Stewart v. Acer Inc.
- Vince Chhabria
- 3:22-cv-04684
- U.S. District Court · Northern District of California
- 2
In Stewart v. Acer Inc., Judge Chhabria stayed the case pending arbitration unless Acer waived a limitations defense.
Stephen Stewart and Acer Inc., because the court case was stayed while the arbitrator considered whether the dispute belonged in arbitration.
What happened
In Stewart v. Acer Inc., the court had already ordered the parties to arbitrate their dispute and then considered whether to stay or dismiss the court case while arbitration proceeded.
The court preferred dismissal because it believed the case could otherwise add unnecessary work to the court’s docket. But the court also wanted to avoid any possible statute-of-limitations problem if an arbitrator later decided that the dispute did not belong in arbitration.
Judge Chhabria ordered the case stayed unless Acer filed, within seven days, a waiver of any limitations defense based on the time spent in arbitration. If Acer did not waive that defense, the parties must notify the court within seven days after the arbitrator decides whether the dispute is subject to arbitration.
The detailed version
- Stewart v. Acer Inc. · No. 3:22-cv-04684
- Vince Chhabria
- Feb. 1, 2023
Background
The court had previously granted Acer’s motion to compel arbitration. This order addressed whether the court case should be stayed or dismissed while the arbitration proceeded. The opinion states that the arbitrator would decide whether the dispute was subject to arbitration.
Reasoning
The court explained that it had discretion to stay or dismiss a case after compelling arbitration. Some courts had favored a stay when the arbitrator would decide whether the dispute was arbitrable, partly because of concern that the statute of limitations—the deadline for bringing a claim—might run while the dispute was before the arbitrator.
The court questioned whether that concern was well-founded. It noted that statutes of limitations are often paused while parties pursue arbitration and reasoned that a timely filed lawsuit should not disadvantage a plaintiff if an arbitrator later decides that the dispute belongs in court. The court therefore preferred to dismiss the case to avoid unnecessary docket work.
Order
The court ordered that the case be stayed unless Acer filed, within seven days of the order, a waiver of any statute-of-limitations defense based on the period during which the dispute was before the arbitrator. If Acer did not file that waiver, the parties were ordered to inform the court within seven days after the arbitrator decided whether the dispute was subject to arbitration. If the arbitrator concluded that the dispute was subject to arbitration, Acer was directed to submit a proposed dismissal order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.