Amicus Curiae Brief — Nicholas Piazza, et al., Petitioners v. Gramercy Distressed Opportunity Fund II L.P., et al.

Supreme Court briefAug 19, 2024

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No. 24-64

In the Supreme Court of the United States

NICHOLAS PIAZZA, et al.,

Petitioners,

GRAMERCY DISTRESSED

OPPORTUNITY FUND II L.P., et al.,

Respondents.

On Petition for a Writ of Certiorari to the United

States Court of Appeals for the Tenth Circuit

BRIEF OF AMICUS CURIAE CIVIL JUSTICE

ASSOCIATION OF CALIFORNIA IN SUPPORT

OF PETITIONERS

Harry W. R. Chamberlain II

Counsel of Record

Robert M. Dato

BUCHALTER

A Professional Corporation

1000 Wilshire Blvd., Suite 1500

Los Angeles, CA 90017

Tel.: (213) 891-0700

hchamberlain@buchalter.com

August 2024

Counsel for Amicus Curiae

CIVIL JUSTICE ASSOCIATION

OF CALIFORNIA

QUESTION PRESENTED

Whether, under 9 U.S.C. § 16, a circuit court has

appellate jurisdiction over an interlocutory order

denying a motion for a stay pending arbitration or for

an order compelling arbitration where those requests

for relief are included within a motion to dismiss.

TABLE OF CONTENTS

Page

QUESTION PRESENTED...........................................i

TABLE OF AUTHORITIES ...................................... iii

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

BACKGROUND AND SUMMARY OF

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

ARGUMENT ................................................................ 6

History and purpose of the right to appeal

interlocutory orders under Section 16

of the FAA ............................................................. 6

II. The present conflict among the Circuits

about whether a motion to dismiss may

properly include requests for relief

under the FAA to compel arbitration

and stay judicial proceedings requires

resolution by this court ....................................11

III. The Tenth Circuit’s “bright-line” rule is

antithetical to the right conferred by the

FAA to pursue an interlocutory appeal............ 15

CONCLUSION ..........................................................17

iii

TABLE OF AUTHORITIES

Page(s)

Cases

Abrams v. Chesapeake Energy Corp.,

Nos. 4:16–cv–1343, 1345-1347, 2017

WL 6541511 (M.D. Pa. Dec. 21, 2017) ............. 8, 16

Am. Locomotive Co. v. Gyro Process Co.,

185 F.2d 316, 318 (6th Cir. 1950) ........................... 11

Aluminium Bahrain B.S.C. v.

Dahdaleh,

17 F.Supp.3d 461 (W.D. Pa. 2014)....................... 16

Battaglia v. McKendry,

233 F.3d 720 (3d Cir. 2000).................................... 8

Conrad v. Phone Directories Co.,

585 F.3d 1376 (10th Cir. 2009).........................5, 12

Devon Robotics, LLC v. DeViedma,

798 F.3d 136 (3d Cir. 2015).................................. 11

Dumont v. Sask. Gov't Ins., 258 F.3d

880 (8th Cir. 2001) .............................................. 13

United States ex rel. Dorsa v. Miraca

Life Sciences, Inc.,

33 F.4th 352 (6th Cir. 2022) ................................ 11

Griswold v. Coventry First LLC,

762 F.3d 264 (3d Cir. 2014).................................... 9

Henry Schein Inc. v. Archer and White

Sales Inc.,

586 U.S. 63 (2019) .......................................... 10, 15

Invista S.A.R.L. v. Rhodia, S.A,

625 F.3d 75 (3d Cir. 2010)...................................... 9

Morgan v. Sundance, Inc.,

596 U.S. 411 (2022) .............................. 6, 14, 15, 17

Moses H. Cone Mem’l Hosp. v. Mercury

Constr. Corp.,

460 U.S. 1 (1983) .................................... 6, 8, 12, 16

Shearson/Am. Express Inc. v.

McMahon,

482 U.S. 220 (1987) ................................................ 8

Solo v. United Parcel Serv. Co.,

947 F.3d 968 (6th Cir. 2020) .............. 12, 13, 14, 16

Stedor Enterprises, Ltd. v. Armtex, Inc.,

947 F.2d 727 (4th Cir. 1991) .................................. 7

Thomson-CSF, S.A. v. American

Arbitration Assoc.,

64 F.3d 773 (2d Cir. 1995)...................................... 9

Western Sec. Bank v. Schneider, Ltd.,

816 F.3d 587 (9th Cir. 2016) ................................ 14

Wheeling Hospital, Inc. v. Health Plan of

the Upper Ohio Valley, Inc.,

683 F.3d 577 (4th Cir. 2012) ............................ 7, 16

Statutes and Rules

Federal Arbitration Act

9 U.S.C. § 1, et seq. ...................................... passim

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

9 U.S.C. § 4 ....................................................... 5, 10

9 U.S.C. § 16 ................................................. passim

9 U.S.C. § 16(a)(1) .............................................. 5, 7

9 U.S.C. § 16(a)(2) .................................................. 7

9 U.S.C. § 206 ......................................................... 5

Federal Rules of Civil Procedure

Rule 12(b)(1) ........................................................... 4

Rule 12(b)(2) ........................................................... 4

Rule 12(b)(6) ..................................................... 4, 13

Rule 12(b)(7) ........................................................... 4

Rule 19(a) ............................................................... 4

Rule 19(b) ............................................................... 4

Judicial Improvements and Access to

Justice Act, Pub.L. No. 100-702, Title

X § 1019(a), 102 Stat. 4642, 4671

(1988) ...................................................................... 7

Racketeer Influenced and Corrupt

Organizations (RICO) Act

18 U.S.C. § 1961, et seq................................ 2, 8, 16

Sherman Antitrust Act of 1890

15 U.S.C. § 1, et seq. ............................................. 8

INTEREST OF AMICUS CURIAE

Founded in 1979, the Civil Justice Association

of California (CJAC) is a non-profit organization

representing businesses, professional associations and

financial institutions. The association’s principal

purpose is to educate the public and governing bodies

about ways to make the judicial process and our civil

liability laws more fair, certain, economical and

efficient. Toward this end, CJAC regularly appears as

amicus curiae in numerous cases of interest to its

members, including those that concern the scope and

application of the Federal Arbitration Act (“FAA”); in

this case, invoking the statutory right granted by

Congress to directly appeal from interlocutory orders

denying a party’s request to arbitrate disputes and to

stay litigation until the claims that are subject to

arbitration are fully resolved.

CJAC and its constituent members are

substantially interested in the development of clear

and consistent procedural rules governing the exercise

of parties’ statutory rights to take an interlocutory

appeal from the orders of the federal courts denying a

motion to dismiss claims in litigation that are subject

to contractual arbitration, and the remedy of “staying”

arbitral claims that are asserted in court

proceedings until final resolution of those disputes. 1

________________________

No counsel for a party authored this brief in whole or in part,

and no counsel or party made a monetary contribution

intended to fund the preparation or submission of this brief.

No person other than amicus curiae, its members, or its

counsel made any monetary or other contribution to its

preparation or submission. The parties’ counsel of record

received timely notice of the intent to file the amicus brief.

BACKGROUND AND SUMMARY OF ARGUMENT

December

2021,

plaintiffs

and

“Gramercy”

respondents

(collectively,

respondents) brought a civil complaint in the

District of Wyoming against the five

petitionerdefendants

(collectively

“Piazza

Defendants”

or petitioners), and others asserting a variety of

RICO and common law tort claims. App. 3a.

According to the district court’s recitation: “In

a nutshell, Gramercy alleges that [Ukranian

oligarch, Oleg] Bakhmatyuk and the [Piazza]

Defendants together engaged in a multi-year

pattern

racketeering activity to defraud

Gramercy of the value of notes it [acquired and]

holds from non-parties UkrLandFarming PLC

(“ULF”) and its subsidiary Avangardco IPL

(“AVG,” together with ULF, the “Company”),

which are Ukrainian agricultural companies

that Bakhmatyuk controls. Gramercy brings

three claims for civil liability under the federal

Racketeer Influenced and Corrupt Organizations

(“RICO”) laws, 18 U.S.C. § 1961 et al. The RICO

claims are the basis of the Court’s subject-matter

jurisdiction. Gramercy also brings state law

claims for fraud, tortious interference with

contract (i.e., the ULF and AVG notes), civil

conspiracy and aiding and abetting.” App. 11a

(brackets added, abbreviations in original).

It alleged: “Since October 2015, Gramercy has

held more than 25% of AVG’s notes (hereafter, the

“AVG Notes”). The AVG Notes are governed by the

AVG Trust Deed. ECF No. 1 ¶¶ 46, 47; ECF No. 44-19

(Def. Ex. 5, excerpts), ECF Nos. 44-20 through 44-23

(Def. Ex. 5A, complete copy).” App. 12a.

Gramercy further claimed: “The AVG Trust

Deed gives certain rights to Noteholders above 25%.

Since 2017, Gramercy has held roughly 41% of the

AVG Notes. Meanwhile, between 2013 and 2017,

Gramercy purchased over 28% of ULF’s notes

(hereafter, the “ULF Notes”). ECF No. 1 ¶ 48. The

ULF Notes are governed by the ULF Trust Deed. Id. ¶

49; ECF No. 44-24 (Def. Ex. 6, excerpts), ECF Nos. 4425 and 44-26 (Def. Ex. 6A, complete copy). The ULF

Trust Deed gives certain rights to Noteholders above

25%. Gramercy has held more than 25% of the ULF

Notes since July 21, 2016.” App. 12a.

This was the thrust of Gramercy’s claims:

“Since at least 2016, Ukrainian oligarch Oleg

Bakhmatyuk has perpetrated a complex, multifaceted scheme in order to maintain control over his

agricultural business, (ULF and AVG), so that he

could exploit the Company’s assets as his own

personal war chest and frustrate Gramercy’s right to

recover on the Notes.” App. 12a-13a (italics added.)

The Piazza Defendants allegedly participated in the

scheme, or otherwise aided and abetted Bakhmatyuk’s

activities in that regard. Ibid. App. 13a; see also id.

at App. 14a-16a.

“Gramercy

alleges

that

through

the

[Defendants’] pattern of racketeering activity,

Bakhmatyuk carried out a scheme of misinformation

and deception [including formation of ‘dummy’

Wyoming entities all of which ] culminated in the

siphoning of nearly a billion dollars of assets for the

purposes of preventing a Gramercy-led creditor

takeover and obliterating the value of Gramercy’s

Notes.” App. 18a (italics added).

In response to Gramercy’s action, the Piazza

Defendants moved to dismiss, raising a variety of

alternative arguments. (E.g., Petition at 16-17.) The

motion argued that the trial court should stay or

dismiss the lawsuit because the dispute is subject to

binding arbitration under the FAA. App. 3a–4a. The

motion expressly invoked the FAA, explicitly asking

the district court to “stay” or “stay or dismiss” the

litigation, and stated that it was “a request to refer an

international dispute to arbitration” and that the

court should “refer this dispute to arbitration in

London.” App. 20a–21a, 68a, 149a, 150a, 289a. The

motion’s conclusion said, “For the foregoing reasons,

the Complaint should be stayed or dismissed pending

arbitration, pursuant to Rules 12(b)(1), (2), (6), (7),

19(a), and 19(b).” App. 200a (italics added), 311a. The

motion made other arguments as well, asserting in the

alternative that Gramercy’s complaint should be

dismissed for lack of personal jurisdiction, forum non

conveniens, and failure to state a claim. App. 179a–

200a, 297a–311a.

Gramercy’s opposition to the motion to dismiss

argued that the parties’ dispute was not subject to

arbitration because, among other reasons, neither

Gramercy nor the Piazza Defendants were actually

“signatories” to the Notes and Deeds of Trust acquired

by Gramercy. App. 22a-23a.

The district court took notice of the contents of

the “broad” arbitration provisions governing disputes

“arising out of” the notes and trust deeds. See App.

11a-12a, n. 3; see also 21a-22a. The arbitration clauses

provided for binding arbitration of disputes arising

from those contracts under English law, and that the

question of “arbitrability” of claims was also the

subject of the arbitration – i.e., the question of the

arbitrator’s “jurisdiction” would be determined by the

arbitrator. App. 23a; see also 159a-160a. The district

court ultimately agreed with Gramercy that the

arbitration provisions could not be enforced against

non-signatories. App. 23a-30a, 69a-70a.

Petitioners appealed to the Tenth Circuit under

9 U.S.C. § 16. Section 16 confers appellate jurisdiction

over any interlocutory order that “refuse[s] a stay of

any action under section 3 of [the FAA],” “den[ies] a

petition under section 4 of [the FAA],” or “den[ies] an

application under section 206 of [the FAA].” 9 U.S.C. §

16(a)(1).

The Tenth Circuit summarily dismissed the

appeal. The court held that it lacked appellate

jurisdiction because the form of petitioners’ “motion to

dismiss” raised challenges to issues of jurisdiction and

the legal viability of certain claims alleged by

Gramercy. According to the Tenth Circuit, by raising

certain arguments concerning the merits of

Gramercy’s alleged claims in a motion to dismiss,

petitioners waived the right to appeal under the FAA,

applying the “bright-line” test articulated by that

court in Conrad v. Phone Directories Co., 585 F.3d

1376 (10th Cir. 2009). App. 1a–2a.

The petition cogently digests the conflict that

presently exists among the circuit courts over the

proper application of a party’s section 16 right to

pursue an appeal from interlocutory orders within the

purview of the FAA. The Tenth Circuit’s “bright-line”

test is inconsistent with the statute’s plain meaning

and purpose. This court should grant certiorari to

assure uniformity of decision under the FAA by

settling this important question of federal law.

ARGUMENT

History and purpose of the right to appeal

interlocutory orders under Section 16 of the

FAA

The FAA “is a congressional declaration of a

liberal federal policy favoring arbitration agreements

….” Moses H. Cone Mem’l Hosp. v. Mercury Constr.

Corp., 460 U.S. 1, 24 (1983) (Moses H. Cone). To

further that policy, “questions of arbitrability must be

addressed with a healthy regard for the federal policy

favoring arbitration.” Ibid. This policy reflects the

“FAA’s commitment to overrule the judiciary’s

longstanding refusal to enforce agreements to

arbitrate and to place such agreements upon the same

footing as other contracts.” Morgan v. Sundance, Inc.,

596 U.S. 411, 418 (2022).

The general rule that prevented interim appeals

of orders involving arbitration was substantially

altered in 1988 when Congress amended the FAA by

adopting 9 U.S.C. § 16 to govern appeals from district

court orders in cases involving arbitration.

See Judicial Improvements and Access to Justice Act,

Pub.L. No. 100-702, Title X, § 1019(a), 102 Stat. 4642,

4671 (1988). Stedor Enterprises, Ltd. v. Armtex, Inc.,

947 F.2d 727, 730 (4th Cir. 1991) (Stedor Enterprises)

“The broad purpose of section 16 was to implement

Congress’ ‘deliberate determination that appeal rules

should reflect a strong policy favoring arbitration.’

[Citation omitted.]” Ibid.

By enacting section 16, Congress sought to

effectuate this policy in providing that “an order that

favors litigation over arbitration — whether it refuses

to stay the litigation in deference to arbitration; [or]

refuses to compel arbitration … is immediately

appealable, even if interlocutory in nature. See 9

U.S.C. § 16(a)(1) and (2).” Stedor Enterprises, 947 F.2d

at 730. The right to take an interim appeal facilitates

the strong federal policy of upholding agreements to

arbitrate – “a party who believes that arbitration is

required by an agreement between the parties need

not suffer the expense and inconvenience of litigation

before receiving appellate review of a district court

judgment that arbitration was inappropriate.” Ibid;

Wheeling Hospital, Inc. v. Health Plan of the Upper

Ohio Valley, Inc., 683 F.3d 577, 584 (4th Cir. 2012)

(Wheeling Hospital).

An immediate appeal from the denial of the

right to arbitrate also reflects the policy often stated

by this court that “any doubts concerning the scope of

arbitrable issues should be resolved in favor of

arbitration, whether the problem at hand is the

construction of the contract language itself or an

allegation of waiver, delay, or a like defense to

arbitrability.” Moses H. Cone, 460 U.S. at 24-25.

This duty to enforce arbitration agreements “is

not diminished when a party bound by an agreement

raises a claim founded on statutory rights” or alleges

theories in a lawsuit that do not involve traditional

contract breach. Shearson/Am. Express Inc. v.

McMahon, 482 U.S. 220, 226 (1987). As in this case,

when provisions to arbitrate are broadly phrased –

applying to any disputes “arising under” “arising out

of” or “connected with” the agreement – “they are

normally given broad construction, and are generally

construed to encompass claims going the formation of

the underlying agreements” and the parties’

performance of them. Battaglia v. McKendry, 233 F.3d

720, 727 (3d Cir. 2000); cf. App. 11a-12a, 21a-22a.2

The district court’s order denying arbitration of

Gramercy’s claims and related requests to stay the

action was based principally on its conclusion that the

2 Such broad construction follows this court’s FAA jurisprudence

that agreements to arbitrate a particular dispute “should not be

denied unless it may be said with positive assurance that the

arbitration clause is not susceptible of an interpretation that

covers the asserted dispute.” See Battaglia v. McKendry, 233 F.3d

at 727 (fraudulent misrepresentation; fraud in the inducement);

Shearson/Am. Express Inc. v. McMahon, 482 U.S. at 222

(ordering arbitration of RICO claims); Abrams v. Chesapeake

Energy Corp., Nos. 4:16–cv–1343, 1345-1347, 2017 WL 6541511,

at *6 -7 (M.D. Pa. Dec. 21, 2017) (“Plaintiffs’ standing to bring

Sherman Act, RICO, conversion, civil conspiracy, and unjust

enrichment claims arises only based on their status as

leaseholders” under agreements compelling arbitration of any

disputes – citing Battaglia and Shearson/Am. Express).

arbitration provisions in the Notes and Deeds of Trust

that Gramercy had assumed could not be enforced

against these plaintiffs as “non-signatories.” App.23a30a, 69a-70a. On the contrary, federal law “provides

guidance for determining the circumstances under

which a non-signatory may be bound by such

agreements.” Griswold v. Coventry First LLC, 762

F.3d 264, 271 (3d Cir. 2014) (Griswold). Under

traditional principles of contract and agency law

recognized by the FAA, the party bringing suit may be

deemed “akin to a signatory of the underlying

agreement.” Id. at 271-72.

As argued by petitioners’ motion to dismiss,

“[e]stoppel can bind a non-signatory to an arbitration

clause when that non-signatory has reaped the

benefits of a contract containing an arbitration

clause. See Thomson-CSF, S.A. v. American

Arbitration Assoc., 64 F.3d 773, 778 (2d Cir. 1995).

This prevents a non-signatory [in the position of

Gramercy] from ‘cherry-picking’ the provisions of a

contract that it will benefit from and ignoring other

provisions that don't benefit it or that it would prefer

not to be governed by (such as an arbitration clause).”

Invista S.A.R.L. v. Rhodia, S.A, 625 F.3d 75, 84-85 (3d

Cir. 2010) (bracketed text added).

Here, Gramercy claimed that the Piazza

Defendants allegedly participated in a scheme which,

among other things, resulted in “obliterating the

value” of the Notes plaintiffs had acquired and thereby

frustrated their assumption of other interests. See,

e.g., App. 14a-18a.

Moreover, by the terms of the arbitration

provisions at-issue, questions concerning the

“arbitrability” of those claims were to be decided by the

arbitrator. See App. 23a; 159a-160a.

Henry Schein Inc. v. Archer and White Sales

Inc., 586 U.S. 63 (2019) (Henry Schein), holds that

under the FAA district courts may not decide whether

an arbitration agreement applies to the particular

dispute where the parties “clearly and unmistakably”

delegated that question to an arbitrator, even if the

court believes that the argument for arbitrability is

“wholly groundless.” Id. at 65-67. When a contract so

provides, those are “gateway questions” for the

arbitrator alone to decide:

That conclusion follows not only from the

text of the Act but also from

precedent. We have held that a court

may not “rule on the potential merits of

the underlying” claim that is assigned by

contract to an arbitrator, “even if it

appears to the court to be frivolous.”

Henry Schein, 586 U.S. at 68-69.

At a minimum, petitioners raised colorable

legal arguments in their motion to dismiss that

directly invoked sections 3 and 4 of the FAA. The

denial of those requests for relief by virtue the district

court’s rulings denying this relief were subject to their

right to pursue an interim appeal under section 16.

That right should not have been short-circuited by the

application of the Tenth Circuit’s “bright line” rule.

II.

The present conflict among the Circuits

about whether a motion to dismiss may

properly include requests for relief under

the FAA to compel arbitration and stay

judicial proceedings requires resolution

by this court

The source of the conflict among the circuit

courts about the ostensible “waiver” of the right to

appeal under section 16 arises where defendant in

seeking remedies under the FAA either combines that

request, or precedes it, with a motion that also

addresses the “merits” of the lawsuit – such as, the

validity of the plaintiffs’ claims, personal jurisdiction,

etc. The Piazza Defendants made alternative

arguments along those lines in their moving papers

styled as a “motion to dismiss.”

The three prevailing views, described as

“broad,” “narrow” and “functional,” are not

particularly helpful in their articulation or application

as the instant case illustrates. See Petition at 6-10; see,

e.g., Devon Robotics, LLC v. DeViedma, 798 F.3d 136,

145 (3d Cir. 2015) (discussing the split of authority).

As with other contractual rights, the right to

arbitrate may be waived. United States ex rel. Dorsa v.

Miraca Life Sciences, Inc., 33 F.4th 352, 357 (6th Cir.

2022) (Dorsa) (citing Am. Locomotive Co. v. Gyro

Process Co., 185 F.2d 316, 318 (6th Cir. 1950)).

However, an interpretation that a party has “waived”

its rights accruing under the FAA, including the right

to appeal interlocutory arbitration orders under

section 16, is disfavored and will not be lightly

inferred. Moses H. Cone, 460 U.S. at 24-25.

The “functional” approach, which was

ostensibly adopted by the Tenth Circuit in Conrad,

585 F.3d 1376, purports to chart a middle course.

Conrad devised a two-step test: First, the court looks

at the caption of the motion to see if movant is seeking

relief under the FAA; second, if the form of that

motion does not answer the question, “the court must

look beyond the caption … to determine whether it is

plainly apparent from the four corners of the motion

that the movant seeks only the relief provided for in the

FAA.” Id. at 1385, italics added.

Other courts applying this functional test, have

declined to take the Tenth Circuit’s second element

(requiring a motion seeking exclusive relief under the

FAA) to that extreme.

For example, the Sixth Circuit has held that the

filing of a motion to dismiss challenging the merits of

the plaintiffs’ claims may under some circumstances

be plainly inconsistent with a defendant's reliance on

an arbitration agreement. However, that Circuit

acknowledges that “‘[n]ot every motion to dismiss is

inconsistent with the right to arbitration.’” Solo v.

United Parcel Serv. Co., 947 F.3d 968, 975 (6th Cir.

2020) (Solo). The Solo court also recognized that “the

Eighth Circuit has held that a motion to dismiss

raising

‘jurisdictional

and

quasi-jurisdictional

grounds’ but seeking ‘no action with respect to the

merits of the case' is not inconsistent with later

seeking arbitration.” Ibid. (quoting Dumont v. Sask.

Gov't Ins., 258 F.3d 880, 886-87 (8th Cir. 2001)). The

outcome depends on the context of the relief requested.

“Similarly, where a complaint asserts a mix of

arbitrable and nonarbitrable claims, ‘the portions of

the motion [to dismiss] addressed to nonarbitrable

claims do not constitute a waiver.’” Solo, 947 F.3d at

975. This more flexible view is consistent with the

moving party’s right under the Federal Rules of Civil

Procedure to make arguments and plead defenses in

the alternative – recognizing that the relief requested

by a motion to dismiss may not always amount to an

“all-or-nothing” proposition. See Petition at 9-10, 13.

Cases using this more pragmatic iteration of

the “functional test” ordinarily will find a “waiver” of

the right to arbitrate only in circumstances where the

defendant’s “motion to dismiss … seeks ‘a decision on

the merits’ and ‘an immediate and total victory in the

parties' dispute’ [that] is entirely inconsistent with

later requesting that those same merits questions be

resolved in arbitration.” Solo, 947 F.3d at 975 (italics

and brackets added). Common sense supports that

rationale: “A party may not use a motion to dismiss

‘to see how the case [is] going in federal district court,'

while holding arbitration in reserve for ‘a second

chance in another forum.’” Id. at 975.

As the Sixth Circuit aptly explained: “Only

after we reversed that favorable ruling [on the motion

to dismiss under Rule 12(b)(6)] did UPS change

course, filing an answer invoking arbitration and

seeking to rely on the arbitration agreement to limit

discovery to arbitration-related issues. Had that been

UPS’s course of conduct from the outset of the

litigation, it likely would not have waived its right to

arbitrate.” Solo, 947 F.3d at 975-76; accord, Western

Security Bank v. Schneider, Ltd., 816 F.3d 587, 589-90

(9th Cir. 2016).

This court’s more recent 2022 decision in

Morgan v. Sundance, Inc., 596 U.S. 411, involved a

related issue under the FAA that arose from an appeal

in the context of a defendant’s tactics of filing a motion

to dismiss the plaintiff’s lawsuit. That initial motion

focused only on the merits not the forum choice, and

defendant’s demand for arbitration was not presented

until months later. Morgan, 596 U.S. at 414-15.

Morgan settled another conflict among the

circuits about whether an additional showing of

“prejudice” to the plaintiff was required. Morgan held

that “the usual federal rule of waiver does not include

a prejudice requirement,” and consequently “prejudice

is not a condition of finding that a party, by litigating

too long, waived its right to stay litigation or compel

arbitration under the FAA.” Morgan, 596 U.S. at 419

(italics added).

That “wait and see” scenario is not remotely

presented by this record. The Piazza Defendants’

motion to dismiss promptly and explicitly raised

questions about whether (and to what extent) the

claims alleged by Gramercy were subject to the

exclusive jurisdiction of an arbitration tribunal in

London with the arbitrator tasked to resolve questions

concerning the scope of that jurisdiction.

III.

The Tenth Circuit’s “bright-line” rule is

antithetical to the right conferred by the

FAA to pursue an interlocutory appeal

In resolving the conflict over “prejudice,”

Morgan declined to address the remaining

disagreements among the Circuits involving “waiver,

forfeiture, estoppel, laches, or procedural timeliness”

that might result in loss of a contractual right to

arbitrate. Morgan, 596 U.S. at 416.

This leaves undecided the proper test for

determining whether a defendant who has invoked

remedies that are explicitly authorized under sections

3 and 4 of the FAA – in the alternative to other

requests for relief in a motion to dismiss that are not

inherently inconsistent with the right to arbitrate –

has ineluctably “waived” the statutory the right to

appeal granted by Congress under section 16.

The Tenth Circuit’s “bright-line” rule is rigid

and unworkable. As applied in this case, that rule is

contrary to the plain language of the FAA, and in

many cases will impermissibly “short-circuit”

potentially viable arguments supporting the prompt

arbitration of disputes in a manner that frustrates the

meaning and purposes underlying section 16. See and

compare Henry Schein, 586 U.S. at 68-69.

Conrad’s test ignores the context of numerous

cases in which a complaint may allege a “mix of

arbitrable and nonarbitrable claims,” “jurisdictional

and quasi-jurisdictional grounds” and dispenses with

the right of parties under the Federal Rules to timely

make arguments in the alternative regarding how the

courts should appropriately address those claims and

jurisdictional questions. Solo, 947 F.3d at 975.3

This is contrary to the policy of the FAA that

strongly disfavors any claim or “allegation of waiver,

delay, or a like defense to arbitrability.” See Moses H.

Cone, 460 U.S. at 24-25. Applying this strong policy,

even after consideration of Conrad’s rigid two-step

analysis, the majority of circuits that have squarely

addressed the so-called “functional test” on similar

facts conclude that such “a hypertechnical reading of

[the defendant’s] pleadings would be inconsistent with

the liberal federal policy favoring arbitration

agreements. [The defendant] made it clear during

proceedings in the district court that it was seeking

enforcement of the arbitration clause of the

Agreement.” Wheeling Hosp., 683 F.3d at 584-85. This

is exactly what the Piazza Defendants did here.

The notion that the Tenth Circuit was justified

in summarily dismissing this appeal because it should

not be required to “parse” the district court motions

and memoranda to ascertain if FAA remedies were

properly sought is unpersuasive. Cf. App. 7a. The

district court articulated the basis for its orders when

denying relief under the FAA in a manner that can be

readily determined without undue administrative

See also Aluminium Bahrain B.S.C. v. Dahdaleh, 17

F.Supp.3d 461, 469-70 (W.D. Pa. 2014) (RICO claims by a

“non-signatory” who had assumed the contract were ordered

to arbitration on defendant’s motion to dismiss or stay);

Abrams, 2017 WL 6541511, at *6 -7 (some claims were

referred to the arbitrator’s jurisdiction, other claims deferred

for later judicial resolution).

burden. Moreover, this is a right to appeal mandated

by Congress, even if some “parsing” were necessary.

The question raised by the petition is important

to the proper application of section 16. Like Morgan,

this issue requires resolution of a conflict among the

circuits that can only be decided by this court.

CONCLUSION

Accordingly, the petition for a writ of certiorari

should be granted.

Respectfully submitted,