Plain-English summary
Unanimously: courts must stay lawsuits when a dispute is arbitrable under the FAA
In Wendy Smith v. Spizzirri (No. 22-1218), the Court held unanimously that Section 3 of the Federal Arbitration Act (FAA) requires a district court to stay a lawsuit when it finds the dispute is subject to arbitration and a party requests a stay. The Ninth Circuit judgment was reversed and the case remanded.
Why this matters
This decision resolves a split among federal appeals courts and clarifies that federal trial courts must pause litigation in favor of arbitration whenever they find a dispute arbitrable and a party requests a stay. That strengthens the enforceability of arbitration clauses and narrows trial courts’ discretion to proceed to litigation in the face of an otherwise valid arbitration agreement.
Who may feel it
- Businesses that use arbitration clauses in contracts
- Plaintiffs and defendants in federal civil suits where arbitration is asserted
- Lower federal and state trial courts interpreting arbitration law
- Arbitration providers and attorneys who litigate arbitration questions
Key questions
- Does Section 3 of the Federal Arbitration Act require a court to stay a lawsuit when the court finds the dispute is subject to arbitration and a party requests a stay?