Seventh Circuit Dismisses Appeal Regarding Arbitration for Lack of Jurisdiction

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Sherwood v. Marquette Transp. Co., LLC

(7th Cir. (Ill.) Nov. 23, 2009)


The Seventh Circuit recently dismissed an employer’s appeal to overturn a district court’s decision refusing to stay an employee’s pending litigation in favor of arbitration. Bluegrass Marine, whose vessels ply the Mississippi River, was sued by an employee injured while working as a deckhand. Bluegrass asked the district court to stay the suit, arguing that the employment contract between the parties required that all disputes be arbitrated under the Illinois Arbitration Act. The district court denied Bluegrass’s motion to stay, holding that the Federal Arbitration Act preempts any state law that concerns arbitration.

Bluegrass appealed, relying on § 16(a)(1)(A) of the Federal Arbitration Act, which authorizes interlocutory review of any order “refusing a stay of any action under section 3 of this title.” The Seventh Circuit held that Bluegrass could not rely on § 16 because that section does not apply when state rather than federal law is the source of the obligation to arbitrate. The Seventh Circuit also rejected Bluegrass’s attempt to rely on the collateral-order doctrine, noting that a district court’s refusal to stay, dismiss, or transfer a case under a forum-selection clause is not appealable as a collateral order because the issue can be appealed from the final decision. Finally, the Seventh Circuit found that the district court’s order was not appealable under 28 U.S.C. § 1292 as the denial of an injunction. In this regard, the Seventh Circuit noted that the pending suit sought damages, not an injunction. The court further opined that the expense of litigation is not “irreparable injury.” As a result, the Seventh Circuit dismissed Bluegrass’s appeal for lack of jurisdiction.


For a copy of the decision click here


Carrie Appler and Richard Cohen