Appellate Decisions

Jaludi v. Citigroup and Appeals from Orders Compelling Arbitration

A district court ordered arbitration and dismissed—rather than stayed—the underlying action. This allowed an appeal from an order compelling arbitration.

August 11, 2019

By Bryan Lammon

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 On appeal, the Third Circuit held that the second of the two handbooks superseded the first.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.

recent posts

Another Rejection of Pure Bivens Appeals
A divided Tenth Circuit held that the Bivens question is not independently appealable via the collateral-order doctrine; it must be part of a qualified-immunity appeal.
The Month in Federal Appellate Jurisdiction: April 2024
Notices of appeal, manufactured finality, unresolved claims, qualified-immunity appeals, and much, much more.
Appeals After Unresolved Claims & Theories
Has a district court issued a final decision if it overlooked one of the parties’ claims? Courts seem to disagree. But the best answer might be that these oversights implicate the adequacy of the judgment, not finality.
Manufactured Finality & Dispositive Interlocutory Orders
The Second Circuit split over whether it had jurisdiction after a stipulated judgment, particularly whether a preliminary-injunction decision effectively resolved an action.
Tenth Circuit Rejects Anti-SLAPP Appeals
The Tenth Circuit held that anti-SLAPP appeals are too factual in nature to be immediately appealable via the collateral-order doctrine.

related posts

Appealable Orders, Not Appealable Documents
Just because the entirety of an “order” is appealable does not mean that other orders in the same document are appealable, too.
Coinbase Holds that § 16 Appeals Require a Stay
The Supreme Court held that the filing of a § 16 appeal from the denial of arbitration requires staying district court proceedings.
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.
Manufactured Finality in Arbitration Appeals
The Ninth Circuit held that plaintiffs can no longer voluntarily dismiss their claims and manufacture finality after a district court orders arbitration.
Appeals After Ordering (Class-Wide) and Rejecting (Individual) Arbitration
The Ninth Circuit held that an order granting class-wide arbitration—and rejecting a request for individual arbitration—was not appealable.