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1 1 (March 4, 2024)

handle is hein.crs/goveomy0001 and id is 1 raw text is: S Congressional ______ R a esearch Service Smith v. Spizzirri: Supreme Court to Consider Whether Federal Courts May Dismiss a Lawsuit Subject to Arbitration March 4, 2024 In Smith v. Spizzirri, the Supreme Court will consider whether Section 3 of the Federal Arbitration Act (FAA) permits federal trial courts to dismiss a lawsuit, rather than stay the case, when all of the claims are subject to arbitration. Federal courts of appeals have split on this issue, and the Supreme Court's eventual decision could affect the availability of significant procedural rights in disputes involving arbitration agreements. This Legal Sidebar provides background on the FAA and Section 3's stay provision, examines the lower court's ruling in Spizzirri and the circuit split, and discusses considerations for Congress. Background In general, the FAA requires courts to treat written arbitration agreements as valid, irrevocable, and enforceable, and requires courts to rigorously enforce the agreements according to their terms. The Supreme Court has characterized the FAA as establishing a national policy favoring arbitration and reflecting Congress's intent to move the parties to an arbitrable dispute out of court and into arbitration as quickly and easily as possible. Under Section 3 of the FAA, a party to an arbitration agreement faced with a federal lawsuit may request a stay of the court case pending arbitration. A stay pauses the judicial proceeding, but the court retains jurisdiction over the case. Relatedly, under Section 4, a party may seek to compel an adversary to resolve the dispute in binding arbitration pursuant to the agreement. Staying a court case pending arbitration rather than dismissing it has a number of potential procedural consequences. Perhaps most significantly, when a court stays a case and orders the parties to arbitrate the dispute, the party opposing arbitration does not have the right to an immediate appeal of that interlocutory (i.e., non-final) order compelling arbitration. Instead, a party seeking to challenge the order compelling arbitration generally has to wait until the arbitration concludes, unless the district court and appellate court both agree to permit a discretionary appeal under 28 U.S.C. § 1292(b). In contrast, when a court dismisses a lawsuit rather than staying it, the court's dismissal order is a final decision subject to immediate appeal. Congressional Research Service https://crsreports.congress.gov LSB11122 CRS Legal Sidebar Prepared for Members and Committees of Congress

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