856 F. Supp. 2d 638
S.D.N.Y.2012Background
- EY moves to stay proceedings during its appeal of the denial of arbitration of Sutherland’s wages claim.
- Court applies Nken four-factor test for stays and discusses likelihood of success on merits and irreparable harm.
- Court finds EY has a non-frivolous but problematic appeal under American Express framework.
- Irreparable harm to EY is the loss of an arbitration forum bargained for, while plaintiff faces delay, potentially remedied by pre-judgment interest.
- Courts weigh public interest and judicial economy; stay is granted for discovery pending appeal on conditions, while class-certification briefing is not stayed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether to stay proceedings pending interlocutory appeal | Sutherland opposes stay; wants resolution on merits. | EY seeks stay to preserve arbitration rights and avoid class proceedings. | Stay granted in part; discovery stayed pending appeal. |
| Likelihood of success on the merits on appeal | American Express standard supports arbitration non-class feasibility. | Appeal may raise substantial issues but is not clearly non-meritorious. | Non-frivolous but not clearly persuasive; issues potentially substantial but not promising. |
| Irreparable harm to movant | Delay harms Sutherland’s ability to obtain timely relief. | Arbitration forum denial harms EY’s speed and economy of dispute resolution. | Harm to EY cognizable; harm to Sutherland reparable with interest; balance favors EY. |
| Public interest in stay | Proceedings should proceed to protect statutory rights. | Judicial economy and potential dispositive appeal favor stay. | Public policy weighs toward stay of discovery pending appeal; class-certification not stayed. |
| Conditions of stay | N/A | Defendant must seek expedited briefing and waive limitations for class members. | Stay conditioned on expedited briefing and tolling waiver; class-certification briefing not stayed. |
Key Cases Cited
- Nken v. Holder, 556 U.S. 418 (U.S. (2009)) (four-factor stay framework; balance of hardships; irreparable injury)
- In re American Express Merchants’ Litig., 667 F.3d 204 (2d Cir. 2012) (arbitration feasibility and class-action considerations in AmEx context)
- Citigroup Global Mkts., Inc. v. VCG Special Opportunities Master Fund Ltd., 598 F.3d 30 (2d Cir. 2010) (non-frivolous but substantial questions can warrant a stay)
- Mohammed v. Reno, 309 F.3d 95 (2d Cir. 2002) (strength of merits vs. irreparable harm; inverse relationship)
- Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79 (U.S. (2000)) (non-class arbitration feasibility under federal statute)
- American Express Merchants’ Litig. v., (see above) (2d Cir. 2012) (relevant precedent on costs and class arbitration feasibility)
- Emery Air Freight Corp. v. Local Union 295, 786 F.2d 93 (2d Cir. 1986) (economic injunctive considerations in stay analyses)
- Alascom, Inc. v. ITT North Elec. Co., 727 F.2d 1419 (9th Cir. 1984) (arbitration-related harm considerations)
- Italian Colors Rest. v. Am. Express Travel Related Servs. Co., 554 F.3d 300 (2d Cir. 2009) (fee-shifting and expert-witness considerations in feasibility)
- Concepcion, 131 S. Ct. 1740 (S. Ct. 2011) (favoring arbitration unaffected by class-action concerns)