Jaludi v. Citigroup and Appeals from Orders Compelling Arbitration
In Jaludi v. Citigroup, the Third Circuit heard a plaintiff’s appeal from an order compelling arbitration of all of the plaintiff’s claims. The case is another illustration of a district court dismissing—rather than staying—an action after ordering arbitration to proceed. And it’s one that circumvents the normal limits on arbitration appeals.
Jurisdiction in Jaludi
The plaintiff in Jaludi had sued Citigroup, asserting claims under RICO and Sarbanes-Oxley. The district court eventually granted ordered arbitration for both claims, holding that provisions in two employee handbooks required arbitration. The plaintiff then appealed. On appeal, the Third Circuit held that the second of the two handbooks superseded the first. And under the second handbook Sarbanes-Oxley claims were not arbitrable.
As for jurisdiction, the Third Circuit said only that it had jurisdiction under 28 U.S.C. § 1291. This piqued my interest. The Federal Arbitration Act’s pro-arbitration approach normally allows immediate appeals from orders denying arbitration but bars appeals from orders granting it.
So I pulled the briefs. It turns out the district court dismissed the case after ordering arbitration to proceed.
I’ve questioned this practice of dismissing cases—rather than staying them—when ordering arbitration, as it might improperly circumvent the Federal Arbitration Act. District courts that order arbitration to proceed have a procedural decision to make: should they stay proceedings in that court or dismiss them? The practical result of either decision is largely the same—litigation in the district court stops while arbitration occurs. But there’s one important difference: appellate jurisdiction. The Federal Arbitration Act bars appeals from orders staying district court proceedings. But the Supreme Court has held that an order dismissing an action in favor of arbitration is final and appealable.
It seems that stays should be required, and dismissals not allowed. See this post for more thoughts on this matter.
Jaludi v. Citigroup, 2019 WL 3558978 (3d Cir. 2019), available at the Third Circuit and Westlaw.
Final Decisions PLLC is an appellate boutique and consultancy that focuses on federal appellate jurisdiction. We partner with lawyers facing appellate-jurisdiction issues, working as consultants or co-counsel to achieve positive outcomes on appeal. Contact us to learn how we can work together.
Learn More ContactRelated Posts
In Ashley v. Clay County, the Fifth Circuit held that a municipal defendant could appeal a district court’s refusal to resolve an immunity defense despite the district court’s ordering arbitration.
Continue reading....
In Hines v. Stamos (no PDF currently available), the Fifth Circuit spoke at length about its jurisdiction to review a personal-jurisdiction defense as part of an arbitration appeal. But the discussion was entirely unnecessary. The district court had never ruled on the personal-jurisdiction defense, meaning that there was no order to review. And the panel […]
Continue reading....
In Smith v. Spizzirri, the Supreme Court held that district courts must stay—not dismiss—an action if the district court orders arbitration and a party requests a stay. The decision resolves a long-standing split over the ability to dismiss actions after ordering arbitration. The decision also has implications for appellate jurisdiction. As I’ve explained on this […]
Continue reading....
Courts have held that when an “order” is appealable—say, via a certified appeal under 28 U.S.C. § 1292(b) or an exception to 28 U.S.C. § 1447(d)’s bar on remand appeals—the entirety of the district court’s order is within the scope of appeal. So when a district court certifies an order for an immediate appeal under § 1292(b), the […]
Continue reading....
In Coinbase, Inc., v. Bielski, the Supreme Court held that district courts must stay proceedings on the merits once a party appeals from the denial of arbitration. The Court determined that 9 U.S.C. § 16—which authorizes these appeals—was enacted against Griggs v. Provident Consumer Discount Co.’s background principal that a district court loses control over all […]
Continue reading....Recent Posts
In Diaz v. FCA US LLC, the Third Circuit split over whether a district court had resolved distinct claims for purposes of Federal Rule of Civil Procedure 54(b). The majority concluded that the district court had resolved only a distinct theory of recovery, not a distinct claim. Dissenting, Judge Phipps argued that claims are defined […]
Continue reading....
In Grippa v. Rubin, the Eleventh Circuit addressed the immediate appealability of Florida’s absolute and qualified litigation privileges. The court determined that the absolute privilege was immediately appealable via the collateral-order doctrine. But the qualified litigation privilege was not.
Continue reading....
Last month featured a Sixth Circuit debate over jurisdiction to review Brady issues in appeals from the denial of qualified immunity. There was also an especially odd Second Circuit decision in which the court exercised pendent appellate jurisdiction over a normally non-appealable issue even though the court lacked jurisdiction over any other issue. And there […]
Continue reading....
In two appeals—Clark v. Louisville-Jefferson County Metro Government and Salter v. City of Detroit, the Sixth Circuit spoke at length about its jurisdiction to review certain Brady issues as part of qualified-immunity appeals. The cases produced a total of six opinions, several of which dove into this jurisdictional issue.
Continue reading....
In Rossy v. City of Buffalo, the Second Circuit appeared to both dismiss a qualified-immunity appeal for a lack of jurisdiction and exercise pendent appellate jurisdiction over a plaintiff’s cross-appeal. This is odd. Pendent appellate jurisdiction allows normally non-appealable issues to tag along with appealable ones. But if the denial of qualified immunity was not […]
Continue reading....