Appellate Jurisdiction Not Affected by Retention of Sanctions Issue

Article excerpt

EMPLOYMENT

The 11th Circuit held, inter alia, that the district court's retaining of jurisdiction to hear a § 11 sanctions motion after compelling arbitration and dismissing the case on the merits does not deprive the appeals court of jurisdiction to hear the appeal.

In this employment case in federal court in Georgia, the district court denied the plaintiffs' motion for discovery and enforced the arbitration clause after severing an illegal provision that would have deprived the plaintiff of her right to file statutory claims against her employer under two federal statutes-the Fair Credit Reporting Act and the Fair Labor Standards Act. The district court compelled arbitration and dismissed the complaint, but it retained jurisdiction over a motion for sanctions under Rule 11 of the Federal Rules of Civil Procedure (FRCP). The plaintiff appealed, raising three issues: Was the order compelling arbitration and dismissing the complaint appealable? Did the illegal provision make the entire arbitration clause unenforceable? and Did the district court abuse its discretion in denying the plaintiff's discovery motion.

On de novo review of the order compelling arbitration, the 11th Circuit first addressed its jurisdiction to hear the appeal. In a decision of first impression in that circuit, the court held that the order was a final, appealable decision under Rule 16(a)(3) of the Federal Arbitration Act (FAA). The retention of jurisdiction over the sanctions motion did not change that result. …