the virtues Congress originally saw in arbitration, its speed and simplicity and
inexpensiveness, would be shorn away and arbitration would wind up looking like the litigation it was
meant to displace.” Epic, 138 S. Ct. at 1623.
Similarly, discovery in arbitration typically is
“not * * * as extensive as in the federal courts.” Gilmer
v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31
2 Early advocates of the FAA championed arbitration because,
unlike in court, “[t]here are no technical pleadings * * * [and] no
multiplicity of motions[.]” A.B.A. Committee on Commerce,
Trade and Commercial Law, The United States Arbitration Law
and Its Application, 11 A.B.A. J. 153, 156 (1925); Percy Werner,
Voluntary Tribunals, 56 Am. L. Rev. 852, 866 (1922) (“[Arbitration] does away with * * * the technicalities of pleading, trifling
exceptions relating to procedure, and rules of evidence * * * and
gets down to the marrow of a controversy in a simple, speedy,
direct manner.”).
8
(1991). That is because arbitrators can and do adapt
the discovery process to the needs of the case.3
Parties also value the “presumption of privacy and
confidentiality” of arbitration proceedings. Stolt-Nielsen, 559 U.S. at 686 (quoting amicus brief of the American Arbitration Association). And the “less adversarial setting” of arbitration is “less toxic to relationships,” which is important to parties seeking to preserve ongoing “amical” relationships. Susanna S.
Fodor & Steven C. Bennett, Arbitrating Commercial
Real Estate Lease Disputes, 65 Disp. Resol. J. 90, 9293 (2010).
Finally, arbitration can lead to better outcomes by
permitting the parties to employ specialized decisionmakers. See, e.g., Alan Schwartz & Simone M.
Sepe, Economic Challenges for the Law of Contract, 38
Yale J. Reg. 678, 699 (2021) (“Arbitrators might be
better than courts at evaluating the parties’ information.”). Indeed, one of the principal reasons that arbitration became popular—and that led to the FAA’s
enactment—is that specialist arbitrators had greater
familiarity with industry customs and the nature of
See, e.g., Albert Bates, Jr., Controlling Time and Cost in Arbitration: Actively Managing the Process and “Right-Sizing” Discovery, 67-Oct. Disp. Resol. J. 54, 58 (2012) (describing arbitral
“authority to ensure that discovery * * * matches the needs of the
case”); John B. McArthur, Do Arbitrators Know Something that
Judges Don’t?, 94 Judicature 107, 109 (2010) (detailing “skillful
arbitrators’ case management” of discovery); Hon. Shira A.
Sheindlin, The Intersection of E-Discovery and Arbitration, 2021
Practitioner Insights Commentators 280 (2021) (arbitrators can
prevent the “fishing expeditions” and “scorched earth tactics”
common in court).
3
9
transactions than generalist judges. See, e.g., Jerold
S. Auerbach, Justice Without Law? 32-33 (1983).
Arbitration is “consistently faster and less expensive than litigation.” John S. Kiernan, Reducing the
Cost and Increasing the Efficiency of Resolving Commercial Disputes, 40 Cardozo L. Rev. 187, 211 n.20
(2018) (citing studies). The cost savings can be substantial. One recent study of 100,000 cases in arbitration or federal court between 2011 and 2015 found
that the increased speed of arbitration allowed the arbitrating parties to save $22.9 billion—and that the
reduced court congestion led to savings to the public
of $59.2 billion.4
To secure these benefits of traditional arbitration
the FAA requires courts to “rigorously enforce agreements to arbitrate.” Dean Witter Reynolds, Inc. v.
Byrd, 470 U.S. 213, 221 (1985).
2. Denying a stay pending appeal subjects
parties to the very disadvantages of litigation that the FAA entitles them to
avoid.
Requiring appellants to litigate in district court
while the court of appeals decides whether the dispute
should be arbitrated subjects them to the very court
procedures that the arbitration agreement was intended to replace—effectively depriving them of the
FAA’s substantive protections before a final determination regarding the enforceability of that agreement.
Roy Weinstein et al., Efficiency and Economic Benefits of Dispute Resolution through Arbitration Compared with U.S. District
Court Proceedings 4 (Mar. 2017), https://go.adr.org/impactsofdelay.html.
4
10
For example, consider the typical class or collective action in which a motion to compel arbitration on
an individual basis is denied. If the dispute were arbitrated, it would take place without class proceedings.
That is because class procedures “interfere[] with * * *
the traditionally individualized and informal nature
of arbitration.” Epic, 138 S. Ct. at 1622-23. The FAA
therefore protects the “intention to use individualized
rather than class or collective action procedures” in
arbitration * * * pretty absolutely.” Id. at 1621.
But if the district court refuses to compel arbitration and a stay pending appeal were denied, litigation
in the district court would proceed on a classwide basis, with all the “procedural formality” that putative
class actions entail. Concepcion, 563 U.S. at 349.
Classwide discovery would be ordered and class certification briefed and argued; the district court could require that notice be sent to absent class members. See
Fed. R. Civ. P. 23(c). And the detailed federal procedural rules that govern every other aspect of a court
proceeding—motions to dismiss, summary judgment
motions, and other pretrial proceedings, not to mention the trial itself—would apply.
Permitting class proceedings while the appeal is
pending strips parties of their right under the FAA to
agree “with whom” they will arbitrate and “sacrifices
the principal advantage of arbitration—its informality—and makes the process slower, more costly, and
more likely to generate procedural morass than final
judgment.” Concepcion, 563 U.S. at 344, 348.
Litigation pending appeal also subverts the parties’ right under the FAA to select “the rules” governing adjudication of the dispute. Epic, 138 S. Ct. at
1621. Instead, to the extent that litigation proceeds,
11
the Federal Rules of Civil Procedure and the Federal
Rules of Evidence will control.
For example, allowing discovery under the permissive procedures of the Federal Rules of Civil Procedure, which routinely occurs when a stay is denied,
would have an enormous impact, especially in class or
collective actions. Classwide discovery that is forbidden by the arbitration agreement would nonetheless
proceed in the absence of a stay.
Such discovery is asymmetric: the burdens fall almost entirely on defendants.5 Indeed, in consumer
and employment disputes, the named plaintiffs generally have few if any documents to search and produce. By contrast, business defendants often have
enormous databases, millions of e-mails, and numerous other sources of electronic documents that must
be examined, at great expense.6
Thus, “discovery costs now comprise between 50
and 90 percent of the total litigation costs in a case.”
See, e.g., Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558-59
(2007); Charles Yablon & Nick Landsman-Roos, Discovery about
Discovery: Sampling Practice and the Resolution of Discovery
Disputes in an Age of Ever-Increasing Information, 34 Cardozo
L. Rev. 719, 726-27 (2012); Rodney A. Satterwhite & Matthew J.
Quatrara, Asymmetrical Warfare: The Cost of Electronic Discovery in Employment Litigation, 14 Rich. J.L. & Tech. 9, ¶¶ 6-8
(2008).
5
See, e.g., Swanson v. Citibank, N.A., 614 F.3d 400, 411 (7th
Cir. 2010) (Posner, J., dissenting in part) (“[T]he cost of discovery
to a defendant” because of e-discovery “has become in many cases
astronomical.”); Duke Conf. Subcomm., Advisory Comm. on Civ.
Rules, Report of the Duke Conference Subcommittee 79, 83 (2014)
(survey of in-house lawyers found that 90% reported that “discovery costs in federal court are not generally proportional to the
needs of the case.”).
6
12
John H. Beisner, Discovering a Better Way: The Need
for Effective Civil Litigation Reform, 60 Duke L.J. 547,
549 (2010). And “discovery costs in cases that do not
go to trial”—the vast majority of cases—“are closer to
seventy percent of total costs.” Andrew M. Pardieck,
The Shifting Sands of Cost Shifting, 69 Clev. St. L.
Rev. 349, 424 (2021). Even relatively minor aspects of
the discovery process, such as the preparation of privilege logs, are enormously expensive. See, e.g., The Sedona Conference Commentary on Protection of Privileged ESI, 17 Sedona Conf. J. 95, 103 (2016) (preparing privilege logs alone “can consume hundreds of
thousands of dollars or more”).
In the aggregate, these expenses are enormous. A
February 2022 survey of in-house lawyers at 400 Fortune 1000 companies found that, in 2021, spending on
the defense of putative class actions for these 400 companies alone had “crossed the $3 billion threshold for
the first time.”7 Spending to defend putative class actions was also expected to continue its steep rise in
recent years:8
Carlton Fields, Class Action Survey 6 (2022), https://www.classactionsurvey.com.
7
8
Id. at 7.
13
The burden of discovery is not just monetary. Discovery also entails “disruption of the defendant’s operations,” as employees must spend time responding
to document requests and preparing and sitting for
depositions. Swanson, 614 F.3d at 411.
If defendants are denied a stay pending appeal of
the denial of arbitration, they will face all these costs
and burdens of litigation. Even if they ultimately prevail on appeal, the victory would be pyrrhic: they have
already been subjected to the complex judicial procedures that the FAA authorized them to avoid.9
That scenario has played out on numerous occasions. For example:
In In re Pacific Fertility Center Litigation, 2019
WL 2635539, at *1 (N.D. Cal. June 27, 2019),
See, e.g., Edward H. Cooper, 15B Federal Practice and Procedure § 3914.17 (2d ed. Supp. 2022) (“A complete stay of district
court proceedings pending appeal from a refusal to order arbitration is desirable” because the “purposes of arbitration include
avoiding the burdens of litigation.”).
9
14
where a stay was denied, the defendants were
required to engage in extensive classwide discovery and had to brief discovery and Daubert
motions as well as motions to dismiss and for
class certification, all before the Ninth Circuit
reversed the order denying arbitration. In re
Pac. Fertility Ctr. Litig., 814 F. App’x 206, 209
(9th Cir. 2020).
In Hendricks v. UBS Financial Services, Inc.,
546 F. App’x 514 (5th Cir. 2013), before the denial of arbitration was reversed, the district
court denied a stay, required classwide discovery to be completed, decided discovery motions,
and certified a class. Dkts. 37-135, Hendricks v.
UBS Fin. Servs., Inc., No. 2:12-cv-606-JRGRSP (E.D. Tex.).
In McArdle v. AT&T Mobility LLC, 657 F.
Supp. 2d 1140, 1151 (N.D. Cal. 2009), after the
denial of a stay pending appeal, the defendant
was forced to complete classwide discovery and
brief class certification. Dkts. 74-183, McArdle
v. AT&T Mobility LLC, No. 4:09-cv-1117 (N.D.
Cal.). The denial of arbitration was then reversed. McArdle v. AT&T Mobility, LLC, 474 F.
App’x 515, 516 (9th Cir. 2012).10
10 After the parties completed an arbitration, the district court
vacated the award on the ground that an intervening change in
state law had made the arbitration agreement unenforceable,
warranting reconsideration of the order compelling arbitration.
McArdle v. AT&T Mobility LLC, 2017 WL 4354998, at *3 (N.D.
Cal. Oct. 2, 2017), aff’d, 772 F. App’x 575 (9th Cir. 2019).
15
In Fernandez v. Bridgecrest Credit Co., 2020
WL 7711837, at *4 (C.D. Cal. May 4, 2020), after the denial of a stay, the defendant was
forced to complete classwide discovery before
reversal of the denial of the motion to compel
arbitration. Fernandez v. Bridgecrest Credit
Co., 2022 WL 898593, at *1 (9th Cir. Mar. 28,
2022).
In Momot v. Mastro, 2010 WL 11538047, at *2
(D. Nev. Feb. 24, 2010), after a stay was denied,
the defendant was forced to litigate all the way
through summary judgment before the order
denying arbitration was reversed. Momot v.
Mastro, 652 F.3d 982, 983-84 (9th Cir. 2011).
In Geier v. m-Qube Inc., 824 F.3d 797, 799 (9th
Cir. 2016), after a stay was denied but before
the reversal of the denial of arbitration, the
parties completed discovery and the court decided class certification. Geier v. m-Qube Inc.,
314 F.R.D. 692, 701 (W.D. Wash. 2016).
In Manigault v. Macy’s East, LLC, 506 F. Supp.
2d 156, 165 (E.D.N.Y. 2007), after a stay was
denied, the defendant was subjected to over a
year of classwide discovery before the denial of
arbitration was reversed. Manigault v. Macy’s
East, LLC, 318 F. App’x 6 (2d Cir. 2009).
In other cases, defendants that were denied stays
were forced to proceed with discovery and sometimes
engage in various types of motion practice. See, e.g.,
Ohring v. UniSea, Inc., 2021 WL 2936641 (W.D.
Wash. July 13, 2021), rev’d, 2022 WL 1599127, at *1
16
(9th Cir. May 20, 2022) (merits discovery); Cottrell v.
AT&T Inc., 2020 WL 2747774 (N.D. Cal. May 27,
2020), rev’d, 2021 4963246, at *2 (9th Cir. Oct. 26,
2021) (classwide discovery and motions to dismiss and
regarding discovery disputes); Mohamed v. Uber
Techs., Inc., 109 F. Supp. 3d 1185 (N.D. Cal. 2015),
rev’d, 848 F.3d 1201, 1206 (9th Cir. 2016) (merits discovery); Meeks v. Experian Info. Sols., Inc., 2021 WL
5149066 (N.D. Cal. Nov. 5, 2021), rev’d, Meeks v. Experian Info. Servs., Inc., 2022 WL 17958634, at *2 (9th
Cir. Dec. 27, 2022) (classwide discovery); Kilgore v.
Keybank Nat’l Ass’n, 2009 WL 1975271 (N.D. Cal.
July 8, 2009), rev’d, 718 F.3d 1052, 1057, 1060-61 (9th
Cir. 2013) (merits discovery and motion to dismiss).
These cases are likely only the tip of the iceberg—
not every denial of a stay is readily located from
searching electronic databases.
This permanent deprivation of the FAA’s protections cannot be justified on the assumption that appeals of arbitration denials are meritless. To the contrary, courts of appeals regularly reverse or vacate orders denying motions to compel arbitration. Since
2018, at least 99 such decisions have been reversed or
vacated in whole or in part by the courts of appeals.11
11 Meeks v. Experian Info. Servs., Inc., 2022 WL 17958634, at *2
(9th Cir. Dec. 27, 2022); Ballou v. Asset Mktg. Servs., LLC, 46
F.4th 844 (8th Cir. 2022); Robert D. Mabe, Inc. v. OptumRX, 43
F.4th 307 (3d Cir. 2022); Becker v. Delek US Energy, Inc., 39
F.4th 351 (6th Cir. 2022); United Steel v. Nat’l Grid, 38 F.4th 279
(1st Cir. 2022); Benchmark Ins. Co. v. SUNZ Ins. Co., 36 F.4th
766 (8th Cir. 2022); Attix v. Carrington Mortg. Servs., LLC, 35
F.4th 1284 (11th Cir. 2022); Ohring v. UniSea, Inc., 2022 WL
1599127, at *1 (9th Cir. May 20, 2022); Fernandez v. Bridgecrest
Credit Co., 2022 WL 898593 (9th Cir. Mar. 28, 2022); Casa Arena
17
Blanca LLC v. Rainwater by Estate of Green, 2022 WL 839800
(10th Cir. Mar. 22, 2022); In re Rotavirus Vaccines Antitrust
Litig., 30 F.4th 148 (3d Cir. 2022); Alvarez v. Sheraton Operating
Corp., 2022 WL 67339 (9th Cir. Jan. 6, 2022); Hause v. City of
Sunbury, 2022 WL 738611 (3d Cir. Mar. 11, 2022); Zachman v.
Hudson Valley Fed. Credit Union, 49 F.4th 95 (2d Cir. 2022);
Knapke v. PeopleConnect, Inc., 38 F.4th 824 (9th Cir. 2022); Triplet v. Menard, Inc., 42 F.4th 868 (8th Cir. 2022); Zirpoli v. Midland Funding, LLC, 48 F.4th 136 (3d Cir. 2022); Berkeley Cnty.
Sch. Dist. v. Hub Int’l Ltd., 2022 WL 17974626 (4th Cir. Dec. 28,
2022); Barnett v. Am. Express Nat’l Bank, 37 F.4th 1100 (5th Cir.
2022); Ferrell v. Cypress Env’t Mgmt.-TIR, LLC, 2021 WL
5576677 (10th Cir. Nov. 30, 2021); Reeves v. Enter. Prods. Partners, LP, 17 F.4th 1008 (10th Cir. 2021); Cunningham v. Lyft,
Inc., 17 F.4th 244 (1st Cir. 2021); Martinez-Gonzalez v. Elkhorn
Packing Co., 25 F.4th 613 (9th Cir. 2022); Local Union 97 v. NRG
Energy, Inc., 53 F.4th 42 (2d Cir. 2022); Dekker v. Vivint Solar,
Inc., 2021 WL 4958856 (9th Cir. 2021); Cottrell v. AT&T Inc.,
2021 WL 4963246, at *2 (9th Cir. Oct. 26, 2021); Foster v.
Walmart, Inc., 15 F.4th 860 (8th Cir. 2021); Brice v. Sequoia Cap.
Operations, LLC, 859 F. App’x 31 (9th Cir. 2021); Hodges v. Comcast Cable Commc’ns, LLC, 21 F.4th 535 (9th Cir. 2021); Gallagher v. Vokey, 860 F. App’x 354 (5th Cir. 2021); Ciccio v.
SmileDirectClub, LLC, 2 F.4th 577 (6th Cir. 2021); Hamrick v.
Partsfleet, LLC, 1 F.4th 1337 (11th Cir. 2021); Donelson v.
Ameriprise Fin. Servs., Inc., 999 F.3d 1080 (8th Cir. 2021); Zoller
v. GCA Advisors, LLC, 993 F.3d 1198 (9th Cir. 2021); Hearn v.
Comcast Cable Commc’ns, LLC, 992 F.3d 1209 (11th Cir. 2021);
Polyflow, L.L.C. v. Specialty RTP, L.L.C., 993 F.3d 295 (5th Cir.
2021); Balan v. Tesla, Inc., 840 F. App’x 303 (9th Cir. 2021);
Swiger v. Rosette, 989 F.3d 501 (6th Cir. 2021); Air-Con, Inc. v.
Daikin Applied Latin Am., LLC, 21 F.4th 168 (1st Cir. 2021);
Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 667 (9th Cir. 2021);
Harper v. Amazon.com Servs., Inc., 12 F.4th 287 (3d Cir. 2021);
Frederick v. Law Off. of Fox Kohler & Assocs. PLLC, 852 F. App’x
673 (3d Cir. 2021); Commc’ns Workers of Am. v. AT&T Inc., 6
F.4th 1344 (D.C. Cir. 2021); ADT, L.L.C. v. Richmond, 18 F.4th
149 (5th Cir. 2021); Berk v. Coinbase, Inc., 840 F. App’x 914 (9th
Cir. 2020); Nettles v. Midland Funding LLC, 983 F.3d 896 (7th
Cir. 2020); Solomon v. CARite Corporate LLC, 837 F. App’x 355
18
(6th Cir. 2020); Borror Prop. Mgmt., LLC v. Oro Karric N., LLC,
979 F.3d 491 (6th Cir. 2020); Neal v. Navient Sols., LLC, 978 F.3d
572 (8th Cir. 2020); Mendoza v. Fred Haas Motors, Ltd., 825 F.
App’x 200 (5th Cir. 2020); Dohrmann v. Intuit, Inc., 823 F. App’x
482 (9th Cir. 2020); Mey v. DIRECTV, LLC, 971 F.3d 284 (4th
Cir. 2020); In re Pac. Fertility Ctr. Litig., 814 F. App’x 206, 209
(9th Cir. 2020); Mason v. Midland Funding LLC, 815 F. App’x
320 (11th Cir. 2020); Darrington v. Milton Hershey Sch., 958 F.3d
188 (3d Cir. 2020); Richardson v. Coverall N. Am., Inc., 811 F.
App’x 100 (3d Cir. 2020); Stiner v. Brookdale Senior Living, Inc.,
810 F. App’x 531 (9th Cir. 2020); Ashford v. PricewaterhouseCoopers LLP, 954 F.3d 678 (4th Cir. 2020); Int’l Union v. Trane
U.S. Inc., 946 F.3d 1031 (8th Cir. 2020); In re Mercedes-Benz
Emissions Litig., 797 F. App’x 695 (3d Cir. 2020); Cipolla v. Team
Enters., LLC, 810 F. App’x 562 (9th Cir. 2020); Noe v. City Nat’l
Bank of W. Va., 828 F. App’x 163 (4th Cir. 2020); McCullough v.
AIG Ins. Hong Kong Ltd., 828 F. App’x 704 (11th Cir. 2020);
Reichert v. Rapid Invs., Inc., 826 F. App’x 656 (9th Cir. 2020);
Matter of Willis, 944 F.3d 577 (5th Cir. 2019); Hudson v. P.I.P.
Inc., 793 F. App’x 935 (11th Cir. 2019); Plummer v. McSweeney,
941 F.3d 341 (8th Cir. 2019); In re Remicade (Direct Purchaser)
Antitrust Litig., 938 F.3d 515 (3d Cir. 2019); Dorman v. Charles
Schwab Corp., 934 F.3d 1107 (9th Cir. 2019); Abdullayeva v. Attending Homecare Servs. LLC, 928 F.3d 218 (2d Cir. 2019);
Griggs v. Kenworth of Montgomery, Inc., 775 F. App’x 608 (11th
Cir. 2019); Am. Trucking & Transp. Ins. Co. v. Nelson, 771 F.
App’x 445 (9th Cir. 2019); Halliburton Energy Servs., Inc. v. Ironshore Specialty Ins. Co., 921 F.3d 522 (5th Cir. 2019); Berkeley
Cnty. Sch. Dist. v. Hub Int’l Ltd., 944 F.3d 225 (4th Cir. 2019);
Egan v. Live Nation Worldwide, Inc., 764 F. App’x 204 (3d Cir.
2019); Doctor’s Assocs., Inc. v. Alemayehu, 934 F.3d 245 (2d Cir.
2019); Int’l Corrugated & Packing Supplies, Inc. v. Lear Corp.,
771 F. App’x 545 (5th Cir. 2019); Novic v. Credit One Bank, Nat’l
Assoc., 757 F. App’x 263 (4th Cir. 2019); Noye v. Johnson & Johnson Servs., Inc., 765 F. App’x 742 (3d Cir. 2019); Southard v. Newcomb Oil Co., LLC, 2019 WL 8111958 (6th Cir. Nov. 12, 2019);
Am. Fam. Life Assurance Co. of N.Y. v. Baker, 778 F. App’x 24
(2d Cir. 2019); Conduragis v. Prospect Chartercare, LLC, 909
F.3d 516 (1st Cir. 2018); Parks IP Law, LLC v. Wood, 755 F.
App’x 884 (11th Cir. 2018); Beltran v. AuPairCare, Inc., 907 F.3d
19
Even this large number of errors understates the
problem, because many defendants capitulate to settlements and thus abandon their appeals to stop the
mounting cost of litigation.
That is because, when putative class or collective
actions are not stayed, plaintiffs can leverage the
enormous costs of litigation to pressure defendants
into what Judge Friendly termed “blackmail settlements” that are reached regardless of the merits of the
arbitration appeal or even the underlying claims.
Henry J. Friendly, Federal Jurisdiction: A General
View 120 (1973); see also, e.g., Amgen Inc. v. Conn.
Ret. Plans & Tr. Funds, 568 U.S. 455, 474-75 (2013)
(explaining that class actions place defendants under
“substantial pressure * * * to settle”); Concepcion, 563
U.S. at 350 (noting “the risk of ‘in terrorem’ settlements that class actions entail[ed]”). The denial of a
stay thus effectively prevents these defendants from
any chance of vindicating their right to arbitrate.
1240 (10th Cir. 2018); JPay, Inc. v. Kobel, 904 F.3d 923 (11th Cir.
2018); O’Connor v. Uber Techs., Inc., 904 F.3d 1087 (9th Cir.
2018); Dickson v. Gospel for ASIA, Inc., 902 F.3d 831 (8th Cir.
2018); Gaffers v. Kelly Servs., Inc., 900 F.3d 293 (6th Cir. 2018);
Arnold v. Homeaway, Inc., 890 F.3d 546 (5th Cir. 2018); Williams-Jackson v. Innovative Senior Care Home Health of Edmond, LLC, 727 F. App’x 965 (10th Cir. 2018); Tassy v. Lindsay
Ent. Enters., Inc., 2018 WL 1582226 (6th Cir. Feb. 22, 2018);
Ridgeway v. Nabors Completion & Prod. Servs. Co., 725 F. App’x
472 (9th Cir. 2018); Atkins v. CGI Techs. & Sols., Inc., 724 F.
App’x 383 (6th Cir. 2018); Mandviwala v. Five Star Quality Care,
Inc., 723 F. App’x 415 (9th Cir. 2018); Ziglar v. Express Messenger Sys., Inc., 739 F. App’x 444 (9th Cir. 2018); Weiss v. Macy’s
Retail Holdings, Inc., 741 F. App’x 24 (2d Cir. 2018); Gutierrez v.
Wells Fargo Bank, NA, 889 F.3d 1230 (11th Cir. 2018); Miner v.
Ecolab, Inc., 744 F. App’x 399 (9th Cir. 2018).
20
The bottom line is that, without a stay, defendants
routinely will permanently be deprived of the FAA’s
protections. And everyone suffers as a result—the resulting rise in the cost of dispute resolution ripples out
throughout the rest of the economy in the form of
higher prices to consumers and lower wages to workers.
B. District Court Proceedings Should Virtually Always Be Stayed During Appeals of
a Denial of Arbitration.
Petitioner’s brief (at 20-38) explains that, as a
matter of text and structure, the FAA requires a stay
of district court proceedings. Two key points reinforce
that conclusion. First, as petitioner notes (at 38-43) in
other contexts in which a defendant appeals the denial of a right to avoid litigation, stays pending appeal
are automatic—and the same approach should apply
here, where the FAA confers a right to avoid litigation
in court. Second, even if an appeal did not divest the
district court of jurisdiction, a proper assessment of
the traditional factors governing stays pending appeal
demonstrates that a stay should be granted in any
non-frivolous appeal from the denial of arbitration.
1. Stays pending appeal are automatic in
comparable interlocutory appeals.
Appeals from the denial of arbitration are not the
only ones in which courts have held that a stay of district court proceedings is necessary to avoid impairing
the underlying right during the appeal.
Consider an appeal from the denial of absolute or
qualified immunity. As this Court has explained, both
are “an immunity from suit rather than a mere defense to liability”; that immunity “is effectively lost if
21
a case is erroneously permitted to go to trial.” Mitchell
v. Forsyth, 472 U.S. 511, 526 (1985). This Court
warned “that even such pretrial matters as discovery
are to be avoided[.]” Ibid. (citing Harlow v. Fitzgerald,
457 U.S. 800, 817 (1982)). So “when a public official
takes an interlocutory appeal to assert a colorable
claim to absolute or qualified immunity from damages, the district court must stay proceedings.” Allman v. Smith, 764 F.3d 682, 684 (7th Cir. 2014) (emphasis added; internal quotation marks omitted); see
also, e.g., Hegarty v. Somerset Cnty., 25 F.3d 17, 18
(1st Cir. 1994).
The same is true if the appeal is from a denial of
sovereign immunity, see, e.g., Princz v. Fed. Rep. of
Germany, 998 F.2d 1, 1 (D.C. Cir. 1993) (per curiam),
or from the denial of double-jeopardy protections, see,
e.g., United States v. LaMere, 951 F.2d 1106, 1108 (9th
Cir. 1991). As one treatise observes, during a non-frivolous appeal of an order denying immunity, “all proceedings must be stayed.” Edward H. Cooper, 15A
Federal Practice and Procedure § 3914.10.8 (3d ed.
Supp. 2022).
This principle—that the right to avoid litigation
in court would be compromised without a stay—applies with equal force to appeals from the denial of arbitration. In both situations, withholding a stay “results in a denial or impairment of the appellant’s ability to obtain its legal entitlement to avoidance of litigation.” McCauley v. Halliburton Energy Servs., Inc.,
413 F.3d 1158, 1162 (10th Cir. 2005) (analogizing to
qualified immunity appeals); see also Blinco v. Green
Tree Serv., LLC, 366 F.3d 1249, 1252-53 (11th Cir.
22
2004) (per curiam); Bradford-Scott Data Corp. v. Physician Comp. Network, Inc., 128 F.3d 504, 506 (7th
Cir. 1997).
In sum, forcing a defendant to litigate while appealing from the denial of arbitration, as with any
other appeal seeking to vindicate an immunity from
suit, effectively renders a victory on appeal futile. An
automatic stay is needed for precisely the same reason—to protect the underlying right to arbitrate rather than nullifying it by proceeding in court.
2. The traditional stay factors will virtually
always favor a stay until arbitrability is
resolved.
Another reason that an automatic stay is appropriate is that a proper assessment of the factors governing stays pending appeal will always require a stay
during any non-frivolous appeal from the denial of arbitration. Contrary lower court decisions rest on a
misapplication of those factors.
This Court has identified four factors to consider:
(1) whether the stay applicant has made a
strong showing that he is likely to succeed on
the merits; (2) whether the applicant will be
irreparably injured absent a stay; (3) whether
issuance of the stay will substantially injure
the other parties interested in the proceeding;
and (4) where the public interest lies.
Nken v. Holder, 556 U.S. 418, 434 (2009) (quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)).
These factors favor a stay in the context of an appeal of the denial of arbitration. That is another reason why an automatic stay is appropriate. But if the
Court were to conclude that an automatic stay is not
23
warranted, the Court should explain why these factors will virtually always require a stay during any
non-frivolous appeal from the denial of arbitration.
a.
Non-frivolous appeals would involve a serious question as to
whether the claim belongs in arbitration.
As to the first factor—the appellant’s likelihood of
success—the courts of appeals agree that regardless
of whether the appellant can show that success is
probable, if the other stay factors weigh in their favor,
any “serious question[]” on appeal is enough to warrant a stay. See, e.g., Luxshare, Ltd. v. ZF Automotive
US, Inc., 15 F.4th 780, 783 (6th Cir. 2021); Flores v.
Barr, 977 F.3d 742, 746 (9th Cir. 2020); Tex. Democratic Party v. Abbott, 961 F.3d 389, 397 (5th Cir.
2020); Cuomo v. U.S. Nuclear Regul. Comm’n, 772
F.2d 972, 974 (D.C. Cir. 1985). This Court has not
questioned that assumption. See Ala. Ass’n of Realtors
v. Dep’t of Health & Human Servs., 141 S. Ct. 2485,
2487 (2021).
Any non-frivolous appeal in this context should be
treated as raising serious questions. As noted above
(at 16-19), the courts of appeals often reverse denials
of motions to compel arbitration. Unless all (non-frivolous) appeals are deemed serious, there is a substantial risk that district courts would regularly deny
stays improperly, as “it is unlikely that a district court
would ever be able to find that defendants will be
likely to succeed on the merits of their appeal.” C.B.S.
Emps. Fed. Credit Union v. Donaldson, Lufkin & Jenrette Secs. Corp., 716 F. Supp. 307, 309 (W.D. Tenn.
1989); see also, e.g., Murphy v. DIRECTV, Inc., 2008
WL 8608808, at *2 (C.D. Cal. July 1, 2008); Eberle v.
Smith, 2008 WL 238450, at *2 (S.D. Cal. Jan. 29,
24
2008). Indeed, as explained above (at 13-15), numerous district courts have denied stays and then been
reversed on appeal. In fact, in the two cases at issue
here, the district court denied stays, even though, in
the words of one district judge, “I could see a different
legal set of minds looking at this factual pattern and
saying I was wrong.” Joint App’x 754-56.
b.
The defendant would be irreparably harmed by the denial of a stay
in any appeal from the denial of
arbitration.
The irreparable-harm factor weighs heavily in favor of a stay. As discussed above (at 3-4), the FAA
mandates that courts compel arbitration according to
their terms (9 U.S.C. §§ 3-4), which includes terms
specifying with whom parties will arbitrate and under
what rules. Epic, 138 S. Ct. at 1621. Forcing a party
to litigate during the appeal irrevocably strips the defendant of these statutory rights, including:
The right to “use individualized rather than
class or collective action procedures,” which
the FAA “seems to protect pretty absolutely” (ibid.);
The right to choose specialized, “expert adjudicators” rather than generalist judges
(Stolt-Nielsen, 559 U.S. at 685);
The right to choose streamlined rules,
which focuses discovery on important issues and curtails motion practice (as opposed to the broad discovery, class-certification, summary judgment, and evidentiary motion practice common in courts);
and
25
The right to shield adjudicating parties
from publicity and the contentiousness that
litigation in court promotes. See 1 Thomas
H. Oehmke & Joan M. Brovins, Commercial Arbitration § 17:1 (Supp. 2023) (arbitration is “less adversarial than ‘winnertake-all” litigation” and allows “‘airing
dirty laundry’ in private” rather than in
public).
Denial of a stay also deprives parties of the benefits of arbitration, including its cost savings and reduced burdens on the litigating parties’ personnel. See
pages 9-13, supra.
In some contexts, this Court (and others) have
concluded that the cost of further litigation does not
count as irreparable injury. See, e.g., F.T.C. v. Standard Oil Co. of Cal., 449 U.S. 232, 244 (1980) (addressing preliminary injunction); Renegotiation Bd. v. Bannercraft Clothing Co., 415 U.S. 1, 24 (1974); Morgan
Drexen, Inc. v. Consumer Fin. Prot. Bureau, 785 F.3d
684, 695 n.3 (D.C. Cir. 2015) (permanent injunction).
But litigation costs are not the irreparable harm
resulting from denial of a stay pending appeal here.
That harm is the irreparable, and permanent, deprivation of the core right protected by the FAA: the right
to resolve disputes through streamlined rules and procedures before an agreed-upon decisionmaker available in arbitration. Indeed, the only purpose of the appeal is to avoid the loss of these rights and the resulting coerced litigation in court. Congress enacted the
FAA to authorize such motions and interlocutory ap-
26
peals, 9 U.S.C. §§ 3-4, 16(a), specifically to entitle parties to vindicate these rights. See Concepcion, 563
U.S. at 346.12
To be sure, the most extreme example of an irreparable injury would be forcing the defendant to try the
merits in district court while the appeal was pending.
As the Seventh Circuit has observed, “[t]he worst possible outcome would be to litigate the dispute, to have
the court of appeals reverse and order the dispute arbitrated, to arbitrate the dispute, and finally to return
to court to have the award enforced.” Bradford-Scott,
128 F.3d at 506.
But the defendant is just as irreparably harmed if
the district court purports to limit its role to presiding
over discovery. Discovery under court rules usurps the
province of the arbitrators to manage discovery. In
other words, allowing discovery before “the issue of arbitrability is resolved puts the cart before the horse.”
CIGNA HealthCare of St. Louis, Inc. v. Kaiser, 294
F.3d 849, 855 (7th Cir. 2002).
Similarly, allowing wide-ranging discovery under
court rules “would cut against the efficiency and costsaving purposes of arbitration.” Levin, 634 F.3d at
264. The deadweight loss is especially pernicious if
classwide discovery is permitted, which would be irrelevant in an individual arbitration. See, e.g., Del Rio
v. CreditAnswers, LLC, 2010 WL 3418430, at *4 (S.D.
12 See, e.g., Edith H. Jones, Appeals of Arbitration Orders—Com-
ing Out of the Serbonian Bog, 31 S. Tex. L. Rev. 361, 375-76
(1990) (“[Congress’s] choice [in Section 16 to allow immediate appeals of the denial of arbitration] is a “practical one because * * *
the expense and delay associated with preparation for trial
would obviate the benefits of arbitration, producing a costly error
should the district court’s refusal to enforce an arbitration agreement be reversed on appeal.”).
27
Cal. Aug. 26, 2010) (finding defendant will suffer “irreparable injury absent a stay” because the “difference in litigation expenses between a two-party case
and a class action is substantial”).
c.
The balance of the equities always
favors a stay pending appeal.
The balance of the equities also favors a stay during any non-frivolous appeal from the denial of arbitration. As noted above, without a stay, the defendant
would be deprived of the many benefits of arbitration,
which the FAA protects. See pages 5-20, supra.
On the other side of the ledger, however, the plaintiffs would not suffer any comparable irreparable
harm from a stay pending appeal. In virtually all
cases, the plaintiff is seeking monetary relief, such as
damages or restitution. An award of prejudgment interest would therefore compensate for any injury resulting from delay if the plaintiffs ultimately prevail.
See, e.g., Zaborowski v. MHN Gov’t Servs., Inc., 2013
WL 1832638, at *3 (N.D. Cal. May 1, 2013); Murphy,
2008 WL 8608808, at *3. And if the plaintiff were
seeking injunctive relief, she often remains free to
seek a preliminary injunction or temporary restraining order either from the court or an arbitrator to preserve the status quo until the case is arbitrated or litigated. See, e.g., American Arbitration Association
Commercial Arbitration Rule R-38; JAMS Streamlined Arbitration Rules R-19(d); Performance Unlimited, Inc. v. Questar Publishers, Inc., 52 F.3d 1373,
1380 (6th Cir. 1995).
The balancing of the equities also must consider
arbitration’s benefits to plaintiffs. Like the defendant,
plaintiffs realize the efficiencies, cost savings, expedition, improved accuracy of results, greater privacy
28
and control over the selection of the adjudicator, and
the reduced adversarial nature of arbitration.
Nor can class or collective actions substitute for
informal arbitration. Most claims are individualized
and thus cannot be aggregated. See, e.g., Am. Express,
570 U.S. at 229 (Rule 23 “imposes stringent requirements for certification that exclude most claims[.]”).
Even when putative class actions are brought, they
are certified only about 20 percent of the time.13 And
in the inevitable settlement for pennies on the dollar
that follows, only a tiny fraction of class members—
often less than one percent—submit claims.14
Moreover, studies repeatedly have shown that
consumers and employees who arbitrate fare better
than those who litigate in court—they win more often
and receive larger awards.15
In addition, because arbitration reduces the cost
of dispute resolution, the forces of market competition
generally cause much of that cost savings to be passed
13 See Thomas Willging & Shannon Wheatman, Attorney Choice
of Forum in Class Action Litigation: What Difference Does It
Make?, 81 Notre Dame L. Rev. 591, 635-36 (2006).
14 See, e.g., Pollard v. Remington Arms Co., 320 F.R.D. 198, 214-
15 (W.D. Mo. 2017) (citing cases approving settlements with
claims rate under one percent).
15 See, e.g., Nam D. Pham & Mary Donovan, An Empirical As-
sessment of Employment Arbitration, 16 J.L. Econ. & Pol’y 45, 47
(2021) (employees were “three times more likely to win in arbitration than in court” and win “approximately two times the
amount received in judgments obtained in litigation cases”);
Nam D. Pham & Mary Donovan, Fairer, Faster, Better III: An
Empirical Assessment of Consumer & Employment Arbitration,
U.S. Chamber of Commerce Institute for Legal Reform 11, 14
(Mar. 2022), https://bit.ly/3SK7QwA (similar numbers for consumer arbitrations).
29
along to consumers in the form of lower prices and to
employees in the form of higher wages.16 Without arbitration, those cost savings are lost, with negative effects throughout the economy.
d.
The public interest favors a stay
pending appeal.
Finally, the important public policies supporting
the use of arbitration and conservation of judicial and
party resources tip the balance even further in favor
of a stay.
The FAA protects parties seeking to enforce arbitration agreements from being required to litigate
claims. Those protections would be frustrated by the
denial of a stay because those denials sharply raise
the cost of enforcing arbitration agreements. The
“FAA does not sanction” imposition of “preliminary
litigating hurdle[s]” on arbitration that “would undoubtedly destroy the prospect of speedy resolution
that arbitration in general and bilateral arbitration in
particular was meant to secure.” Am. Express, 570
U.S. at 239. Indeed, by diluting the benefits of arbitration, the denial of a stay would undermine the
16 Stephen J. Ware, The Centrist Case for Enforcing Adhesive Ar-
bitration Agreements, 23 Harv. Negotiation L. Rev. 29, 85 (2017)
(“[S]tandard economic analysis suggests that enforcement of adhesive consumer arbitration agreements tends over time to lower
the prices of the goods and services consumers buy.”); Omri BenShahar, Arbitration and Access to Courts: Economic Analysis, in
Regulatory Competition in Contract Law and Dispute Resolution
461 (Horst Eidenmüller, ed. 2013) (because “arbitration is
cheaper for business than litigation,” without arbitration, “some
of the cost of access to litigation would be rolled into the price of
the service,” and “most if not all this cost would be reflected in
higher prices to consumers”).
30
FAA’s goal of “promot[ing] arbitration.” Concepcion,
563 U.S. at 345.
Moreover, “the interests of judicial efficiency and
conservation of resources favor a stay” because, as one
court observed, “[i]t does not make sense for this Court
to expend its time and energy preparing this case for
trial * * * only to learn at a later date from the court
of appeals that it was not the proper forum to hear the
case.” Aviles v. Quick Pick Express, LLC, 2016 WL
6902458, at *4 (N.D. Cal. Jan. 25, 2016) (internal quotation marks omitted); see also Aviles v. Quick Pick
Express, LLC, 703 F. App’x 631, 632 (9th Cir. 2017)
(vacating order denying motion to compel arbitration).
Similarly, the many other parties whose cases
await the district court’s attention would be harmed
by the denial of stays pending appeal. Courts’ already
busy dockets would become even more congested as a
result of the diversion of resources towards cases that
may belong in arbitration.
In sum, the traditional factors all weigh in favor
of a stay pending appeal in every case in which a party
brings a non-frivolous appeal from the denial of arbitration.
31
CONCLUSION
The judgments of the court of appeals should be
reversed.
Respectfully submitted.
ANDREW J. PINCUS
STEPHANIE A. MARTZ
Counsel of Record
National Retail
ARCHIS A. PARASHARAMI
Federation
1101 New York Avenue, KEVIN RANLETT
Mayer Brown LLP
NW #1200
1999 K Street, NW
Washington, DC 20005
Washington, DC 20006
(202) 263-3000
BENJAMIN D. BRIGHT
apincus@mayerbrown.com
Mayer Brown LLP
1221 Avenue of the
Americas
New York, NY 10020
Counsel for Amicus Curiae
JANUARY 2023
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.