Forrest v. Spizzirri

Section three of the Federal Arbitration Act (FAA) states that “upon determination by a court that an issue or issues are referable to arbitration, the court, on application of a party, ‘shall’ stay the trial of the action pending arbitration (provided the applicant is not in default). 9 U.S.C. § 3.”

A district court order granted Defendant's motion to compel arbitration of all claims in an employment law action and dismissed the action without prejudice, rather than staying pending arbitration. On appeal, Plaintiff raised four assignments of error: (1) the court permitted dismissal in a case where no party requested a stay; (2) the plain text of Section three of the Federal Arbitration Act (FAA) should dictate the outcome despite Ninth Circuit precedent; (3) the recent Supreme Court decision in Badgerow v. Walters, 142 S. Ct. 1310 (2022) abrogates Ninth Circuit precedent which permits a different result; and (4) the court abused its discretion in dismissing the case. Section three of the FAA states that “upon determination by a court that an issue or issues are referable to arbitration, the court, on application of a party, ‘shall’ stay the trial of the action pending arbitration (provided the applicant is not in default). 9 U.S.C. § 3.” The Court held that Ninth Circuit precedent established that district courts may dismiss when all claims are subject to arbitration and that the district court did not abuse its discretion in dismissing action because the court did not misstate the law, misconstrue facts, or act arbitrarily. AFFIRMED.