Litigating whether to arbitrate

There's an old joke that litigators love arbitration because they get three chances to litigate: (1) litigating whether to arbitrate, (2) the arbitration itself, and (3) litigating whether the arbitrator's decision is enforceable.

Here's a sad tale of litigating whether to arbitrate that's been going on since 2010. Two interstate truckers (collectively “Van Dusen”) entered into contracts with Swift Transportation Co that called them "independent contractors" and also contained an arbitration clause. After Van Dusen sued claiming violation of some federal and state employment laws, Swift moved to compel arbitration.

Van Dusen argued that the district court couldn't compel arbitration because the Federal Arbitration Act didn't apply due to the exclusion of  “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” in 9 U.S.C. § 1. The district court granted Swift’s motion to compel arbitration, and also determined that an arbitrator should decide whether the § 1 exemption applies to the parties’ agreement. Van Dusen petitioned the 9th Circuit for a writ of mandamus, which was denied in In re Van Dusen, 654 F.3d 838 (9th Cir 2011) (“Van Dusen I”). Then the district court stood its ground but certified an interlocutory appeal. In Van Dusen II the 9th Circuit said it was for the district court – not an arbitrator – to decide the § 1 issue. Van Dusen v. Swift Transp. Co., 544 F. App’x 724 (9th Cir. 2013).

The district court then scheduled the case for discovery and trial, but Swift moved for an order to stay proceedings, including discovery, and for an order setting a briefing schedule to determine the § 1 issue without resort to discovery and trial. The district court denied Swift’s motion, and also concluded that the order was not immediately appealable. Swift then filed an interlocutory appeal, and again petitioned the 9th Circuit for a writ of mandamus.

All of that resulted in two decisions by the 9th Circuit, both favorable to Van Dusen, who is opposing arbitration. Van Dusen v. Swift Transportation (9th Cir 07/26/2016) held that the Federal Arbitration Act did not grant it jurisdiction to hear the appeal. The district court’s order was not final and was not subject to review under the collateral order doctrine. In Re Swift Transportation (9th Cir 07/26/2016) (2-1 vote) denied the writ of mandamus because the district court's order was not clearly erroneous and because the defendants had a remedy in urging their position before the district court in dispositive motions and in the form of direct appeal following the issuance of a final order.

The suit began in December 2009, Swift's initial motion to compel arbitration was in May 2010. And the district court still hasn't decided whether or not this case will be arbitrated or litigated.