Suarez-Valdez v. Shearson Lehman/American Exp., Inc., SUAREZ-VALDE

• Decision Date: 23 May 1988
• Docket Number: SUAREZ-VALDE,A,No. 87-5712,87-5712
• Citation: 845 F.2d 950
• Parties: Humbertocerus Suarez, S.A., a Panamanian corporation, Plaintiffs-Appellees, v. SHEARSON LEHMAN/AMERICAN EXPRESS, INC., a Delaware corporation, Alejandro Lacayo, Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 950

845 F.2d 950

11 Fed.R.Serv.3d 307

Humberto SUAREZ-VALDEZ, Acerus Suarez, S.A., a Panamanian corporation, Plaintiffs-Appellees, v. SHEARSON LEHMAN/AMERICAN EXPRESS, INC., a Delaware corporation, Alejandro Lacayo, Defendants-Appellants.

No. 87-5712.

United States Court of Appeals Eleventh Circuit.

May 23, 1988.

Curtis Carlson, Fowler, White, Burnett, Hurley, Banick & Strickfoot, P.A., Kathy M. Klock, Miami, Fla., for defendants-appellants.

Katz, Barron, Souitero, Linden & Faust, Robert Grady, Miami, Fla., for plaintiffs-appellees.

Appeal from the United States District Court for the Southern District of Florida.

Before TJOFLAT and HILL, Circuit Judges, and HALL ^*, District Judge.

HILL, Circuit Judge.

Pursuant to Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985) and Shearson/American Exp., Inc. v. McMahon, --- U.S. ----, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987), the defendants moved the district court to stay this action pending the arbitration required by the parties' agreements. While the district court did stay the trial pending arbitration, it did not stay proceedings. The district judge ordered that discovery would proceed under the Federal Rules of Civil Procedure. The defendants appealed the decision to allow discovery proceedings to continue.

The issue defendants present is appealable at this juncture. Properly characterized the appeal stems from a denial of a motion to stay proceedings pending arbitration, and not from an order compelling discovery. A denial of a stay of judicial proceedings pending arbitration is immediately appealable. Dimenstien v. Whiteman, 759 F.2d 1514, 1515 (11th Cir.1985).

The district court erred in refusing to stay discovery. An agreement to arbitrate is an agreement to proceed under arbitration and not under court rules. ¹

The stay entered for arbitration is AFFIRMED. The provision requiring that the parties engage in--and submit to--discovery under the Federal Rules of Civil Procedure is REVERSED and shall be VACATED.

* Honorable Robert H. Hall, U.S. District Judge for the Northern District of Georgia, sitting by designation.

1 We need not decide whether a district court might order discovery to aid in arbitration where the court found some "special need" for the discovery. See Bigge Crane & Rigging Co. v. Docutel Corporation., 371 F.Supp. 240 (E.D.N.Y.1973); Ferro Union Corporation v. SS Ionic Coast, 43 F.R.D. 11 (S.D.Tex.1967). Conceivably such a rule risks...