I’m a Federal Arbitration Act (FAA) procedural junkie, and I found an interesting opinion from a federal district court in Washington discussing the appealability of FAA orders. In Peters v. Amazon Services, No. C13-480, 2013 WL 7872692 (W.D. Wash. Nov. 5, 2013), the federal court had issued an order enforcing an arbitration agreement between Amazon.com and third-party sellers, and the court stayed the action and ordered the parties to provide status reports regarding the arbitration. The underlying dispute involved third-party sellers whose Amazon accounts were suspended, and the sellers brought a variety of legal claims against Amazon for withholding funds from sales.
In a prior post (click here), I discussed a recent Ninth Circuit decision from earlier this year analyzing the appealability of FAA orders. Generally, an order compelling arbitration may be appealed if the district court dismisses all the underlying claims, but such an order may not be appealed if the court stays the action pending arbitration.
Here, in the Amazon case, because there was a stay of the action pending arbitration, an appeal generally would not be proper under the Ninth Circuit’s reasoning. However, in an apparent attempt to appeal the order compelling arbitration, the plaintiffs engaged in a “novel” procedural strategy, as described by the district court. See Peters v. Amazon, No. C13-480, 2014 WL 1047172 (W.D. Wash. Mar. 14, 2014). Using Rule 41 of the Federal Rules of Civil Procedure, the plaintiffs asked the district court to voluntarily dismiss the stayed action with prejudice. Finding no harm to the defendant Amazon and no barrier to granting the plaintiffs’ request to voluntarily dismiss, the district court then entered an order dismissing the case with prejudice. Now, assuming a likely appeal from the plaintiffs, the ball will be in the Ninth Circuit’s court, and we will have to wait and see if the Ninth Circuit accepts or rejects this likely appeal.