Appellate Decisions

Appealing Motions to Dismiss & Compel Arbitration

The First Circuit explained that it can review the denial of a motion to dismiss when the only ground for dismissal was to compel arbitration.

March 4, 2023

By Bryan Lammon

In Fraga v. Premium Retail Services, Inc., the First Circuit reviewed what was nominally the denial of a motion to dismiss, as that motion effectively sought to compel arbitration.

Fraga arose from a purported class action seeking unpaid wages. The employer responded to the complaint with a motion titled, “Motion to Compel Arbitration and Dismiss Complaint,” which asked the district court to “dismiss Plaintiff’s claims and order her to submit her claims to arbitration on an individual basis.”

The district court treated this filing as two separate motions: one to dismiss, and one to compel arbitration. The court then denied the motion to dismiss because the plaintiff had sufficiently alleged facts satisfying an exemption from the Federal Arbitration Act. In the same order, the district court reserved ruling on arbitration until it could resolve fact issues concerning that exemption. The employer then appealed.

The First Circuit held that it had jurisdiction. 9 U.S.C. § 16(a) permits immediate appeals from many orders refusing to order arbitration. And the district court’s order—though purporting to deny only a motion to dismiss—was effectively a refusal to order arbitration. The only ground for dismissal was the arbitration agreement. The First Circuit accordingly treated the motion to dismiss as one seeking to compel arbitration. So the district court’s denial of that motion was appealable under § 16.

One additional twist to note: had the district court ordered arbitration and dismissed—rather than stayed—the action, the plaintiff would have been able to appeal under the Supreme Court’s decision in Green Tree Financial Corp.-Alabama v. Randolph.

Fraga v. Premium Retail Services, Inc., 2023 WL 2342039 (1st Cir. Mar. 3, 2023), available at the First Circuit and Westlaw

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