Whether the case was moot; Whether the district court should have stayed or dismissed this case to allow the remaining claims to be arbitrated under the Federal Arbitration Act (the FAA); 9 USC § 3

[This appeal was from the ED-MI.] Holding that the district court should have stayed this case and sent the remaining claims to arbitration rather than dismissing it without prejudice, the court reversed. In this protracted business litigation, the district court ruled that the remaining claims should be sent to arbitration. But instead of staying the case during the arbitration, it dismissed it without prejudice. Plaintiff-Arabian Motors argued that the district court erred by ruling that the remaining claims belonged in arbitration. Defendant-Ford Motor cross-appealed, maintaining that the district court should have stayed the case rather than dismissing it. After determining that the case was not moot, the court held that the district court “should have granted Ford’s request for a stay.” It found that the FAA supported granting the stay – the “command that a district court ‘shall on application of one of the parties stay the trial of the action’ conveys a mandatory obligation.” By staying the case, the district court retains jurisdiction. On the other hand, dismissing the case required the filing of a new action, which could be in front of a new judge. The court noted that “Congress told district courts to grant a stay when a party moves for one in this context and did so in a way that admits of few, if any, exceptions.” Thus, it reversed the dismissal, granted the stay, and allowed the dispute to go to arbitration.