The Supreme Court, in a 5–4 ruling, has resolved a circuit split on the issue of litigation stays pending appeal of denials of motions to compel arbitration.  In the underlying putative class action, Bielski et al v. Coinbase, Inc., 3:21-cv-07478 (N.D. Cal.), Coinbase moved to compel arbitration of the plaintiffs’ claims, but the motion was denied by the district court.  The Ninth Circuit—in a split from several other Circuits—declined to stay the district court proceedings while the appeal was pending.  The Supreme Court now has ruled that a district court must stay proceedings while an interlocutory appeal on the question of arbitrability is ongoing.  The decision means that defendants should be able to minimize ongoing litigation costs while an appeal of an adverse arbitration decision is pending.

In resolving the split in Coinbase’s favor, the Supreme Court held that “after Coinbase appealed from the denial of its motion to compel arbitration, the District Court was required to stay its proceedings.”  Coinbase, Inc. v. Bielski, No. 22–105, Slip Op. at 10 (U.S. 2023).  The Court observed that its holding followed that of most other Circuits that had faced this question, as well as treatises such as Moore’s and Wright & Miller.  Applying the Griggs principle, the Court explained “[a]n appeal, including an interlocutory appeal, ‘divests the district court of its control over those aspects of the case involved in the appeal.’”  Coinbase at 3 (citing Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58 (1982)).  “Because the question on appeal is whether the case belongs in arbitration or instead in the district court, the entire case is essentially ‘involved in the appeal.’”  Id.  Since discovery was part of the district court proceedings that were divested, it would also necessarily be stayed by the appeal.  The majority held that the need for a stay is “common sense,” as absent the stay, the benefits of arbitration, such as efficiency and lessened cost, would be “irretrievably lost.”  Id. at 5-6. 

The Court rejected Bielski’s arguments against application of the Griggs rule.  Among other things, the Court saw no evidence that Circuits applying Griggs were subject to frequent frivolous appeals, and it pointed out that courts have other tools for dealing with that problem if it arises.  The Court also found that ordinary discretionary stay factors are insufficient to protect parties’ rights in this context, “because courts applying that test often do not consider litigation-related burdens . . . to constitute irreparable harm,” whereas that harm is specifically at issue in the context of arbitration rights.  Id. at 9-10.  Finally, the Court rejected Bielski’s reliance on precedent holding that “questions of arbitrability are severable from the merits of the underlying disputes,” as “the sole issue here is whether the district court’s authority to consider a case is involved in the appeal when an appellate court considers the threshold question of arbitrability.”  Id. at 10 (citations omitted).

The dissenting opinion, written by Justice Jackson and joined by Justices Sotomayor and Kagan, and Thomas in part, disagreed that the stay should be mandatory.  The dissent argued that for most interlocutory appeals, the district court retains the remainder of the case, and has the discretion to stay those parts, and that the “discretionary decisionmaking promotes procedural fairness because it allows for a balancing of all relevant interests.”  Dissent at 1.  Justice Jackson wrote that the “mandatory-general-stay rule for interlocutory arbitrability appeals comes out of nowhere,” and will “perpetually favor[] one class of litigants—defendants seeking arbitration.”  The dissent also argued that the original federal interlocutory-appeal statute “cemented a background discretionary-stay rule that governed even where Congress was silent,” id. at 6, and that the policy considerations underlying Griggs don’t support a mandatory stay rule in this context.  Finally, the dissent warned that the majority’s logic could potentially apply to a “wide array of appeals,” and that “[t]aken that broadly, the mandatory-general-stay rule the Court adopts today would upend federal litigation as we know it” because “defendants would presumably pursue [this] tactic at every opportunity” to stop a plaintiff’s case.  Id. at 14.

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Photo of Sam Greeley Sam Greeley

Samuel Greeley is an associate in the firm’s Washington, D.C. office representing clients in complex civil litigation and government investigations. Sam’s practice focuses on a broad range of high-stakes issues facing companies in the tech sector, including class actions, antitrust investigations and litigation…

Samuel Greeley is an associate in the firm’s Washington, D.C. office representing clients in complex civil litigation and government investigations. Sam’s practice focuses on a broad range of high-stakes issues facing companies in the tech sector, including class actions, antitrust investigations and litigation, and federal agency enforcement matters. This includes advising clients on issues relating to cryptocurrency and digital assets, and how they can stay ahead of the quickly evolving enforcement and litigation landscape. He has also defended clients from class actions and white collar investigations in other industries, including life sciences and healthcare.

Photo of Andrew Soukup Andrew Soukup

Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings, many of which…

Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings, many of which were defeated through dispositive pre-trial motions.
Andrew is co-chair of the firm’s Class Action Litigation practice group.

Andrew has helped his clients achieve successful outcomes at all stages of litigation, including through trial and appeal. He has helped his clients prevail in litigation against putative class representatives, government agencies, and commercial entities. Representative victories include:

  • Delivered wins in multiple nationwide class actions on behalf of large financial companies related to fees, disclosures, and other banking practices, including the successful defense of numerous lenders accused of violating the Paycheck Protection Program’s implementing laws, which contributed to Covington’s recent recognition as a “Class Action Group Of The Year.”
  • Successfully defending several of the nation’s leading financial institutions in a wide variety of litigation and arbitration proceedings involving alleged violations of RICO, FCRA, TILA, TCPA, FCBA, ECOA, EFTA, FACTA, and state consumer protection and unfair and deceptive acts or practices statutes, as well as claims involving breach of contract, fraud, unjust enrichment, and other torts.
  • Successfully defended several of the nation’s leading companies and brands from claims that they deceptively marketed their products, including claims brought under state consumer protection and unfair deceptive acts or practices statutes.
  • Obtained favorable outcomes for numerous clients in commercial disputes raising contract, fraud, and other business tort claims.

Because many of Andrew’s clients are subject to extensive federal regulation and oversight, Andrew has significant experience successfully invoking federal preemption to defeat litigation.

Andrew also advises clients on their arbitration agreements. He has successfully helped numerous clients avoid multi-district class-action litigation by successfully enforcing the institutions’ arbitration agreements.

Clients praise Andrew for his personal attention to their matters, his responsiveness, and his creative strategies. Based on his “big wins in his class action practice,” Law360 named Mr. Soukup a “Class Action Rising Star.

Prior to practicing law, Andrew worked as a journalist.

Photo of Sonya Winner Sonya Winner

A litigator with three decades of experience, Sonya Winner handles high-stakes civil cases for clients in a wide range of industries, including banking, pharmaceuticals and professional sports. She has handled numerous antitrust and consumer disputes, many of them class actions, in state and…

A litigator with three decades of experience, Sonya Winner handles high-stakes civil cases for clients in a wide range of industries, including banking, pharmaceuticals and professional sports. She has handled numerous antitrust and consumer disputes, many of them class actions, in state and federal courts across the country.

Sonya’s cases typically involve difficult technical issues and/or complex legal and regulatory schemes. She is regularly able to resolve cases before the trial phase, often through dispositive motions. But when neither summary judgment nor a favorable settlement is an option, she has the confidence of her clients to take the case all the way through trial and on appeal. Her recent successes have included a cutting-edge decision rejecting a “true lender” challenge to National Bank Act preemption in a class action involving interest rates on student loans, as well as the outright dismissal of a putative antitrust claim against the National Football League and its member clubs asserting an unlawful conspiracy to fix cheerleader compensation.

Sonya has been recognized as a leading trial lawyer by publications like Chambers and the Daily Journal. She is chair of the firm’s Class Action Litigation Practice Group.