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An order declining to enjoin arbitration is not immediately appealable under a general statute permitting appeals of orders refusing injunctions. Instead, under the Federal Arbitration Act (FAA), an appeal cannot be taken until after the arbitration concludes, according to the Eleventh Circuit Court of Appeals.
In ConArt, Inc. v. Hellmuth, Obata + Kassabaum, Inc., NO. 06-16665, 2007 WL 2994001 (11th Cir. Oct. 16, 2007), a dispute arose out of a construction project between contractor Hellmuth and sub-contractor ConArt.
Hellmuth sought to compel certain portions of the dispute to arbitration, alleging that some of the parties' disputed obligations arose out of a contract containing a valid agreement to arbitrate. ConArt sought a declaratory order that those particular claims were non-arbitrable. The trial court declined to enter that order, and ConArt appealed.
The Court found that it had no jurisdiction to hear an appeal of the trial court's refusal to enter a declaratory order, finding the appeal was interlocutory, and therefore impermissible under the Federal Arbitration Act (FAA).
ConArt argued that the appeal was properly before the Court, noting that 28 U.S.C. § 1292(a)(1) authorized interlocutory appeals of orders refusing injunctions. The Court acknowledged that the general rule allowed such appeals, but noted that the FAA specifically forbade such appeals in 9 U.S.C. § 16(b)(4).
The Court resolved the apparent conflict between the provisions by finding the FAA provision to be an "exception" to the general rule allowing such appeals. The Court reasoned that the provisions could "peacefully co-exist" under that reading. It also observed that the FAA provision was enacted later, which evinced an intent that the FAA prohibition on such interlocutory appeals was meant as an exception to the general rule.
Finally, the Court refused to apply the Cohen collateral order doctrine, declining to treat the interlocutory order as final. It stated that one of the requirements to apply the Cohen doctrine was that the order "be effectively unreviewable on appeal from a final judgment." See Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949). Since such an order was reviewable after the conclusion of arbitration, and holding otherwise would allow the judge-made Cohen doctrine to contravene the clear command of Congress, the Court held the doctrine inapplicable.
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