The U.S. Supreme Court delved into a pivotal debate on Monday, concerning whether to stay or dismiss lawsuits that are destined for arbitration, with the justices displaying skepticism towards the notion that dismissal alleviates court burdens more than staying cases.
The Core of the Arbitration Debate
Central to the discussion is a challenge by delivery drivers against a 2023 Ninth Circuit ruling that dismissed their misclassification lawsuit against IntelliQuick Delivery Inc. and its owner, after an arbitration was granted. The crux of the oral arguments revolved around Section 3 of the Federal Arbitration Act (FAA) and whether it advises courts to dismiss or stay arbitration cases.
Justice Sonia Sotomayor expressed her reservations about equating the concept of a “stay” with “dismissal,” referencing both the statute’s language and legal definitions that differentiate the two actions. She highlighted that the language of the FAA explicitly instructs courts to stay proceedings until arbitration is complete, rather than dismissing them outright.
Staying Arbitration Cases: Opposing Views on Staying Arbitration Cases
E. Joshua Rosenkranz, representing IntelliQuick, argued that the FAA does not require courts to maintain jurisdiction throughout the arbitration process, suggesting that staying arbitration cases imposes greater demands on judicial resources. He posited that such cases necessitate ongoing status updates, which could burden the courts.
