Smith v. Spizzirri

P R E L I M I N A R Y P R I N T
Volume 601 U. S. Part 2
Pages 472–479
OFFICIAL REPORTS
OF
T H E S U P R E M E C O U R T
May 16, 2024
REBECCA A. WOMELDORF
reporter of decisions
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N O T I C E : This preliminary print is subject to formal revision before
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472 OCTOBER
TERM, 2023
Syllabus
SMITH et al. v. SPIZZIRRI et al.
certiorari
to the united states court of appeals for
the ninth circuit
No. 22–1218. Argued April 22, 2024—Decided May 16, 2024
The Federal Arbitration Act (FAA) sets forth procedures for enforcing
arbitration agreements in federal court. Section 3 of the FAA, entitled
“Stay of proceedings where issue therein referable to arbitration,” pro-
vides that when a dispute is subject to arbitration, the court “shall on
application of one of the parties stay the trial of the action until such
arbitration has been had in accordance with the terms of the agreement,
providing the applicant for the stay is not in default in proceeding with
such arbitration.” 9 U. S. C. § 3. In this case, petitioners fled suit
against respondents in state court alleging violations of federal and
state employment laws. Respondents then removed to federal court
and fled a motion to compel arbitration and dismiss the suit. Petition-
ers agreed their claims were arbitrable, but contended that § 3 of the
FAA required the District Court to stay the action pending arbitration
rather than dismissing it entirely. The District Court issued an order
compelling arbitration and dismissed the case without prejudice. The
Ninth Circuit affrmed.
Held: When a district court fnds that a lawsuit involves an arbitrable
dispute and a party has requested a stay of the court proceeding pend-
ing arbitration, § 3 compels the court to issue a stay, and the court lacks
discretion to dismiss the suit. Statutory text, structure, and purpose
all point to this conclusion. The plain text of § 3 requires a court to
stay the proceeding upon request. The statute's use of the word “shall”
“creates an obligation impervious to judicial discretion.” Lexecon Inc.
v. Milberg Weiss Bershad Hynes & Lerach, 523 U. S. 26, 35. The obliga-
tion is to “stay” the proceeding. Respondents insist that “stay” “means
only that the court must stop parallel in-court litigation, which a court
may achieve by dismissing,” Brief for Respondents 15, but respondents'
reading disregards the long-established legal meaning of the word
“stay” as a “temporary suspension” of legal proceedings. And respond-
ents' attempt to read “stay” to include “dismiss” cannot be squared with
the surrounding statutory text, which anticipates that the parties can
return to federal court if arbitration breaks down or fails to resolve the
dispute. Notwithstanding § 3's text, respondents suggest that district
courts retain the inherent authority to dismiss proceedings subject to
arbitration. But even assuming such inherent authority, “the inherent

Cite
as: 601 U. S. 472 (2024)
473
Opinion of the Court
powers of the courts may be controlled or overridden by statute or
r
ule,” Degen v. United States, 517 U. S. 820, 823, and § 3 does exactly
that.
The FAA's structure and purpose confrm that a stay is required.
Section 16(a)(1)(C) of the FAA authorizes an immediate interlocutory
appeal of the denial of an arbitration request. By contrast, Congress
made clear in § 16(b) that, outside of a narrow exception not applicable
here, an order compelling arbitration is not immediately appealable. If
a district court could dismiss a suit subject to arbitration even when a
party requests a stay, that dismissal would trigger the right to an imme-
diate appeal where Congress sought to forbid such an appeal. Finally,
staying rather than dismissing a suit comports with the supervisory role
that the FAA envisions for the courts. Keeping the suit on the court's
docket makes good sense in light of the FAA's mechanisms for courts
with proper jurisdiction to assist parties in arbitration. Pp. 475–479.
62 F. 4th 1201, reversed and remanded.
Sotomayor, J., delivered the opinion for a unanimous Court.
Daniel L. Geyser argued the cause for petitioners. With
him on the briefs were Nicholas J. Enoch, Clara S. Busta-
mante, and Angela M. Oliver.
E. Joshua Rosenkranz argued the cause for respondents.
With him on the brief were Thomas M. Bondy, Melanie R.
Hallums, Laurent R. G. Badoux, and Jeremy R. Peterman.*
Justice Sotomayor delivered the opinion of the Court.
The Federal Arbitration Act (FAA) sets forth procedures
for enforcing arbitration agreements in federal court. Sec-
tion 3 of the FAA specifes that, when a dispute is subject to
arbitration, the court “shall on application of one of the par-
ties stay the trial of the action until [the] arbitration” has
*Briefs of amici curiae urging affrmance were fled for the American
Association for Justice by Jeffrey R. White and Sean Domnick; and for
the New England Legal Foundation by Benjamin G. Robbins and Daniel
B. Winslow.
Andrew J. Pincus, Archis A. Parasharami, Jennifer B. Dickey, and Jon-
athan D. Urick fled a brief for the Chamber of Commerce of the United
States of America as amicus curiae.
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474 SMITH
v. SPIZZIRRI
Opinion of the Court
concluded. 9 U. S. C. § 3. The question here is whether § 3
per
mits a court to dismiss the case instead of issuing a stay
when the dispute is subject to arbitration and a party re-
quests a stay pending arbitration. It does not.
I
Petitioners are current and former delivery drivers for an
on-demand delivery service operated by respondents. They
sued respondents in Arizona state court, alleging violations
of federal and state employment laws. Petitioners claimed
that respondents misclassifed them as independent contrac-
tors, failed to pay required minimum and overtime wages,
and failed to provide paid sick leave. After removing the
case to federal court, respondents moved to compel arbitra-
tion and dismiss the suit. Petitioners conceded that all of
their claims were arbitrable, but they argued that § 3 of the
FAA required the District Court to stay the action pending
arbitration rather than dismissing it entirely.
The District Court issued an order compelling arbitration
and dismissing the case without prejudice. The court noted
that “the text of 9 U. S. C. § 3 suggests that the action should
be stayed,” but that Circuit precedent “instructed that `not-
withstanding the language of § 3, a district court may
either stay the action or dismiss it outright when, . . . the
court determines that all of the claims raised in the action
are subject to arbitration.' ” Forrest v. Spizzirri, 2022 WL
2191931, *1 (D Ariz., June 17, 2022) (quoting Johnmoham-
madi v. Bloomingdale's, Inc., 755 F. 3d 1072, 1074 (CA9
2014)). Because “all claims raised [were] subject to arbitra-
tion,” the District Court concluded that it “retain[ed] discre-
tion to dismiss the action.” 2022 WL 2191931, *1.
The Ninth Circuit affrmed. While that court likewise
acknowledged that “the plain text of the FAA appears to
mandate a stay,” the court explained that it was bound by
Circuit precedent recognizing the District Court's “discre-
tion to dismiss.” Forrest v. Spizzirri, 62 F. 4th 1201, 1203,
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Cite
as: 601 U. S. 472 (2024)
475
Opinion of the Court
1205 (2023). Judge Graber, joined by Judge Desai, con-
curred,
asserting that the Ninth Circuit's position was wrong
and urging this Court “to take up this question, which it has
sidestepped previously, and on which the courts of appeals
are divided.” Id., at 1206 (citation omitted).
This Court granted certiorari to answer the question it
previously left open and resolve the Circuit split.
1
601
U. S. ––– (2024).
II
In this statutory interpretation case, text, structure, and
purpose all point to the same conclusion: When a federal
court fnds that a dispute is subject to arbitration, and a
party has requested a stay of the court proceeding pending
arbitration, the court does not have discretion to dismiss
1
This Court has previously reserved the question presented by this
case. See Green Tree Financial Corp.-Ala. v. Randolph, 531 U. S. 79, 87,
n. 2 (2000) (“Had the District Court entered a stay instead of a dismissal
in this case, that order would not be appealable. . . . The question whether
the District Court should have taken that course is not before us, and we
do not address it”); see also Lamps Plus, Inc. v. Varela, 587 U. S. 176, 181,
n. 1 (2019) (noting that the Court reserved this question in Randolph and
that it remained unanswered).
The split on the question has since deepened. Compare Arabian Mo-
tors Group W.L.L. v. Ford Motor Co., 19 F. 4th 938, 941–943 (CA6 2021)
(reading § 3 to mandate a stay when all claims are subject to arbitration
and a party properly requests a stay); Katz v. Cellco Partnership, 794
F. 3d 341, 345–347 (CA2 2015) (same); Lloyd v. HOVENSA, LLC, 369 F. 3d
263, 269–271 (CA3 2004) (same); Adair Bus Sales, Inc. v. Blue Bird Corp.,
25 F. 3d 953, 955 (CA10 1994) (same); Bender v. A.G. Edwards & Sons,
Inc., 971 F. 2d 698, 699 (CA11 1992) (per curiam) (same); Halim v. Great
Gatsby's Auction Gallery, Inc., 516 F. 3d 557, 561 (CA7 2008) (reaching
the same conclusion even where no party requested a stay), with Green v.
SuperShuttle Int'l, Inc., 653 F. 3d 766, 769–770 (CA8 2011) (recognizing a
district court's discretion to dismiss, rather than stay, action where all of
the issues are subject to arbitration); Bercovitch v. Baldwin School, Inc.,
133 F. 3d 141, 156, n. 21 (CA1 1998) (same); Al ford v. Dean Witter Reyn-
olds, Inc., 975 F. 2d 1161, 1164 (CA5 1992) (same); Sparling v. Hoffman
Constr. Co., 864 F. 2d 635, 637–638 (CA9 1988) (same).

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476 SMITH
v. SPIZZIRRI
Opinion of the Court
the suit on the basis that all the claims are subject to
arbitrati
on.
2
Section 3 of the FAA, entitled “Stay of proceedings where
issue therein referable to arbitration,” provides that, when
any issue in a suit is subject to arbitration, the court
“shall on application of one of the parties stay the trial
of the action until such arbitration has been had in ac-
cordance with the terms of the agreement, providing the
applicant for the stay is not in default in proceeding with
such arbitration.”
Here, as in other contexts, the use of the word “shall” “cre-
ates an obligation impervious to judicial discretion.” Lexe-
con Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U. S.
26, 35 (1998). That plain statutory text requires a court to
stay the proceeding. See Maine Community Health Op-
tions v. United States, 590 U. S. 296, 310 (2020) (“ `Unlike the
word “may,” which implies discretion, the word “shall” usu-
ally connotes a requirement' ”). Indeed, this Court pre-
viously noted that the use of “shall” in neighboring sections
of the FAA created a mandatory obligation that left “no
place for the exercise of discretion by a district court.”
Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 218 (1985)
(discussing §§ 2–4 and explaining that the FAA “mandates
that district courts shall direct the parties to proceed to ar-
bitration on issues as to which an arbitration agreement has
been signed”). The same is true here. When § 3 says that
a court “shall . . . stay” the proceeding, the court must do so.
Just as “shall” means “shall,” “stay” means “stay.” Re-
spondents insist that “stay” in § 3 “means only that the court
2
That is not to say that the court is barred from dismissing the suit if
there is a separate reason to dismiss, unrelated to the fact that an issue
in the case is subject to arbitration. If, for example, the court lacks juris-
diction, § 3 is no bar to dismissing on that basis. See Exxon Mobil Corp.
v. Allapattah Services, Inc., 545 U. S. 546, 552 (2005) (observing that “[t]he
district courts of the United States . . . are `courts of limited jurisdiction' ”
and “ `possess only that power authorized by Constitution and statute' ”).

Cite
as: 601 U. S. 472 (2024)
477
Opinion of the Court
must stop parallel in-court litigation, which a court may
ach
ieve by dismissing without retaining jurisdiction.” Brief
for Respondents 15. There are, however, two signifcant
problems with that reading. First, it disregards the long-
established legal meaning of the word “stay.” Even at the
time of the enactment of the FAA, that term denoted the
“temporary suspension” of legal proceedings, not the conclu-
sive termination of such proceedings. Black's Law Diction-
ary 1109 (2d ed. 1910) (“Stay of proceedings”). Second, re-
spondents' attempt to read “stay” to include “dismiss” cannot
be squared with the surrounding statutory text. By direct-
ing a court to stay the proceeding “until such arbitration has
been had in accordance with the terms of the agreement,”
and only so long as “the applicant . . . is not in default in
proceeding with the arbitration,” § 3 ensures that the parties
can return to federal court if arbitration breaks down or fails
to resolve the dispute. That return ticket is not available if
the court dismisses the suit rather than staying it.
3
Respondents also suggest that, notwithstanding the statu-
tory language, district courts retain inherent authority to
dismiss proceedings subject to arbitration. This attempt to
evade the plain meaning of the text also falls short. Even
assuming district courts have this inherent authority, “the
inherent powers of the courts may be controlled or overrid-
den by statute or rule.” Degen v. United States, 517 U. S.
820, 823 (1996). Section 3 does exactly that. It overrides
any discretion a district court might otherwise have had to
dismiss a suit when the parties have agreed to arbitration.
If there were any doubt, the FAA's structure and purpose
confrm that a stay is required. When a court denies a re-
quest for arbitration, § 16 of the FAA authorizes an immedi-
3
It is no answer to say, as respondents do, that a party can fle a new
suit in federal court in those circumstances. Even if that is true as a
practical matter, but see Green, 653 F. 3d, at 770 (fagging potential
statute-of-limitations problem), requiring a party to fle a new suit ignores
the plain text of § 3.
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478 SMITH
v. SPIZZIRRI
Opinion of the Court
ate interlocutory appeal. See 9 U. S. C. § 16(a)(1)(C). When
a
court compels arbitration, by contrast, Congress made
clear that, absent certifcation of a controlling question of law
by the district court under 28 U. S. C. § 1292(b), the order
compelling arbitration is not immediately appealable. See 9
U. S. C. § 16(b). The choice to “provid[e] for immediate in-
terlocutory appeals of orders denying—but not of orders
granting—motions to compel arbitration,” Coinbase, Inc. v.
Bielski, 599 U. S. 736, 740 (2023), is consistent with Con-
gress's purpose in the FAA “to move the parties to an arbi-
trable dispute out of court and into arbitration as quickly
and easily as possible,” Moses H. Cone Memorial Hospital
v. Mercury Constr. Corp., 460 U. S. 1, 22 (1983). If a district
court dismisses a suit subject to arbitration even when a
party requests a stay, that dismissal triggers the right to
an immediate appeal where Congress sought to forbid such
an appeal.
Finally, staying rather than dismissing a suit comports
with the supervisory role that the FAA envisions for the
courts. The FAA provides mechanisms for courts with
proper jurisdiction to assist parties in arbitration by, for ex-
ample, appointing an arbitrator, see 9 U. S. C. § 5; enforcing
subpoenas issued by arbitrators to compel testimony or
produce evidence, see § 7; and facilitating recovery on an ar-
bitral award, see § 9. Keeping the suit on the court's docket
makes good sense in light of this potential ongoing role, and
it avoids costs and complications that might arise if a party
were required to bring a new suit and pay a new fling fee
to invoke the FAA's procedural protections. District courts
can, of course, adopt practices to minimize any administra-
tive burden caused by the stays that § 3 requires.
***
When a district court fnds that a lawsuit involves an arbi-
trable dispute, and a party requests a stay pending arbitra-
tion, § 3 of the FAA compels the court to stay the proceeding.

Cite
as: 601 U. S. 472 (2024)
479
Opinion of the Court
The contrary judgment of the Court of Appeals is reversed,
and
the case is remanded for further proceedings consistent
with this opinion.
It is so ordered.
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Reporter’s Note
The attached opinion has been revised to refect the usual publication
and citation style of the United States Reports. The revised pagination
makes available the offcial United States Reports citation in advance of
publication. The syllabus has been prepared by the Reporter of Decisions
for the convenience of the reader and constitutes no part of the opinion of
the Court. A list of counsel who argued or fled briefs in this case, and
who were members of the bar of this Court at the time this case was
argued, has been inserted following the syllabus. Other revisions may
include adjustments to formatting, captions, citation form, and any errant
punctuation. The following additional edits were made:
None