JACK BLINCO, JR., оn behalf of himself and others similarly situated, DEBORAH BLINCO, on behalf of herself and others similarly situated, v. GREEN TREE SERVICING, LLC
No. 04-10888
United States Court of Appeals, Eleventh Circuit
April 26, 2004
D.C. Docket No. 04-00015-CV-J-16-HTS
Before CARNES, HULL and PRYOR, Circuit Judges.
In this putative class action against GREEN TREE SERVICING, LLC (“Green Tree“), Jack and Deborah Blinco allege that Green Tree failed to notify them of the transfer of the servicing of their loan in violation of the Real Estate Settlement Procedures Act (“RESPA“),
All disputes, claims or controversies arising from or relating to this contract or thе relationships which result from this contract, or the validity of this arbitration clause or the entire contract, shall be resolved by binding arbitration by one arbitrator . . . . This arbitration contract is made pursuant to a transaction in interstate commerce and shall be governed by the Federal Arbitration Act at
9 U.S.C. Section 1 . Judgment upon the award rendered may be entered in any court having jurisdiction. The Parties agree аnd understand that they choose arbitration instead of litigation to resolve all disputes. The parties understand that they have a right or opportunity to litigate disputes in court, but that they prefer to resolve their disputes through arbitration, except as provided herein . . . . The parties agree and understand that all disputes arising under case law, statutory law, and all other laws including, but not limited to, all contract, tort, and property disputes, will be subject to binding arbitration in accord with this contract.
The district court denied the motion to compel arbitration and denied the motion to stay. Green Tree аppealed the denial of its motion to compel arbitration under
The district court denied the motion to stay pending appeal because, although the court concluded that the appeal was not frivolous, the district court stated that it did not want “to set a preсedent of placing cases on hold while defendants seek interlocutory appeals of the [c]ourt‘s orders.” The court found no reason to delay discovery and proceedings pertaining to class certification. The district court also reasoned that a stay was unnecessary because the issue of arbitrability would be decided on appeal before trial.
Whether а party is entitled to a stay of all proceedings in the district court until resolution of an appeal from a denial of arbitration is an issue of first impression for this Court. The circuit courts that have considered the issue are split. Compare Bradford-Scott Data Corp., Inc. v. Physician Computer Network, Inc., 128 F.3d 504 (7th Cir. 1997) (holding that, upon motion, a stay of litigation in the district court is proper during the pendency of a non-frivolous appeal of a denial of a motion to compel arbitration) with Britton v. Co-op Banking Group, 916 F.2d 1405 (9th Cir. 1990) (denying a stay of proceedings in the district court during an appeal from a deniаl of a motion to compel arbitration) and In re Salmon Inc. Shareholders’ Derivative Litigation, 68 F.3d 554 (2d Cir. 1995) (refusing to
At least one district court in this Circuit has followed the reasoning of the Seventh Circuit and stayed its proceedings pending an appeal of the denial of a motion to comрel arbitration. See Baron v. Best Buy Co., 79 F. Supp. 2d 1350, 1353 (S.D. Fla. 1999). We too are persuaded by the reasoning of the Seventh Circuit in Bradford-Scott Data Corp., Inc. v. Physician Computer Network, Inc., that, upon the filing of a non-frivolous appeal under
The Supreme Court has explained that “a federal district court and a federal court of apрeals should not attempt to assert jurisdiction over a case simultaneously. The filing of a notice of appeal is an event of jurisdictional significance – it confers jurisdiction on the court of appeals and divests the district court of its control over those aspects of the case involved in the appeal.” Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58, 103 S.Ct. 400, 401 (1982); see also Marrese v. American Academy of Orthopedic Surgeons, 470 U.S. 373, 379, 105 S.Ct. 1327, 1331 (1985), reh‘g denied, 471 U.S. 1062, 105 S.Ct. 2127 (1985). The only aspect of the case involved in an appeal from an order denying a motion to compel arbitration is whether the case should be litigated at all in the district court. The issue of continued litigation in the district court is not collateral to the question presented by an appeal under
Section 16 of the Federal Arbitration Act grants a party the right to file an interlocutory appeal from the denial of a motion to compel arbitration. See
We are unрersuaded by the two reasons articulated by the Ninth Circuit in refusing to stay proceedings in the district court pending appeal under
As explained by the Seventh Circuit, the concern about frivolous appeals is equally applicable to appeals from the denial by a district court of entitlement of a government official to immunity. See id. The defense of sovereign or qualified immunity prоtects government officials not only from having to stand trial, but from having to bear the burdens attendant to litigation, including pretrial discovery. See Mitchell v. Forsyth, 472 U.S. 511, 526, 105 S.Ct. 2806, 2815 (1985) (“The entitlement is an immunity from suit rather than a mere defеnse to liability; and like an absolute immunity, it is effectively lost if a case is erroneously permitted to go to trial.“); Elliott v. Perez, 751 F.2d 1472, 1478 (5th Cir. 1985) (“[S]ubjecting officials to trial, traditional discovery, or both concerning acts for which they are likely immune undercuts the protection from government disruption which official immunity is supposed to afford.“). A district court, therefore, properly stays discovery pending appeal of a denial of immunity. See Goshtasby, 123 F.3d at 428; Apostol, 870 F.2d at 1339; Workman v. Jordan, 958 F.2d 332, 336 (10th Cir. 1992); Summit Medical Assoc., P.C. v. James, 998 F. Supp. 1339, 1342-43 (M.D. Ala. 1998). Then, “[e]ither the court of appeals or the district court may declare that the appeal is frivolous, and if it is the district court may carry on with the case. Otherwise preparаtion for trial must be suspended until the court of appeals renders a decision.” Bradford-Scott Data Corp., 128 F.3d at 506. The arbitrability of a dispute similarly gives the party moving to enforce an arbitration provision a right not to litigate the disрute in a court and bear the associated burdens. Both instances involve the threshold issue of the authority of the district court to entertain the litigation. When a non-frivolous appeal involves the denial of a motion to compel arbitration, it makes little sense for the litigation to continue in the district court while the appeal is pending.
Accordingly, the proper course for obtaining a stay in this context follows. When a litigant files a motion to stay litigation in the district court pending an appeal from the denial of a motion to compel arbitration, the district should stay the litigation so long as the appeal is non-frivolous. If the district court denies the motion to stay, then the appellant may file a motion to stay in this Court. If this Court then determines that the appeal is non-frivolous, then this Court shоuld stay the litigation in the district court pending the appeal of the denial of the motion to compel arbitration.
Following this process, we conclude that this appeal is not frivolous, and