Opinion ID: 27805
Heading Depth: 2
Heading Rank: 2

Heading: jurisdiction

Text: A District Court Order That Compels Arbitration, Stays the Underlying State Court Proceedings, and Closes the Case is an Immediately Appealable, Final Decision Within the Contemplation of § 16(a)(3) of the FAA. Section 16(a)(3) of the FAA provides as follows: “An appeal may be taken from a final decision with respect to an arbitration that is subject to this title.” 9 U.S.C. § 16(a)(3). That section preserves immediate appeal of any “‘final decision’ with respect 5 to arbitration,” regardless of whether the decision is favorable or hostile to arbitration. Id. The FAA does not, however, expressly define the term “final decision.” Appellees argue that this court lacks appellate jurisdiction because the district court did not issue an immediately appealable “final decision.” Specifically, Appellees maintain that because the district court’s order compelled arbitration and “closed” the case instead of compelling arbitration and “dismissing” the case, this court lacks jurisdiction to hear the appeal of the ruling of the district court. Appellees cite Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000) for the proposition that “closing” a case neither ends the litigation on the merits nor terminates the district court’s involvement in the matter, thereby precluding this court’s appellate jurisdiction over the dispute. 531 U.S. at 85, 121 S.Ct. at 519. Conversely, Appellants also rely on Green Tree, but for the proposition that, in the instant dispute, “closing” a case is the functional equivalent of “dismissing” it. Appellants argue that by compelling arbitration and “closing” the case, the district court issued an immediately appealable, final decision under § 16(a)(3) because the court’s order ended the entire litigation on the merits in that court, leaving nothing more for that court to do but execute the judgment. Id. In Green Tree, the Supreme Court held that an order dismissing an action is a “final decision” within the traditional understanding of the term, even when the dismissal is in favor of arbitration and the parties could later return to court to enter judgment on an arbitration award. Id. at 85-88, 121 S.Ct. at 519-21. In reaching this result, the Supreme Court applied the well-established meaning of “final decision” as 6 one that “ends the litigation on the merits and leaves nothing more for the court to do but execute the judgment.” Id. at 85; 121 S.Ct. at 519 (citing Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994), and Coopers & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978) (both quoting Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945)). The Green Tree Court concluded that the reference in 9 U.S.C. § 16(a)(3) to “a final decision with respect to an arbitration that is subject to this title” authorizes appeals from final orders that grant or deny arbitration. Green Tree, 531 U.S. at 89; 121 S.Ct. at 521. No longer is it necessary to conduct an analysis of whether a lawsuit is an “independent” action, brought solely to enforce arbitration rights, or an action in which the request to arbitrate is “embedded” in a case that also raises substantive legal claims. Id. at 88; 121 S. Ct. at 520. By distinguishing the terms “dismiss” and “close” as they apply to disposition of a case, Appellees attempt to thwart the Court’s instruction in Green Tree to apply the well-established meaning of “final decision.” Appellees contend that the standards for appeal from a dismissal are different from the standards for appeal from orders closing the case. There is no practical distinction between “dismiss” and “close” for purposes of this appeal. The application of each word results in a termination on the merits, leaving the judgment-rendering court with nothing more to do but execute the judgment. We hold that where a district court with nothing before it but whether to compel arbitration and stay state court proceedings issues an order compelling arbitration, staying the underlying state court proceedings, and closing the case, thereby effectively ending the 7 entire matter on its merits and leaving nothing more for the district court to do but execute the judgment, appellate jurisdiction lies, as the decision is “final” within the contemplation of § 16(a)(3) of the FAA. Thus, we hold that this court has jurisdiction to entertain the instant appeal.