No. 22-1218

Smith v. Spizzirri

Petitioner Wendy Smith, et al. · Respondent Keith Spizzirri, et al.

Reporter: 601 U.S. ___ (2024)
From: United States Court of Appeals for the Ninth Circuit
How it got here: writ of <i>certiorari</i>

Does Section 3 of the Federal Arbitration Act give district courts discretion to dismiss a lawsuit when all claims are subject to arbitration?

Question before the Court

What happened

Plaintiffs Smith and others were current and former delivery drivers for Intelliserve. They sued Intelliserve in Arizona state court alleging that “Intelliserve violated federal and state employment laws by misclassifying them as independent contractors, failing to pay them required minimum and overtime wages, and failing to provide paid sick leave.” Intelliserve removed the case to federal court, then moved to compel arbitration and to dismiss the case. While both parties agreed that, under the FAA, all claims were subject to mandatory arbitration, they disagreed on how the district court was supposed to handle the lawsuit. Intelliserve argued that Section 3 of the FAA permitted the district court to dismiss the action, while the plaintiffs argued that the FAA required the district court to stay the action pending arbitration. The district court dismissed the action without prejudice, and the U.S. Court of Appeals for the Ninth Circuit affirmed.

9–0 for Smith

with the majority concurring in dissent recused filed an opinion

How the vote aligned with ideology

Unanimous.

Liberal Conservative

voted with the majority dissented

All nine justices agreed on the outcome. Concurrences may differ on reasoning, but the Court spoke with one voice on the judgment.

The opinions 1

Justice Sotomayor, for the Court

Sonia Sotomayor

Joined by Roberts, Thomas, Alito, Kagan, Gorsuch, Kavanaugh, Barrett, and Jackson.

The holding

When a district court finds that a lawsuit involves an arbitrable dispute and a party has requested a stay of the court proceeding pending arbitration, § 3 of the Federal Arbitration Act compels the court to issue a stay, and the court lacks discretion to dismiss the suit. Justice Sonia Sotomayor authored the unanimous opinion of the Court. Section 3 of the Federal Arbitration Act (FAA) states that a court “shall” stay proceedings when an issue is subject to arbitration. The word “shall” creates a mandatory obligation that leaves no room for judicial discretion. The term “stay” means a temporary suspension of legal proceedings, not a conclusive termination. The statutory text surrounding “stay” in Section 3 indicates that parties can return to federal court if arbitration fails, which would not be possible if the case were dismissed. Even if district courts have inherent authority to dismiss proceedings subject to arbitration, Section 3 of the FAA overrides that discretion and requires a stay. The FAA’s structure and purpose confirm that a stay is required. The FAA allows immediate appeals of orders denying arbitration but not orders compelling arbitration, reflecting Congress’s intent to move parties to arbitration quickly. Dismissing a case would trigger an appeal that Congress sought to forbid. Finally, staying a suit aligns with the supervisory role the FAA envisions for courts, allowing them to assist in the arbitration process as needed. Keeping the case on the docket avoids the costs and complications of filing a new suit to invoke the FAA's procedural protections. Thus, Section 3 compels the district court to issue a stay and does not give the court discretion to dismiss the suit.

Argued by

For the petitioner

Daniel L. Geyser for the Petitioners

For the respondent

E. Joshua Rosenkranz for the Respondents

Case path