Eliminating Stays?

In sharp contrast to the Supreme Court of United States, which recently ruled that an appeal upon the denial of a motion to compel arbitration mandated an automatic stay of the case at the trial level (click here for my post about this), California has now legislated that such appeals do not stay the underlying case. 

 Earlier this month, California Governor Gavin Newsom signed Senate Bill 365 into law, to take effect on January 1st.  This new law specifically provides that, in cases where there is an order dismissing or denying a petition to compel arbitration, the perfecting of an appeal thereon “shall not automatically stay any proceedings in the trial court during the pendency of the appeal.”

 While, certainly, there seems to be nothing that would prohibit a trial court from voluntarily staying the proceedings while the appeal works its way through the higher courts, the trial court will not be required to stay the case.  In other words, the parties can expect to be litigating on two fronts: the case in chief and the arbitrability issue.

 Does this create a conflict between SCOTUS and California?  Probably not because of the difference between federal law and state law.  But, it can be a trap for the unaware.