The US Supreme Court ruled that third parties and non-signatories to an arbitration agreement can appeal under the Federal Arbitration Act (FAA) when a motion to compel arbitration is denied. The majority opinion authored by Justice Scalia found that the language in the FAA referring to agreements allows any party moving for arbitration to appeal a stay of litigation, regardless of signatory status. However, the dissenting opinion of Justices Souter, Roberts, and Stevens argued that limiting interlocutory appeals has been a longstanding congressional policy and such appeals are an extraordinary interruption to normal litigation processes. Ultimately, the Court determined that any movant can appeal the loss of a motion to compel arbitration under the FAA.

1. US Supreme Court: Third Parties and Non-Parties to Arbitration Agreement Can
Appeal Under FAA
For SCOTUS watchers, when Scalia and Ginsburg agree on something, its probably rock
solid. But then again, when CJ Roberts and Souter both dissent...
We're going to give the nod to the Scalia-authored majority in Arthur Andersen LLP v.
Wayne Carlisle et al., the third arbitration-related opinion out of the U.S. Supreme Court
this term. Each opinion has been pro-arbitration.
The question was whether non-signatories to an arbitration agreement could appeal, under
the FAA, the denial of a Motion to Compel Arbitration/Motion to Stay Litigation. The
federal courts had been split on the issue. Of note, the Eleventh (11th) Circuit had
previously ruled in Becker v. Davis and Falcon Financial that non-parties did have standing
to appeal. So that remains good law.
So let's take a look at the three provisions of the Federal Arbitration Act: Section 2 holds
that written arbitration agreements are valid but for grounds under state law. Section 3
holds that a lawsuit should be stayed pending arbitration quot;under an agreement in writing.quot;
Section 16 says the movant may take an interlocutory appeal from an quot;order... refusing a
stay of action.quot;
The majority focuses on the quot;under an agreementquot; language to hold that any party moving
for arbitration is entitled to a stay of litigation, regardless of whether the movant is a
signatory or not.
Justice Scalia wrote that the jurisdiction over thee appeal must be focused upon the
category of the order, not the strength of the grounds for reversal. Moreover, determining
whether an appeal can be taken under Section 3 is quot;immeasurably more simple and less
factboundquot; if any movant, signatory or not, can appeal. He points out that requiring only
signatories to appeal would muddy the waters in cases where the agreement isn't signed.
The Souter/Roberts/Stevens dissent suggested that the quot;longstanding congressional policy
limiting interlocutory appealsquot; should carry the day, finding that intermediate appeals were
quot;extraordinary interruptions to the normal process of litigation.quot; They found that third party
beneficiary status to enforce a contract is quot;a weak premisequot; to allow an appeal. Procedure
over substantive rights. The dissent likewise grasped for the same concept as the majority:
they claimed that quot;signatory? yes-noquot; was the appropriate bright line rule.
In short, any movant can appeal the loss of a motion to compel arbitration under the FAA,
regardless of signatory status.
By the way, in the event you want a list of quot;traditionalquot; state contract law grounds for non-
signatories to appeal, this Opinion offered: assumption, piercing the corporate veil, alter
ego, incorporation by reference, third party beneficiary, waiver, and estoppel.