Oh, Won't You Stay with Me?: Determining Whether § 3 of the FAA Requires a Stay in Light of Katz v. Cellco Partnership

Abstract

The Federal Arbitration Act (FAA) provides the legal framework to render international and interstate arbitration agreements judicially enforceable in the United States. In furtherance of that goal, it provides that if a party initiates litigation rather than arbitration of an arbitrable dispute, either party may request that the court stay the litigation pending arbitration. There is currently a split among the circuit courts in this country as to whether § 3 of the FAA requires a court under these circumstances to stay the suit or whether it has the discretion to dismiss the suit altogether.In Katz v. Cellco Partnership, the United States Court of Appeals for the Second Circuit, a leading U.S. court in creating and shaping domestic and international arbitration law, recently sided with the majority of sister circuits in holding that § 3 requires a court to stay the litigation pending arbitration. This Note argues that the proper interpretation of FAA § 3 does indeed require a stay and proposes that the Supreme Court adopt the Second Circuit’s reasoning. Further, it argues that the mandatory-stay approach is consistent with the plain meaning of the statute, as well as important policy objectives: (1) providing the pro-arbitration framework Congress intended when passing the FAA, as the Supreme Court has repeatedly underscored; (2) foreclosing interlocutory appeals of dismissals that stall arbitrations; (3) rejecting docket management as a grounds for dismissal; and (4) avoiding the general uncertainty and unpredictability of dismissals.