Amicus Curiae Brief — Wendy Smith, et al., Petitioners v. Keith Spizzirri, et al.

No. 22-1218

In the Supreme Court of the United States

WENDY SMITH, ET AL.

Petitioners,

v.

KEITH SPIZZIRRI, ET AL.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF OF THE CHAMBER OF COMMERCE

OF THE UNITED STATES OF AMERICA AS

AMICUS CURIAE IN SUPPORT

OF NEITHER PARTY

JENNIFER B. DICKEY

ANDREW J. PINCUS

JONATHAN D. URICK

Counsel of Record

U.S. Chamber

ARCHIS A. PARASHARAMI

Litigation Center

DANIEL E. JONES

1615 H Street, NW

Mayer Brown LLP

Washington, DC 20062 1999 K Street, NW

Washington, DC 20006

(202) 263-3000

apincus@mayerbrown.com

i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES....................................... ii

INTEREST OF THE AMICUS CURIAE....................1

INTRODUCTION AND SUMMARY OF

ARGUMENT ...............................................................2

ARGUMENT ...............................................................4

Section 3 Requires The District Court To

Grant A Stay Of Proceedings When Requested

By One Of The Parties. ...............................................4

A. The text mandates a stay. ...............................4

B. The FAA’s structure confirms that a

stay is mandatory. ...........................................7

CONCLUSION .......................................................... 12

ii

TABLE OF AUTHORITIES

Page(s)

Cases

14 Penn Plaza LLC v. Pyett,

556 U.S. 247 (2009) ................................................ 9

Allied-Bruce Terminix Cos. v. Dobson,

513 U.S. 265 (1995) ................................................ 9

Arabian Motors Grp. W.L.L. v. Ford

Motor Co.,

19 F.4th 938 (6th Cir. 2021) .................... 5, 6, 7, 10

AT&T Mobility LLC v. Concepcion,

563 U.S. 333 (2011) .............................................. 11

Coinbase, Inc. v. Bielski,

599 U.S. 736 (2023) ............................................ 6, 8

Degen v. United States,

517 U.S. 820 (1996) ................................................ 6

Epic Sys. Corp. v. Lewis,

584 U.S. 497 (2018) .............................................. 11

Escoe v. Zerbst,

295 U.S. 490 (1935) ................................................ 4

Green Tree Fin. Corp.-Ala. v. Randolph,

531 U.S. 79 (2000) .............................................. 3, 8

Katz v. Cellco P’Ship,

794 F.3d 341 (2d Cir. 2015) ........................... 5, 6, 8

Lamps Plus, Inc. v. Varela,

139 S. Ct. 1407 (2019) ................................ 7, 10, 11

Lexecon, Inc. v. Milberg Weiss Bershad

Hynes & Lerach,

523 U.S. 26 (1998) .............................................. 4, 5

iii

TABLE OF AUTHORITIES—continued

Page(s)

Lloyd v. HOVENSA, LLC,

369 F.3d 263 (3d Cir. 2004) ......................... 6, 8, 10

Microsoft Corp. v. Baker,

582 U.S. 23 (2017) .............................................. 7, 9

Moses H. Cone Mem’l Hosp. v. Mercury

Constr. Corp.,

460 U.S. 1 (1983) .................................................... 8

Nat’l Ass’n of Mfrs. v. Dep’t of Defense,

583 U.S. 109 (2018) ................................................ 4

Parker Drilling Mgmt. Servs., Ltd. v.

Newton,

139 S. Ct. 1881 (2019) ............................................ 7

United States ex rel. Siegel v. Thoman,

156 U.S. 353 (1890) ................................................ 4

Statutes

Federal Arbitration Act

9 U.S.C. § 3 ..................................................... 3, 4, 6

9 U.S.C. § 5 ....................................................... 3, 10

9 U.S.C. § 7 ....................................................... 3, 10

9 U.S.C. § 9 ....................................................... 4, 10

9 U.S.C. § 10 ..................................................... 4, 10

9 U.S.C. § 11 ..................................................... 4, 10

9 U.S.C. § 16(a)(1) .................................................. 7

9 U.S.C. § 16(a)(1)(B) ..................................... 10, 11

9 U.S.C. § 16(a)(3) .............................................. 3, 8

9 U.S.C. § 16(b) ...................................................... 8

9 U.S.C. § 16(b)(1) .................................................. 3

28 U.S.C. § 1292(b) ...................................................... 8

iv

TABLE OF AUTHORITIES—continued

Page(s)

Other Authorities

BLACK’S LAW DICTIONARY (11th ed.

2019) ....................................................................... 5

THE CENTURY DICTIONARY AND

CYCLOPEDIA (1904 ed.) ........................................... 5

WEBSTER’S INT’L DICTIONARY (2d ed.

1942) ....................................................................... 5

INTEREST OF THE AMICUS CURIAE

The Chamber of Commerce of the United States of

America is the world’s largest business federation. It

represents approximately 300,000 direct members

and indirectly represents the interests of more than

three million companies and professional organizations of every size, in every industry sector, and from

every region of the country. An important function of

the Chamber is to represent the interests of its members in matters before Congress, the Executive

Branch, and the courts. To that end, the Chamber regularly files amicus curiae briefs in cases, like this one,

that raise issues of concern to the Nation’s business

community.1

Many of the Chamber’s members and affiliates

regularly rely on arbitration agreements in their contractual relationships. Arbitration allows them to resolve disputes promptly and efficiently while avoiding

the costs associated with litigation in court—because

arbitration is speedy, fair, inexpensive, and less adversarial than litigation. Based on the policy embodied in the Federal Arbitration Act (FAA), the Chamber’s members and affiliates have structured millions

of contractual relationships around the use of arbitration to resolve disputes.

The Chamber’s members and affiliates, and the

business community more broadly, therefore have a

strong interest in proper interpretation of the FAA.

And, more specifically, they have an interest in ensuring that businesses can enforce arbitration

Pursuant to Rule 37.6, the Chamber affirms that no counsel

for a party authored this brief in whole or in part and that no

entity or person other than the Chamber, its members, or its

counsel made a monetary contribution intended to fund the preparation or submission of this brief.

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agreements under the FAA as quickly and easily as

possible, without the burdens of unnecessary litigation or premature appeals from district court orders

that compel arbitration in accordance with the terms

of the parties’ agreement.

Section 3 of the FAA furthers that important purpose by stating clearly that, upon a party’s request, a

case must be stayed if the court issues an order compelling arbitration. The Chamber files this brief to

urge the Court to interpret Section 3 in accordance

with its plain language.

INTRODUCTION AND

SUMMARY OF ARGUMENT

Federal courts typically face motions to compel arbitration under the following scenario: A plaintiff files

a lawsuit in court, often as a putative class or collective action. The defendant business responds to the

complaint by moving to compel arbitration of the

plaintiff’s dispute on an individual basis and requests

a stay under Section 3 of the FAA pending the outcome of the arbitration. The plaintiff then opposes arbitration, and (sometimes) requests in the alternative

that the court dismiss rather than stay the case so

that the plaintiff can take an immediate appeal from

the order compelling arbitration—an appeal that

would not be available if the case were stayed.

In this case, however, the ordinary alignment of

the parties is reversed. Petitioners—the plaintiffs asserting the underlying claims—have acquiesced to arbitration despite filing a lawsuit. They are the parties

requesting a stay rather than a dismissal.

The unusual posture in which the question presented arises here does not change the answer to that

question. When a court compels arbitration, the text

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and structure of the FAA require the court to stay the

judicial action pending the outcome of the arbitration

whenever a party requests a stay.

Section 3 of the Act states that when claims in a

case are “referable to arbitration” under a written

agreement, a court “shall on application of one of the

parties stay the trial of the action until [the] arbitration has been had in accordance with the terms of the

agreement.” 9 U.S.C. § 3 (emphasis added). Congress’s unambiguous mandate overrides any discretion courts might otherwise have to dismiss cases

pending on their dockets.

The structure of the FAA buttresses that conclusion. Most importantly, a mandatory stay gives effect

to Congress’s decision in Section 16 not to authorize

an immediate appeal from a district court order that

compels arbitration in accordance with the terms of

the arbitration agreement and stays the case under

Section 3. See 9 U.S.C. § 16(b)(1). If a court compelling

arbitration were not required to issue a stay, and

could instead dismiss the lawsuit, the plaintiff would

be able to appeal immediately. See 9 U.S.C. § 16(a)(3);

Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79,

86-89 (2000). Overriding a party’s stay request and instead entering a dismissal therefore effects an impermissible end-run around Section 16’s design.

In addition, when the underlying case is filed in or

removed to federal court, a stay preserves the availability of the federal forum for proceedings related to

the arbitration. Those proceedings can include FAAauthorized judicial intervention in connection with

the arbitration, such as appointing an arbitrator if

necessary under 9 U.S.C. § 5 or compelling witnesses

to attend the arbitration under 9 U.S.C. § 7. They can

also include post-arbitration proceedings to confirm,

4

vacate, or modify the arbitration award under 9

U.S.C. §§ 9-11.

ARGUMENT

Section 3 Requires The District Court To Grant

A Stay Of Proceedings When Requested By One

Of The Parties.

When a court grants a motion to compel arbitration and no part of the case remains in court—either

because the claims are all arbitrable or the parties

have delegated questions of arbitrability to the arbitrator—Section 3 of the FAA requires the court to stay

proceedings upon the request of a party. The court

may not dismiss the case. Section 3’s text and the

FAA’s structure both compel that result.

A. The text mandates a stay.

When a statute’s plain language is unambiguous,

the interpretive “inquiry begins with the statutory

text, and ends there as well.” Nat’l Ass’n of Mfrs. v.

Dep’t of Defense, 583 U.S. 109, 127 (2018) (quotation

marks omitted).

Section 3 is clear: when the district court determines that parties have agreed to arbitrate, it “shall

on application of one of the parties stay the trial of the

action” until the arbitration has been completed. 9

U.S.C. § 3 (emphasis added).

Congress’s use of the word “shall” creates a “mandatory * * * obligation impervious to judicial discretion.” Lexecon, Inc. v. Milberg Weiss Bershad Hynes &

Lerach, 523 U.S. 26, 35 (1998) (citing Anderson v.

Yungkau, 329 U.S. 482, 485 (1947)). “Shall” is “the

language of command.” Escoe v. Zerbst, 295 U.S. 490,

493 (1935); see also United States ex rel. Siegel v.

Thoman, 156 U.S. 353, 360 (1890) (contrasting “shall,”

5

which “indicat[es] command,” with “may,” which indicates “permission”). “The traditional, commonly repeated rule is that shall is mandatory.” Antonin

Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 112 (2012). “[W]hen the word

shall can reasonably be read as mandatory, it ought

to be so read.” Id. at 114.

Dictionaries confirm that conclusion: “The common meaning of ‘shall’ when used in concert with another verb is * * * ‘obliged; must.’” Arabian Motors

Grp. W.L.L. v. Ford Motor Co., 19 F.4th 938, 941 (6th

Cir. 2021) (Sutton, J.) (quoting WEBSTER’S INT’L DICTIONARY 2300 (2d ed. 1942)); see also THE CENTURY

DICTIONARY AND CYCLOPEDIA 5546 (1904 ed.) (defining

“shall” when paired with a verb as “obliged or compelled to”). As Black’s Law Dictionary similarly observes, “drafters typically intend” and “courts typically uphold” the use of “shall” in its “mandatory

sense,” meaning “[h]as a duty to” or “is required to.”

BLACK’S LAW DICTIONARY (11th ed. 2019).

Lower courts that have ordered dismissal rather

than a stay, including the Ninth Circuit here, have invoked a judicial “discretion to dismiss” when all

claims are subject to arbitration. They theorize that

this discretion flows from courts’ inherent authority to

manage their dockets. E.g., Pet. App. 2a, 5a.

But Congress expressly commanded otherwise in

Section 3’s text. Its “use of a mandatory ‘shall’ imposes

discretionless obligations.” Katz v. Cellco P’Ship, 794

F.3d 341, 345 (2d Cir. 2015) (emphasis added; alterations omitted) (quoting Lopez v. Davis, 531 U.S. 230,

241 (2001)); accord Lexecon, 523 U.S. at 35.

To be sure, courts generally possess inherent authority to manage their dockets, but “[i]n many

6

instances the inherent powers of the courts may be

controlled or overridden by statute or rule.” Degen v.

United States, 517 U.S. 820, 823 (1996). Section 3 is

just such a statute: courts’ inherent authority to manage their dockets “cannot trump a statutory mandate,

like Section 3 of the FAA, that clearly removes such

discretion.” Katz, 794 F.3d at 346. As the Third Circuit

put it, Section 3 contains no “exception” for situations

in which a court “finds dismissal to be the preferable

approach.” Lloyd v. HOVENSA, LLC, 369 F.3d 263,

269 (3d Cir. 2004). Judge Sutton, speaking for the

Sixth Circuit, explained that “the Federal Arbitration

Act is not a docket-management statute,” and “cleaning out district court dockets” must take a backseat to

Section 3’s clear instructions. Arabian Motors, 19

F.4th at 943.

It is true that Section 3 refers to staying “the trial”

of the action. 9 U.S.C. § 3. But that language, which

predates by over a decade the advent of the Federal

Rules of Civil Procedure, necessarily requires staying

everything leading up to a trial as well—in other

words, all further litigation of the claim in court. As

this Court recently recognized, a request for arbitration involves “the entire case,” including “pre-trial”

proceedings and “discovery” that the parties “contracted to avoid through arbitration.” Coinbase, Inc. v.

Bielski, 599 U.S. 736, 741-743 (2023) (discussing stays

pending appeal). For the stay under Section 3 to make

any sense, it must preclude all litigation in court with

regard to the claim or claims that the court is sending

to arbitration.

Section 3’s mandatory language is not triggered

until the statute’s conditions are satisfied. Most notably, a stay is not mandatory unless “one of the parties”

has made an “application” requesting one. 9 U.S.C.

7

§ 3. Thus, for example, when all parties request the

dismissal of a lawsuit—or at minimum do not request

a stay—Section 3 does not preclude dismissal. Cf.

Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1414 n.1

(2019) (noting that “no party sought a stay”); Arabian

Motors, 19 F.4th at 942 (acknowledging, without deciding, that dismissal may remain an option in situations in which “both parties request a dismissal” or

“neither party asks for a stay”). Indeed, a dismissal

under such circumstances may effectuate parties’

early settlement of the matter or a voluntary decision

by the plaintiff not to prosecute the claims in either

court or arbitration.2

B. The FAA’s structure confirms that a stay

is mandatory.

While the meaning of Section 3’s text is clear, the

stay requirement is confirmed by Section 3’s “‘place in

the overall statutory scheme.’” Parker Drilling Mgmt.

Servs., Ltd. v. Newton, 139 S. Ct. 1881, 1888 (2019)

(quoting Roberts v. Sea-Land Servs., Inc., 566 U.S. 93,

101 (2012)).

1. Allowing district courts to freely dismiss cases

subject to arbitration would “undercut[] the pro-arbitration appellate-review provisions” found in Section

16 of the FAA. Arabian Motors, 19 F.4th at 942.

When a court denies a request for arbitration, Section 16 authorizes an immediate appeal. See 9 U.S.C.

§ 16(a)(1). By contrast, Congress made clear that

there should not be an automatic immediate appeal

from an interlocutory order that grants arbitration in

2 Of course, a plaintiff cannot use a voluntary dismissal to man-

ufacture an immediate appeal from an order compelling arbitration. See Microsoft Corp. v. Baker, 582 U.S. 23, 36-42 (2017); page

9, infra.

8

accordance with the terms of the parties’ agreement.

Congress permitted such appeals only when certified

under the standards of 28 U.S.C. § 1292(b). See 9

U.S.C. § 16(b).

That asymmetry is no accident. This Court has

long recognized “Congress’ clear intent, in the [Federal] Arbitration Act, to move the parties to an arbitrable dispute out of court and into arbitration as

quickly and easily as possible.” Moses H. Cone Mem’l

Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 22 (1983).

That is why, when Congress enacted Section 16 in

1988, it created “a rare statutory exception to the

usual rule that parties may not appeal before final

judgment” but limited that exception to “orders denying” arbitration. Coinbase, 599 U.S. at 740.

Section 3’s requirement of a stay facilitates Congress’s plan. When a court compels arbitration and enters a stay, the party opposing arbitration ordinarily

cannot take an appeal. A stay therefore “enables parties to proceed to arbitration directly, unencumbered

by the uncertainty and expense of additional litigation” in the form of an interlocutory appeal. Katz, 794

F.3d at 346. Put another way, a stay protects “the

right to proceed with arbitration without the substantial delay arising from an appeal.” Lloyd, 369 F.3d at

271.

If, despite Section 3’s plain language, a court could

dismiss the underlying claims, the party opposing arbitration would be able to take an immediate appeal.

See 9 U.S.C. § 16(a)(3); Randolph, 531 U.S. at 86-89.

Courts lack the power to nullify the distinction drawn

by Section 16 and “confer appellate rights expressly

proscribed by Congress.” Katz, 794 F.3d at 346; see

Lloyd, 369 F.3d at 271 (similar).

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Indeed, whether requested by the party resisting

arbitration or entered sua sponte by a district court, a

dismissal aimed at allowing an immediate appeal

from an order compelling arbitration is just the sort of

circumvention that this Court rejected in Microsoft

Corp. v. Baker, 582 U.S. 23 (2017). As the Court emphasized, litigants and courts may not use dismissal

tactics to undermine “the process Congress has established * * * for determining when nonfinal orders may

be immediately appealed”—in that case, the “careful

calibration” governing interlocutory appeals of orders

granting or denying class certification under Federal

Rule of Civil Procedure 23(f). Id. at 37, 40.

So too here. Courts may not subvert Congress’s

“careful calibration” of the appellate rights specified

in—and precluded by—Section 16. Granting a dismissal that converts an otherwise unappealable interlocutory order in favor of arbitration into a final dismissal order appealable by the party opposing arbitration

would do just that.

Such a result “breed[s] litigation from a statute

that seeks to avoid it.” Allied-Bruce Terminix Cos. v.

Dobson, 513 U.S. 265, 275 (1995). Businesses that

have entered into numerous contracts premised on

“the relative informality of arbitration” and procedures “more streamlined than federal litigation” (14

Penn Plaza LLC v. Pyett, 556 U.S. 247, 269 (2009))

would be unable to avoid the delay and expense of an

appeal either before, or at the same time as, the arbitration.

2. Other provisions of the FAA contemplate the

possibility of continued judicial involvement while the

arbitration is underway. But that involvement would

be more difficult if the district court has dismissed the

case notwithstanding a party’s request for a stay.

10

Section 5 authorizes a court to appoint an arbitrator or fill an arbitrator vacancy if the parties’ chosen

arbitrator or arbitration provider is unavailable. 9

U.S.C. § 5. And Section 7 allows parties to petition a

court to buttress arbitrators’ subpoena power, authorizing the court to compel the attendance of witnesses

at the arbitration and to punish non-compliance with

the same contempt powers available for failing to attend court proceedings. 9 U.S.C. § 7.

As long as the federal court in which the lawsuit

was filed (or to which it was properly removed) has

jurisdiction over the underlying claims and parties, a

stay allows that same court to exercise these supervisory functions, as well as to hear any post-arbitration

proceedings to confirm, vacate, or modify the arbitration award under 9 U.S.C. §§ 9-11. “When a district

court stays a case and retains jurisdiction over it, that

permits the parties to use these mechanisms promptly

and efficiently.” Arabian Motors, 19 F.4th at 941; see

Lloyd, 369 F.3d at 270.

3. Finally, this case does not present any question

regarding the application of Sections 16(a)(1)(B) and

16(b) to a district court order that nominally compels

arbitration, but orders a form of arbitration that is

fundamentally different from what the arbitration

agreement authorizes and the party requesting relief

sought to enforce. This Court saw one such example

in Lamps Plus, where the district court issued an order requiring class arbitration even though the parties’ agreement provided only for individualized arbitration and that is what the party seeking arbitration

had sought.

Though the Court ultimately did not resolve the

question whether Lamps Plus could appeal from that

order under Section 16(a)(1)(B), the provision’s text

11

suggests that it could. Section 16(a)(1)(B) provides for

immediate appeal of an order “denying a petition under section 4 of this title to order arbitration to proceed,” 9 U.S.C. § 16(a)(1)(B), and Section 4 provides

that a party may invoke “a written agreement for arbitration” and petition a court for “an order directing

that such arbitration proceed in the manner provided

for in such agreement,” id. § 4 (emphasis added). This

Court has interpreted the latter provision to “specifically direct [courts] to respect and enforce the parties’

chosen arbitration procedures.” Epic Sys. Corp. v.

Lewis, 584 U.S. 497, 506 (2018).

When a court orders a form of arbitration fundamentally different from that agreed to—as in the case

of class arbitration—its decision, even if nominally

characterized as compelling arbitration, amounts to

the denial of the relief sought in the motion to compel

arbitration. As this Court has recognized, class arbitration “is not arbitration as envisioned by the FAA.”

AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 351

(2011). Class procedures represent a “‘fundamental’

change to the traditional arbitration process” that is

incompatible with “the virtues Congress originally

saw in arbitration, its speed and simplicity and inexpensiveness.” Epic, 584 U.S. at 508-509 (quoting Concepcion, 563 U.S. at 347); cf. Lamps Plus, 139 S. Ct. at

1413, 1414 & n.2 (explaining that “Lamps Plus did not

secure the relief it requested. It sought an order compelling individual arbitration. What it got was an order rejecting that relief and instead compelling arbitration on a classwide basis”—“over the company’s

vigorous opposition”). Such a fundamental change

may well have implications for appellate jurisdiction

under Section 16(a)(1)(B).

12

Thus, in resolving this case, the Court should

avoid passing upon those important questions, which

are neither presented nor fully briefed here.

*

*

*

In sum, the FAA’s text and context leave no doubt

that a party’s request for a stay must be granted when

the district court sends the claims to arbitration.

CONCLUSION

The Court should hold that a Section 3 stay is

mandatory, and dismissal impermissible, when the

district court compels arbitration and a party requests

a stay.

Respectfully submitted.

JENNIFER B. DICKEY

JONATHAN D. URICK

U.S. Chamber

Litigation Center

1615 H Street, NW

Washington, DC 20062

ANDREW J. PINCUS

Counsel of Record

ARCHIS A. PARASHARAMI

DANIEL E. JONES

Mayer Brown LLP

1999 K Street, NW

Washington, DC 20006

(202) 263-3000

apincus@mayerbrown.com

Counsel for Amicus Curiae

MARCH 2024