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Ordinarily, courts of appeals have jurisdiction only over "final decisions" of district courts. 28 U.S.C.S. § 1291. The Federal Arbitration Act, however, makes an exception to that finality requirement, providing that an appeal may be taken from an order refusing a stay of any action under 9 U.S.C.S. § 3. 9 U.S.C.S. § 16(a)(1)(A). By that provision's clear and unambiguous terms, any litigant who asks for a stay under § 3 is entitled to an immediate appeal from denial of that motion--regardless of whether the litigant is in fact eligible for a stay.
After consulting with petitioners, respondents Wayne Carlisle, James Bushman, and Gary Strassel used a shelter to minimize taxes from the sale of their company. Limited liability companies created by respondents entered into investment-management agreements with Bricolage Capital, LLC, that provided for arbitration of disputes. After the Internal Revenue Service found the tax shelter illegal, respondents filed a diversity suit against petitioners. Claiming that equitable estoppel required respondents to arbitrate their claims per the agreements with Bricolage, petitioners invoked § 3 of the Federal Arbitration Act (FAA), 9 U.S.C. § 3, which entitled litigants to stay an action that was referable to arbitration under an agreement in writing. The district court denied petitioners’ stay motions. The Sixth Circuit held that it lacked jurisdiction under 9 U.S.C.S. § 16(a)(1)(A) of the FAA over petitioners' interlocutory appeal. The Supreme Court grated certiorari.
The Sixth Circuit's judgment was reversed, and the case was remanded for further proceedings. The Supreme Court held that, under the unambiguous terms of § 16(a)(1)(A), petitioners were entitled to appeal, regardless of whether they were eligible for a stay. The language of § 16(a) made the underlying merits of a stay request irrelevant to the existence of appellate jurisdiction. In any event, the appeal was not meritless, as non-parties to a contract were not categorically barred from relief under § 3. State law was applicable to determine whether arbitration contracts were binding under 9 U.S.C.S. § 2; therefore, petitioners could invoke § 3 if state law allowed them to enforce the investment agreements.