Order Postponing Insurer’s Motion To Stay Pending Arbitration “Incident To An Orderly Process” And Not Appealable

Insurer CNA was involved in a complicated dispute with a claim handling company, Staffing Concepts. Staffing Concepts made claims on the worker compensation policies that it bought from CNA. CNA claimed that Staffing Concepts refused to pay millions of dollars for the deductibles on claims made by its employees.

There was a related dispute between Staffing Concepts and ClaimPlus, a company that serviced claims made by the Staffing Concepts employees. ClaimPlus asserted that Staffing Concepts did not pay the claim handling fee. So ClaimPlus filed an arbitration claim against Staffing Concepts.

Staffing Concepts then moved to transfer CNA’s case from Illinois to Florida. Some of the Staffing Concepts affiliates, also defendants in the case, moved to dismiss the complaint for lack of personal jurisdiction. CNA in turn asked the court to stay the case, and to put the Staffing Concepts’ motions on hold, pending the outcome of the arbitration between ClaimPlus and Staffing Concepts.

The trial court preferred to rule on Staffing Concepts’ motions first. So it struck CNA’s motion to stay, with leave to refile after the motions to dismiss and change venue were ruled on.

CNA appealed under the Federal Arbitration Act, which permits appeals from orders refusing to stay a case in which arbitration has been demanded or denying a petition to order arbitration to proceed. CNA claimed that the postponement of its motion to stay was the equivalent to denying it.

The Seventh Circuit Court of Appeals disagreed with CNA and dismissed the appeal for lack of appellate jurisdiction. The court referred to the postponement of CNA’s motion as a “delay incident to an orderly process.” It was not “ground for appellate jurisdiction unless irreparable damage could be shown. CNA has shown none, and so there is no basis for us to hear its appeal.”

The whole case, Continental Casualty Co. v. Staffing Concepts, Inc., No. 07-2475 (8/6/08), is available by clicking here.