New arbitration case at the US Supreme Court

No Supreme Court session would be complete without a case dealing with arbitration.

There's a 6-4 split among the Circuit Courts on the question of whether Section 3 of the Federal Arbitration Act requires district courts to stay a lawsuit pending arbitration, or whether district courts have discretion to dismiss when all claims are subject to arbitration.

That's the question in Smith v. Spizzirri (US Supreme Court, certiorari granted 01/12/2023) [Briefs].

Federal Arbitration Act Section 3 says that when a court finds a dispute subject to arbitration, the court “shall on application of one of the parties stay the trial of the action until such arbitration” has concluded.

Does this allow district courts the option of dismissing the case rather than granting a stay?

Six circuits say the only option is to grant a stay. That's what the plain text says.

Four circuits say that district courts have discretion – in cases where the entire dispute is subject to arbitration – to dismiss the case.

My view is that the statute says to grant a stay – period. The Supreme Court has often held that courts have no business adding things to statutes, and courts must apply statutes the way Congress wrote them.

Look for an oral argument in the spring, and a decision before summer.