February 19, 2020

February 19, 2020

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February 17, 2020

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Tenth Circuit Finds No Jurisdiction to Hear Appeal of District Court Stay Order While Motion to Compel Arbitration Is Pending in Parallel Federal Court Proceeding

The plaintiff sued the defendants (collectively, DAL) in Colorado federal court after they denied his application for a Subway restaurant franchise. Because an arbitration clause in the franchise application required that any arbitration be held in Connecticut, DAL filed a motion to compel arbitration in Connecticut federal court. All proceedings in Colorado were stayed pending that motion. After DAL’s motion was denied, DAL appealed to the U.S. Court of Appeals for the Second Circuit. That appeal is currently pending. Meanwhile, the plaintiff asked the Colorado court to dissolve the stay and resume proceedings. The plaintiff lost that motion and appealed to the U.S. Court of Appeals for the Tenth Circuit. DAL moved to dismiss the appeal for lack of appellate jurisdiction.

The Tenth Circuit granted DAL’s motion, agreeing that the stay order issued in Colorado did not “end the litigation,” and thus was not a “final decision” for purposes of 28 U.S.C. § 1291. While there is an exception for stay orders that effectively put a party out of federal court, the exception was deemed inapplicable here, where one federal court deferred decisional authority to another federal court — the Second Circuit. The court also held that the stay order did not fall within the “small class” of collateral rulings that may be treated as “final” for purposes of appellate jurisdiction. It rejected the plaintiff’s contention that delaying review here until the entry of a final judgment “would imperil a substantial public interest” or “some particular value of a high order.”

Alemayehu v. Gemignani, No. 18-1340 (10th Cir. Apr. 17, 2019)

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About this Author

Alex Silverman, Insurance lawyer, Carlton Fields

Alex Silverman represents U.S. and international insurers and reinsurers in complex commercial litigation and arbitration, including complex insurance coverage disputes and reinsurance matters. He regularly litigates and counsels insurers in connection with multimillion-dollar first-party and third-party claims in state and federal courts across the country, and has also litigated large-scale commercial health care and insurance fraud actions on behalf of insurers, including False Claims Act and RICO actions. 

In addition, Alex has experience representing corporations in shareholder...