The Tenth Circuit recently affirmed a federal district court decision staying a supplier’s action to compel arbitration under the Federal Arbitration Act (FAA) while related litigation proceeded in Washington state court. Nu Skin Enterprises, Inc. v. Raab, 2025 WL 3184889 (10th Cir. Nov. 14, 2025).
Ernest Raab and other distributors for Nu Skin, a Utah-based direct-sales company that sells beauty and nutrition products, sued Nu Skin in Washington state court alleging various statutory and common law claims. The distributors also alleged that the arbitration provisions in their distribution agreements were void and unenforceable. Pursuant to the FAA, which states that courts “shall” stay proceedings until the conclusion of arbitration, Nu Skin initiated a separate action in Utah federal district court to compel arbitration in Utah pursuant to the distributor agreements and enjoin continued prosecution of the state court action. The federal district court stayed the petition to compel arbitration while the Washington state courts addressed whether the contracts’ arbitration clauses were enforceable.
After several years of procedural twists, the Tenth Circuit affirmed the stay on appeal. First, the panel clarified that a stay order on an action to compel arbitration can be a final, appealable order because a stay is effectively final as to the federal proceeding. Second, the panel held that district courts may rely on federal abstention doctrines, including the doctrine allowing abstention in cases addressing difficult and unsettled state-law questions of substantial public importance, to stay FAA proceedings in favor of related state court proceedings. The court also rejected Nu Skin’s argument that the FAA preempts a state court’s determination of the unconscionability of a specific arbitration clause.
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