Supreme Court Rules FAA Requires Courts To Grant Stay Requests After Compelling Arbitration

On May 16, 2024, the Supreme Court of the United States held that when a federal district court determines that claims in a lawsuit are subject to arbitration and a party requests a stay, the Federal Arbitration Act (FAA) requires the court to issue a stay pending arbitration and the court lacks the discretion to dismiss the lawsuit.

Quick Hits

• The Supreme Court held that Section 3 of the FAA requires federal courts to grant stays of lawsuits after claims are sent to arbitration, if a stay is requested.
• The ruling resolves a 6–4 circuit split regarding whether federal district courts must stay lawsuits pending arbitration or whether they have discretion to dismiss them.