In "Justices’ Crypto Ruling Could Drag Out Wage and Hour Cases,” (Law360, July 7, 2023) the US Supreme Court held that when a district court denies a defendant’s motion to compel arbitration and the defendant files an appeal, the lower court must stay the case until the circuit court weighs in. The ruling involves consumer protection claims against cryptocurrency exchange Coinbase Inc that the company tried to push into arbitration pursuant to its user agreements.
The repercussions of the high court decision may affect the time it will take to resolve wage and hour cases in which arbitration clauses are an issue as well as the number of new claims brought by workers.
Raphael Janove, a Pollock Cohen LLP partner who represents workers, said the high court's decision means employers that lose a motion to compel arbitration can freeze a case and delay resolution.
"By the time you have a motion to compel arbitration decided, by the time you have an appeal done, we're talking two to three years, probably — at least — from when you filed the lawsuit," he said. "In those two to three years now, you can't even get discovery."
According to Janove, if the justices had allowed the claims to advance in the trial court as an appellate court decides where it should be heard, the parties could use discovery to exchange information that might be used to litigate the case in arbitration or in court. Adding that, "The risk for delay is very substantial … I think it's going to have a chilling effect on bringing good, meritorious claims where there are arbitration claims that are subject to attack."
Deepak Gupta, a Gupta Wessler LLP principal, told Law360 that requiring a stay while a defendant appeals an order denying arbitration takes away trial courts' authority to manage their dockets. Gupta filed an amicus brief in the Supreme Court on behalf of the American Association for Justice, which is a group of plaintiffs' lawyers that used to be known as the Trial Lawyers Association of America.
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