The Second Circuit held that the Federal Arbitration Act (“FAA”) requires a stay of proceedings when all claims are referred to arbitration and a stay is requested, as opposed to dismissal of the case. Katz v. Cellco P’ship, 794 F.3d 341 (2d Cir. 2015) (No. 14-138). The court recognized that to more efficiently manage their dockets, some district courts will dismiss an action after having compelled arbitration. But dismissing the matter creates an immediately appealable final order, which provokes additional litigation. To avoid this result, the court concluded that judicial proceedings should be stayed when all claims are referred to arbitration and a stay is requested. The Second Circuit noted that other circuits are divided on this issue, but concluded that a stay better comports with the FAA’s statutory scheme and pro-arbitration policy.
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Courts Should Stay Rather Than Dismiss A Case Pending Arbitration
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