Staying Put: Halting Litigation During An Appeal From An Order Denying Arbitration

Seeking to take advantage of the prevailing wisdom that arbitration “is usually cheaper and faster than litigation,” Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 280 (1995), litigants who believe that they have an enforceable arbitration agreement often move early in the litigation to compel arbitration under section 2 of the Federal Arbitration Act (FAA), 9 U.S.C. § 2. But when a motion to compel arbitration is denied and litigation goes forward in the district court, the cost- and time-saving benefits of arbitration are irretrievably lost and cannot be salvaged by a reversal on appeal after the parties have participated in timeconsuming and expensive motion practice, discovery, and trial. Recognizing this issue, Congress amended the FAA in 1988 to allow for interlocutory appellate review of a district court’s order denying a motion to compel arbitration. 9 U.S.C. § 16(a)(1)(c).

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