Preferred Care of Delaware, Inc. v. Estate of Hopkins Ex Rel. Hopkins
845 F.3d 765
| 6th Cir. | 2017Background
- Marilyn Hopkins’ estate sued Preferred Care (nursing-home owners/operators) in Kentucky state court on multiple state-law claims after Hopkins’ death.
- Preferred Care removed the case to federal court and moved to enforce an arbitration provision in Hopkins’ admissions agreement.
- The federal district court (1) compelled arbitration for covered claims, (2) stayed the federal action pending arbitration, and (3) enjoined Hopkins’ estate from proceeding in the state-court action on those covered claims (except wrongful-death claims).
- Hopkins appealed the district court’s order; Preferred Care moved to dismiss the appeal for lack of appellate jurisdiction under the Federal Arbitration Act (FAA).
- The Sixth Circuit considered whether § 16 of the FAA permits appellate review of the district court’s orders (compel arbitration, stay proceedings, and injunction forbidding state-court litigation) and concluded it does not.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the appeal of the district court order compelling arbitration is permitted | Hopkins: order is effectively a final decision and therefore appealable under the FAA’s final-decision provision | Preferred Care: § 16(b) forbids appeals from interlocutory orders compelling or directing arbitration | Held: Not appealable—§ 16(b) bars appeals from orders directing or compelling arbitration when the district court stays rather than dismisses the action |
| Whether the appeal may proceed from the district court’s stay of the federal action | Hopkins: structural finality renders the order appealable | Preferred Care: § 16(b) explicitly forbids appeals from stays under § 3 of the FAA | Held: Not appealable—appeal of the stay is barred by § 16(b) |
| Whether the injunction enjoining state-court proceedings is appealable (or creates jurisdiction via § 1292(a)) | Hopkins: injunctions are appealable under 28 U.S.C. § 1292(a) and form makes the order final | Preferred Care: § 16 is the specific statute governing arbitration-related appeals and supersedes general appellate statutes like § 1292(a) | Held: Not appealable—an injunction enforcing arbitration falls within § 16(b)’s bar; § 16 controls over § 1292(a) |
| Whether the court should exercise pendent appellate jurisdiction over other issues if injunction review were permitted | Hopkins: related issues are inextricably intertwined and should be reviewed together | Preferred Care: jurisdictional bar to the injunction prevents pendent jurisdiction | Held: Not reached—because no jurisdiction over the injunction, pendent jurisdiction is unavailable |
Key Cases Cited
- Green Tree Fin. Corp.–Ala. v. Randolph, 531 U.S. 79 (2000) (order compelling arbitration is appealable only if it is a final decision, e.g., when the district court dismisses rather than stays the case)
- ATAC Corp. v. Arthur Treacher’s, Inc., 280 F.3d 1091 (6th Cir. 2002) (distinguishing appealability when cases are stayed versus dismissed)
- Moglia v. Pac. Emp’rs Ins. Co., 547 F.3d 835 (7th Cir. 2008) (§16(b) bars appeals from interlocutory pro-arbitration orders, including injunctions enforcing arbitration)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (reiterating federal policy favoring arbitration)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (policy of moving arbitrable disputes out of court and into arbitration quickly)
- Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271 (1988) (equating certain orders compelling contractual performance with injunctions)
- Great Earth Cos., Inc. v. Simons, 288 F.3d 878 (6th Cir. 2002) (appealable where district court entered final judgment rather than a stay)