Second Circuit Clarifies That A District Court Must Stay, And May Not Dismiss, Arbitrable Claims Pending Arbitration

​When a trial court determines that all of the claims before it must be arbitrated, does the court have discretion to dismiss the case or must it stay the case pending arbitration if one party has requested a stay?  Widening a split among the Circuits, the U.S. Court of Appeals for the Second Circuit ruled on July 28, 2015 that Section 3 of the Federal Arbitration Act (also known as the "FAA") imposes a mandatory stay when all claims have been referred to arbitration and a party has requested a stay.  Katz v. Cellco P'ship, No. 14-138, 2015 U.S. App. LEXIS 13055 (2nd. Cir. July 28, 2015).  The Second Circuit's opinion, which overturned a ruling by Southern District Judge Briccetti dismissing the case, marks an important clarification of the law for practitioners in the Second Circuit, and underscores the disparate approaches to this issue among the Circuits.