Last week the US Supreme Court heard arguments regarding whether the interlocutory appeal of a denial of a motion to compel arbitration should also automatically stay proceedings in the trial court such as discovery. The case, Coinbase Inc. v. Bielski, may resolve a long-standing circuit split. Six US Circuit Courts of Appeals have held that the interlocutory appeal automatically stays proceedings at the trial court. Three have held that there is not an automatic stay but that trial courts could exercise their discretion to grant stays where appropriate.

The arguments at the Court also articulated some of the very real stakes dependent on resolution of this question. Even with the benefit of an interlocutory appeal, if trial court proceedings are not stayed, parties can be compelled to respond to intrusive and burdensome discovery, engage in costly motion practice, and see their dispute broadcast in public filings while they are waiting the decision of their interlocutory appeal. With automatic stays, however, plaintiffs incur an additional, substantial delay whenever a defendant can raise a non-frivolous arbitration argument, placing them further from their just remedy.

The Court appeared split on the issue. Some emphasized the text of the Federal Arbitration Act, from which the right to an interlocutory appeal arises, and the absence of language authorizing an automatic stay in conjunction with that interlocutory appeal. Other members of the Court emphasized the longstanding importance of a judicial doctrine that only one court should exercise jurisdiction over a matter at a time.

We will continue to monitor this case.

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