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Forrest v. Spizzirri (9th Cir. 22-16051 3/16/23) Arbitration

By March 17, 2023Arbitration

The panel affirmed the district court’s order granting defendants’ motion to compel arbitration of all claims in an employment law action and dismissing the action without prejudice, rather than staying the action pending arbitration.

The panel held that, although the plain text of the Federal Arbitration Act appears to mandate a stay pending arbitration upon application of a party, binding Ninth Circuit precedent establishes that district courts may dismiss when, as here, all claims are subject to arbitration. The panel concluded that this precedent was not abrogated by Badgerow v. Walters, 142 S. Ct. 1310 (2022) (relying on plain statutory text to limit the range of materials federal courts can consult when assessing jurisdiction over an application to confirm or vacate an arbitration award). The [panel further] held that the district court did not abuse its discretion in dismissing rather than staying the action because the district court did not misstate the law, misconstrue the facts, or otherwise act arbitrarily.

Concurring, Judge Graber, joined by Judge Desai, wrote that she concurred fully in the majority opinion. Judge Graber wrote that she encouraged the Supreme Court to take up the question, on which the courts of appeals are divided, of whether a stay is required when a district court refers a claim to arbitration. Judge Graber also urged the Ninth Circuit to take this case en banc in order to follow statutory language requiring a stay.