Opinion ID: 172856
Heading Depth: 2
Heading Rank: 2

Heading: The Supreme Court's Interpretation in Arthur Andersen, L.L.P. v. Carlisle

Text: While it does not control the outcome of the question presented here, the Supreme Court's recent decision in Arthur Andersen, L.L.P. v. Carlisle, ___ U.S. ___, 129 S.Ct. 1896, 173 L.Ed.2d 832 (2009), provides additional support for a categorical, bright-line approach to § 16(a). The issue presented in that case was whether the denial of a motion to compel a non-signatory to an arbitration agreement nevertheless to arbitrate was still brought under section 3, so as to invoke the appellate jurisdiction granted in § 16(a). The Court answered that question in the affirmative, and in doing so it admonished courts to avoid conflating the question of § 16(a) appellate jurisdiction with the underlying merits of the appeal. The Sixth Circuit had looked through the § 3 motion to the merits of the arguments, and held that because  in its view  Arthur Andersen could not enforce the arbitration agreement against Carlisle, § 16(a) did not confer jurisdiction to hear the appeal. But the Supreme Court held that [j]urisdiction over the appeal ... must be determined by focusing on the category of order appealed from, rather than upon the strength of the grounds for reversing the order. 129 S.Ct. at 1900 (internal quotation marks omitted, emphasis added). Thus, even if Arthur Andersen's argument for why it could enforce the arbitration agreement against Carlisle were utterly frivolous, the reviewing court would not be divested of jurisdiction to hear the appeal, as long as Arthur Andersen explicitly asked for a stay pursuant to § 3. Id.; see also id. at 1901 ([E]ven utter frivolousness of the underlying request for a § 3 stay cannot turn a denial into something other than `an order ... refusing a stay of any action under section 3.') (quoting 9 U.S.C. § 16(a)(1)). In dissent, three Justices argued that whether the party against whom enforcement of an arbitration agreement is sought is a party to the agreement should be a threshold question to the application of § 16(a), but the majority solidly rejected that approach. Determination of whether § 3 was invoked in a denied stay request is immeasurably more simple and less factbound than the threshold determination respondents would replace it with.... It is more appropriate to grapple with that merits question after the court has accepted jurisdiction over the case. Arthur Andersen, 129 S.Ct. at 1901. Rather than engage in a factually-specific inquiry into the status of the parties, the majority instructed the lower courts to look squarely and exclusively at the category of the order appealed from to decide whether § 16(a) applies. See id. at 1900. While the question facing this court is different, the methodology we adopt today is consistent with the Supreme Court's admonition. PDC's preferred approach would require courts of appeals carefully to parse the district court motions and memoranda to determine, factually, whether the arguments pressed in the district court sufficiently raised the concerns of the FAA to deem the motion brought under section 3 or under section 4. To us, this is akin to the type of factbound threshold determination the respondents urged the Supreme Court to adopt in Arthur Andersen, and that the Court rejected. By focusing on the category of the order appealed from, as the Arthur Andersen Court did, we avoid conflating the jurisdictional question and the merits of the appeal and reach our jurisdictional answer in a simple, streamlined process.