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Supreme Court decisions
No. 22-1218May 16, 2024LawReversed and remanded

The question

Whether Section 3 of the Federal Arbitration Act requires a district court to stay a lawsuit pending arbitration when a party requests a stay, or whether the court may instead dismiss the suit.

Smith v. Spizzirri

What the Court decided

The Court reversed the Ninth Circuit. When a district court finds a lawsuit involves an arbitrable dispute and a party requests a stay pending arbitration, Section 3 of the Federal Arbitration Act compels the court to stay the proceeding and leaves it no discretion to dismiss the suit. The statute's use of "shall" creates an obligation impervious to judicial discretion, and the settled meaning of "stay" is a temporary suspension, not a dismissal.

How the justices split

Unanimous
In favor 9
Sotomayor
Roberts
Thomas
Alito
Kagan
Gorsuch
Kavanaugh
Barrett
Jackson

The Court's opinion

Sotomayor, writing alone

Section 3 of the FAA requires a district court to stay a suit involving an arbitrable dispute when a party requests a stay, and the court cannot dismiss instead. The word shall creates an obligation impervious to judicial discretion, and stay carries its long-established meaning of a temporary suspension rather than a dismissal. Reading stay to permit dismissal conflicts with surrounding text that anticipates parties returning to federal court if arbitration fails, and any inherent authority to dismiss is overridden by the statute. The FAA's structure confirms this: Section 16 allows immediate appeal of a denial of arbitration but forbids immediate appeal of an order compelling it, and a dismissal would improperly trigger such an appeal. Staying rather than dismissing also fits the supervisory role the FAA envisions for courts assisting parties in arbitration.

How we know · 5 sourced claims
  • The Court held that Section 3 of the FAA compels a district court to stay a suit pending arbitration when a party requests a stay and leaves the court no discretion to dismiss.

    Source: syllabus, Held

  • The Court relied on the statute's use of the word shall, which creates an obligation impervious to judicial discretion.

    Source: syllabus, Held

  • The Court read stay to mean a temporary suspension of proceedings and rejected the argument that it permits dismissal.

    Source: syllabus, Held

  • The judgment of the Ninth Circuit was reversed and remanded.

    Source: syllabus, Held

  • Justice Sotomayor delivered the opinion for a unanimous Court.

    Source: syllabus, lineup

Read the opinion on supremecourt.gov