SUPREME COURT OF THE UNITED STATES
_________________
No. 22–105
_________________
COINBASE, INC., PETITIONER
v. ABRAHAM
BIELSKI
on writ of certiorari to the united states
court of appeals for the ninth circuit
[June 23, 2023]
Justice Jackson, with whom Justice Sotomayor
and Justice Kagan join, and with whom Justice Thomas joins as to
Parts II, III, and IV, dissenting.
When a federal court of appeals conducts
interlocutory review of a trial court order, the rest of the case
remains at the trial court level. Usually, the trial judge then
makes a particularized determination upon request, based on the
facts and circumstances of that case, as to whether the remaining
part of the case should continue unabated or be paused (stayed)
pending appeal. This discretionary decisionmaking promotes
procedural fairness because it allows for a balancing of all
relevant interests. See
Nken v.
Holder,
556 U.S.
418, 434 (2009).
Today, the Court departs from this traditional
approach. It holds that, with respect to an interlocutory appeal of
a trial court order denying arbitration, a trial court must always
“stay its pre-trial and trial proceedings while the interlocutory
appeal is ongoing.”
Ante, at 1. In other words, in this
context, the Court sees fit to impose a mandatory general stay of
trial court proceedings.
This mandatory-general-stay rule for
interlocutory arbitrability appeals comes out of nowhere. No
statute imposes it. Nor does any decision of this Court. Yet
today’s majority invents a new stay rule perpetually favoring one
class of litigants—defendants seeking arbitration. Those defendants
will now receive a stay even when, according to the usual equitable
analysis, there is no good reason for one. And, in reaching this
result, the Court concludes for the first time that an
interlocutory appeal about one matter (arbitrability) bars the
district court from proceeding on another (the merits). That logic
has such significant implications for federal litigation that the
majority itself shies away from the Pandora’s box it may have
opened.
I see no basis here for wresting away the
discretion traditionally entrusted to the judge closest to a case.
I respectfully dissent.
I
Congress did not impose the
mandatory-general-stay rule that the majority adopts today.
Start with the governing statute. Congress
addressed the kind of interlocutory appeals at issue here in 9
U. S. C. §16—the section of the Federal Arbitration Act
it enacted to govern “Appeals.” 102Stat. 4671 (amending the Federal
Arbitration Act, 9 U. S. C. §1
et seq.). Section
16 provides that “[a]n appeal may be taken from” specified orders
and decisions, and “an appeal may not be taken from” others. The
appeals that §16 authorizes include interlocutory appeals of orders
denying requests for arbitration. §§16(a)(1)(A)–(C).
But nowhere did Congress provide that such an
interlocutory appeal automatically triggers a general stay of
pre-trial and trial proceedings. As the majority opinion admits,
§16 never even mentions a stay pending appeal.
Ante, at
3.
Even beyond that, related provisions confirm
that Congress imposed no mandatory general stay in §16 appeals.
“Where Congress includes particular language in one section of a
statute but omits it in another section of the same Act, it is
generally presumed that Congress acts intentionally and purposely
in the disparate inclusion or exclusion.”
Nken, 556
U. S., at 430 (alterations and internal quotation marks
omitted). Congress did that here—twice.
First, Congress expressly mandated a general
interlocutory stay in another provision of the same 1988 law that
enacted §16. See 102Stat. 4652, 4670–4671. Like §16, that other
provision—codified at 28 U. S. C. §1292(d)(4)—authorizes
interlocutory appeals. See §1292(d)(4)(A). But unlike §16, the text
of that other provision specifies that, upon an interlocutory
appeal, “proceedings shall be . . . stayed until the
appeal has been decided.” §1292(d)(4)(B). This resembles the rule
the majority adopts today for §16 appeals. Yet Congress omitted it
from §16, while simultaneously imposing it in §1292(d)(4).
Second, Congress expressly mandated a general
interlocutory stay in another provision of the Federal Arbitration
Act. Section 3 pertains to a circumstance in which the trial court
is “satisfied” that an issue should be referred to arbitration. 9
U. S. C. §3. In such a case, the statute expressly
provides that the trial court “
shall on application of one
of the parties stay the trial of the action until such arbitration
has been had.”
Ibid. (emphasis added). Again, the contrast
with §16 is stark. Congress specified a mandatory general stay of
trial court proceedings in §3 (when the trial court determines that
arbitration is warranted) but not §16(a) (when the court determines
that arbitration is unwarranted).
The majority opinion waves away these
mandatory-general-stay provisions by jerry-rigging explanations for
why Congress mandated those stays expressly without doing so in
§16.
Ante, at 8–9. But the point remains: Congress focused
on stays when crafting the 1988 law and the Federal Arbitration
Act. And when it intended to mandate interlocutory stays, it said
so expressly. Nothing stopped Congress from doing so in §16—yet it
chose not to. This underscores that §16 does not mandate a
stay.[
1]
Given all this, it is no surprise that
Congress’s enactments barely figure into the majority opinion. The
mandatory-general-stay rule is so untethered from §16 that the
statutory text has no role in the Court’s reasoning.
And when Congress’s work finally does take the
stage near the end of the Court’s analysis, it plays a minor part.
See
ante, at 6–7. The Court notes that other statutes
expressly provide that appeals do
not automatically stay
district court proceedings.
Ante, at 7, and n. 6. From this,
the Court tries to draw an across-the-board inference that, unless
Congress expressly disavows the majority’s mandatory-general-stay
rule, that rule applies.
The Court’s inference fails. The statutes that
the majority points to have nothing to do with arbitration or §16
(unlike the two provisions discussed above, which were enacted in
the same 1988 law as §16 and codified alongside §16 in the Federal
Arbitration Act, respectively,
supra, at 3).
Moreover, and in any event, the majority’s cited
statutes do not support the majority’s mandatory-general-stay rule.
The majority invokes statutes that expressly preclude automatic
stays of
all trial court proceedings. But if the majority is
correct that Congress intended the opposite when a statute is
silent, then stays of
all trial court proceedings would be
required. Yet, the majority’s own holding does not go that far. See
ante, at 4, n. 2. Instead, the majority requires stays for
some proceedings (those related to the merits) but not
others (those related to costs and fees),
ibid.—a line that
appears nowhere in the majority’s cited statutes.
At the end of the day, the best the majority can
do is point to a smattering of provisions that do
not
contain the rule that the majority adopts. And those provisions do
not even relate to §16 or the majority’s rule (staying litigation
generally but not proceedings on costs and fees). Neither those
statutes, nor any other, imposes on arbitrability appeals the stay
rule that the Court announces.
II
Unable to locate its rule in a statute, the
majority opinion pivots to “background principle[s].”
Ante,
at 3. But there is no background mandatory-general-stay rule.
To the contrary, the background rule is that
courts have case-by-case discretion regarding whether or not to
issue a stay. “[T]he power to stay proceedings is incidental to the
power inherent in every court to control the disposition of the
causes on its docket.”
Landis v.
North American Co.,
299 U.S.
248, 254 (1936). That power is discretionary—it “calls for the
exercise of judgment, which must weigh competing interests” in each
particular case.
Id., at 254–255. One key to this
discretionary-stay tradition is its “suppleness of adaptation to
varying conditions.”
Id., at 256. A stay “is not a matter of
right” and cannot be imposed “reflexively.”
Nken, 556
U. S., at 427 (internal quotation marks omitted).
That has long been the default rule. A court’s
discretion “to grant a stay pending review” is “firmly imbedded in
our judicial system, consonant with the historic procedures of
federal appellate courts.”
Ibid. (internal quotation marks
omitted). It is “a power as old as the judicial system of the
nation.”
Ibid. (internal quotation marks omitted); see 28
U. S. C. §1651(a) (All Writs Act, originally enacted in
1789, 1Stat. 81–82).
Significantly for present purposes,
discretionary stays are the default for interlocutory appeals in
particular—and this dates back to the first federal
interlocutory-appeal statute in 1891. Judiciary Act of 1891, §7,
26Stat. 828; see 15A C. Wright, A. Miller, & E. Cooper, Federal
Practice and Procedure §3906, p. 346 (3d ed. 2022). There, Congress
established that “proceedings . . . in the court
below
shall not be stayed unless otherwise ordered by that
court during the pendency of such appeal.” §7, 26Stat. 828
(emphasis added).
That statute cemented a background
discretionary-stay rule that governed even where Congress was
silent—as this Court has repeatedly recognized. Shortly after the
1891 Act, a case arose under conditions in which the Act was silent
about whether a stay should issue.
In re Haberman Mfg. Co.,
147 U.S.
525, 530 (1893) (finding “no express provision” on point). This
Court applied the background rule: “[T]he Circuit Court had a
discretion to grant or refuse” a stay.
Ibid. Another case of
statutory silence arose a few years later.
In re McKenzie,
180 U.S.
536, 550–551 (1901). Again, this Court reiterated federal
courts’ “inherent power . . . to stay or supersede
proceedings on appeal” from an interlocutory order.
Id., at
551. As this Court summarized in yet another case, the rule is that
the trial court has “authority” during an interlocutory appeal “to
take further proceedings in the cause, unless in its discretion it
orders them to be stayed, pending the appeal.”
Smith v.
Vulcan Iron Works,
165 U.S.
518, 525 (1897). That authority is “recognized” by the 1891 Act
but existed already as a traditional matter, “often exercised by
other courts of chancery.”
Ibid.
This was the background against which
Congress enacted §16. And—importantly—courts understood stays as
discretionary with respect to interlocutory appeals concerning
arbitrability. Before Congress enacted §16, parties brought
interlocutory arbitrability appeals under other sources of
appellate jurisdiction, and courts treated stays as discretionary,
not mandatory.[
2] Yet,
according to the majority, Congress sought to displace that common
understanding when it enacted §16—without saying anything at all
about stays pending appeal.
Even setting all that aside, the majority
opinion’s reliance on a “background” rule,
ante, at 3, still
fails. The majority has not shown that its
own rule (the
mandatory-general-stay rule) existed as a background matter when
Congress enacted §16 in 1988. Indeed, the majority opinion does not
identify
a single case in which this Court imposed a
mandatory general stay of pre-trial and trial proceedings pending
an interlocutory appeal. Not in an arbitration case. Not in an
analogous case about the proper adjudicatory forum for a dispute.
Not in any interlocutory appeal at all.
III
Because neither the statute nor any background
law states that an interlocutory appeal over arbitrability triggers
a mandatory general stay of trial court proceedings, the majority
opinion resorts to spinning such a rule from a single sentence in
Griggs v.
Provident Consumer Discount Co.,
459 U.S.
56 (1982) (
per curiam). But
Griggs expresses a
far narrower principle, and is thus insufficient to support the
majority’s mandatory-general-stay rule.
Griggs stands for a modest proposition:
Two courts should avoid exercising control over the same order or
judgment simultaneously. The problem
Griggs identifies is
the “danger a district court and a court of appeals would be
simultaneously analyzing the same judgment.”
Id., at 59. The
cure
Griggs prescribes is that “[t]he filing of a notice of
appeal . . . divests the district court of its
control over those aspects of the case involved in the appeal.”
Id., at 58.
And the reason is simple. Two courts
simultaneously analyzing the same judgment could step on each
other’s toes. It would interfere with the appellate court’s review
of an order if the district court modified that order mid-appeal.
Instead, an order should be reviewed by one court at a time.
This notion of “one order, one reviewing court”
is all that was at issue in
Griggs.
Griggs concerned
a party that tried to appeal a judgment while the District Court
was still considering whether to alter that same judgment.
Id., at 56. The Court held that the appeal needed to wait
until after the District Court’s work on that judgment was done.
Id., at 60–61. This result, which followed from the Federal
Rules of Appellate Procedure, was necessary to “avoi[d]” the
situation “in which district courts and courts of appeals would
both have had the power to
modify the same judgment.”
Id., at 60 (emphasis added).
Properly understood and applied here,
Griggs divests the district court of control over only a
narrow slice of the case. The interlocutory appeal addresses an
order declining to compel arbitration.
Griggs merely
prevents the district court from modifying that order—
i.e.,
Griggs prevents the district judge from revisiting whether
to compel arbitration while the appeal is pending.
Griggs
does not stop the district court from proceeding on matters other
than arbitrability.
The majority opinion, however, transmogrifies
Griggs into a sweeping stay of “pre-trial and trial
proceedings” on not just arbitrability, but also the merits.
Ante, at 1. According to the majority, if the question on
appeal is “whether the litigation may go forward in the district
court,” then the district court loses control over “
the entire
case.”
Ante, at 3–4 (emphasis added; internal quotation
marks omitted).
That rule far surpasses the statement in
Griggs—the sole statement on which the majority relies—that
a district court loses “control over those aspects of the case
involved in the appeal.” 459 U. S., at 58;
ante, at 3.
Only the arbitrability order is on appeal, not the merits. And
those matters are distinct. As this Court recognized (before
Congress enacted §16), “arbitrability” is “easily severable from
the merits of the underlying disputes.”
Moses H. Cone Memorial
Hospital v.
Mercury Constr. Corp.,
460 U.S.
1, 21 (1983).
The majority cannot justify why it treats these
“easily severable” matters as intertwined in an arbitrability
appeal. “[T]he question on appeal,” as the majority opinion
correctly identifies, is “whether the case belongs in arbitration.”
Ante, at 3. But the questions remaining before the district
court are different: whether the claims have merit, whether the
parties are entitled to the discovery they seek, and so on.
Proceedings on those questions would not interfere with the
appellate court’s review of the arbitrability order. Those
proceedings, in other words, do not implicate the
Griggs
principle, which addresses the “danger a district court and a court
of appeals would be simultaneously analyzing the same judgment.”
459 U. S., at 59.
The Court today expands
Griggs beyond
what the Congress that enacted §16 could have foreseen, let alone
silently incorporated. Indeed, the majority can identify no other
time this Court wielded
Griggs to mandate a stay of all
merits proceedings just because a distinct procedural question was
on appeal.
In fact, the majority’s supercharged version of
Griggs contradicts its own account of Congress’s intent.
Consider the statutes that the majority points to as models of how
Congress would reject a mandatory-general-stay rule.
Ante,
at 6–7, and n. 6; see
supra, at 4–5. Under those
statutes, the majority says, Congress intends that an interlocutory
appeal does “
not . . . automatically stay district
court proceedings.”
Ante, at 7. Yet, the majority also
seemingly accepts that under those statutes, “the
Griggs
principle applies.”
Ante, at 5. And per “the
Griggs
principle” as the majority sees it, in some cases an interlocutory
appeal
does automatically stay district court proceedings.
Ante, at 3–4. So a mandatory general stay is thus both
prohibited (by the statutory text) and required (by the majority’s
view of
Griggs).[
3] As
this contradiction underscores, the majority’s holding is
untethered from any statute and any existing conception of
Griggs.
IV
To justify its new mandatory-general-stay
rule, the majority ultimately rests on its assessment of what is
“sensible.”
Ante, at 5–6. But even the majority’s policy
concerns do not support its rule.
The dispute here turns on a subset of
cases—those in which a stay is not warranted under the usual
discretionary standard. See
Nken, 556 U. S., at 434.
All agree that an interlocutory appeal should trigger a stay if
that standard is met. But the majority goes further and requires a
stay in
all cases. Indeed, the majority mandates a stay even
if none of the traditional stay prerequisites are present:
likelihood of success on the merits, irreparable harm, favorable
balance of equities, and alignment with the public interest. See
ibid.
The majority offers no good reason for that
result. The majority says that an automatic stay protects the party
seeking arbitration and conserves resources in case the dispute
“ultimately head[s] to arbitration” after appeal.
Ante, at
6. But the concern fades if that scenario is
unrealistic—
i.e., if the party seeking arbitration is
unlikely to succeed on appeal.
The majority’s concern is even weaker when a
stay would harm the opposing party and the public interest much
more than it would protect the party seeking arbitration. Take, for
example, a case in which crucial evidence would be lost if
discovery is delayed. Say a witness is on her deathbed. Under the
majority’s rule, if an interlocutory arbitrability appeal under
§16(a) is pending, discovery must be stayed and the evidence must
be lost. That is apparently so even if the parties
agree
they wish to proceed with discovery.
The majority’s rule also prevents courts from
crafting case-specific solutions to balance all the interests at
stake. Under the traditional discretionary-stay rule, for instance,
a judge could allow the parties to conduct only the forms of
discovery that would also be permitted in arbitration. That would
save time and leave nobody worse off even if, as the majority
fears, the dispute ultimately heads to arbitration. But this kind
of equitable resolution, which the court and the parties might
consider “sensible,”
ante, at 6, is forbidden under the
majority’s mandatory-general-stay rule.
In addition, for each of the majority’s concerns
favoring a mandatory stay, there are countervailing considerations.
The majority professes interest in “efficiency.”
Ibid. But
forcing district court proceedings to a halt—for months or years
while the appeal runs its course—is itself inefficient. The
majority also fears losing other “asserted benefits of arbitration”
without a stay.
Ibid. But
with a stay, the party
opposing arbitration loses the benefits of immediate litigation. A
plaintiff’s request for injunctive protection against imminent
harm, for example, goes unanswered under the majority’s rule.
Similarly, while the majority laments settlement pressure on
parties seeking arbitration,
ibid., the rule it announces
imposes settlement pressure in the opposite direction. With justice
delayed while the case is on hold, parties “could be forced to
settle,”
ibid., because they do not wish—or cannot afford—to
leave their claims in limbo. Incongruously, the majority inflicts
these burdens on the party that
won the arbitrability issue
before the district court (the party opposing arbitration).
In categorically resolving these conflicts in
favor of the pro-arbitration party, the majority’s analysis comes
down to this: Because the pro-arbitration party gets an
interlocutory appeal, it should also get an automatic stay.
Ibid.; see L. Numeroff, If You Give a Mouse a Cookie (1985).
But Congress was entitled to give one without the other. And the
right to interlocutory appeal is valuable on its own. It is, as the
majority explains, “a rare statutory exception to the usual rule
that parties may not appeal before final judgment.”
Ante, at
3. Even without a stay, if the interlocutory appeal succeeds, the
pro-arbitration party gets its wish and the dispute goes to
arbitration.
Perhaps for those reasons, real-life parties do
not agree with the majority that an interlocutory arbitrability
appeal is pointless without an automatic stay. No stay was issued
in this case, for example, yet Coinbase still pursued its
interlocutory appeal. Nor did other parties stop bringing
interlocutory arbitrability appeals in the Circuits that had
interpreted §16 to impose no automatic stay.[
4]
Yet this Court steps in to give the
pro-arbitration party the additional right to an automatic stay
that Congress withheld. Now, any defendant that devises a
non-frivolous argument for arbitration can not only appeal, but
also press pause on the case—leaving plaintiffs to suffer harm,
lose evidence, and bleed dry their patience and funding in the
meantime. To confer that power on a class of litigants, based on
blanket judgments resolving competing policy concerns, is
Congress’s domain, not ours. And where Congress is silent, the job
of managing particular litigation, in light of the concrete
circumstances presented, belongs to the judge closest to a
case.
V
The Court today ventures down an uncharted
path—and that way lies madness. Never before had this Court
mandated a general stay simply because an interlocutory appeal
poses the question “whether the litigation may go forward in the
district court.”
Ante, at 3 (internal quotation marks
omitted). And a wide array of appeals seemingly fits that bill.
Indeed, any appeal over the proper forum for a
dispute would arguably raise the same question. After all, “an
arbitration agreement is ‘a specialized kind of forum-selection
clause.’ ”
Viking River Cruises, Inc. v.
Moriana, 596 U. S. ___, ___ (2022) (slip op., at 11)
(quoting
Scherk v.
Alberto-Culver Co.,
417 U.S.
506, 519 (1974)). If arbitration appeals require stays of all
pre-trial and trial proceedings, why not all appeals about
forum-selection agreements? And why not appeals over
non-contractual disputes over the proper adjudicator, like venue,
personal jurisdiction,
forum non conveniens, federal-court
jurisdiction, and abstention?
For that matter, “virtually every right that
could be enforced appropriately by pretrial dismissal might loosely
be described as conferring a ‘right not to stand trial.’ ”
Digital Equipment Corp. v.
Desktop Direct, Inc.,
511 U.S.
863, 873 (1994). “Such motions can be made in virtually every
case.”
Ibid. Does
every interlocutory appeal
concerning a case-dispositive issue now trigger a mandatory general
stay of trial court proceedings?
Taken that broadly, the mandatory-general-stay
rule the Court adopts today would upend federal litigation as we
know it. Aware that any interlocutory appeal on a dispositive issue
grinds the plaintiff’s case to a halt, defendants would presumably
pursue that tactic at every opportunity. This would occur, for
example, in interlocutory appeals available as of right under 28
U. S. C. §1292(a)(1) from orders granting preliminary
injunctions. Any defense lawyer worth her salt would invoke the
right to take that appeal and throw up some objection—to venue,
jurisdiction, or a dispositive element of the merits—to trigger a
mandatory stay. For plaintiffs, then, every preliminary-injunction
motion becomes a trap: Even if the motion is granted, the defendant
can take that opportunity to stop the trial court proceedings in
their tracks.
Facing these destabilizing consequences, the
majority stops short of following its own reasoning to that ominous
conclusion. Today’s holding reaches only arbitration appeals under
§16(a).
Ante, at 1, 7. And it might well be that the
concerns motivating today’s mandatory-general-stay rule do not
extend beyond arbitration. So the majority will not commit, for
example, to concluding that appeals over non-arbitration
forum-selection clauses warrant the same mandatory stay.
Ante, at 9.
I agree with that hesitation—even one step
further down this path is much too far. The mandatory-general-stay
rule that the Court manufactures is unmoored from Congress’s
commands and this Court’s precedent. And the windfall that the
Court gives to defendants seeking arbitration, preferencing their
interests over all others, is entirely unwarranted. The Court now
mandates that result no matter how unjust that outcome is,
according to traditional equitable standards, in a given case. This
endeavor is unfounded, unwise, and—most fundamentally—not our
role.
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