Members of a non-profit electric power association (the “co-op”) sued the co-op for alleged violations of Mississippi Electric Power Association Law § 235 in state court. The co-op removed the case to federal court and moved to compel arbitration based on its bylaws’ arbitration provision. The court initially granted the co-op’s motion to compel arbitration. The members filed a motion for reconsideration. The court then vacated and reversed its earlier order, granted the members’ motion for reconsideration, and denied the motion to compel arbitration. In response, the co-op filed an interlocutory appeal under 9 U.S.C. § 16(a)(1)(B). The appeal remained pending in the Fifth Circuit. While the appeal was pending, the co-op moved, in district court, to stay the proceedings, but the district court deferred consideration of the motion. The co-op then filed a motion to dismiss the members’ complaint on the merits. The court granted the co-op’s motion to dismiss and denied the stay motion as moot. The members then appealed the dismissal order.
In Baria v. Singing River Elec. Coop., No. 20-60744, 2025 WL 1419721, 2025 U.S. App. LEXIS 11948 (5th Cir. May 16, 2025) (unpublished opinion), the Fifth Circuit vacated the district court’s dismissal order. The Fifth Circuit noted that, after the district court entered its dismissal order, several legal developments materially affected the case. The Supreme Court, applying the Griggs principle, held in Coinbase, Inc. v. Bielski, 599 U.S. 736 (2023), that a district court must stay its proceedings while an interlocutory appeal on arbitrability under 9 U.S.C. § 16(a) is pending because the filing of a notice of appeal “divests the district court of its control over those aspects of the case involved in the appeal.” 599 U.S. 736 (2023); Griggs v. Provident Consumer Disc. Co., 459 U.S. 56 (1982). Applying Coinbase and the Griggs principle, the Fifth Circuit found that the filing of the co-op’s interlocutory appeal deprived the district court of jurisdiction over the case, requiring a stay and precluding the district court from ruling on the merits of the motion to dismiss. Although the district court acted consistently with then-existing precedent permitting proceedings to continue during an interlocutory appeal of an order denying arbitration, the Fifth Circuit clarified that the Supreme Court’s subsequent decision in Coinbase applies retroactively to cases still on direct review. Therefore, the court of appeals vacated the district court’s dismissal order.
By Callighan Ard [email protected]
Edited By Kristin Meurer [email protected]
Edited By Hayden Mariott [email protected]