On August 5, 2015, in Devon Robotics, LLC v. DeViedma, the US Court of Appeals for the Third Circuit held that Section 16 of the Federal Arbitration Act (FAA) does not confer appellate jurisdiction over an order denying a motion for summary judgment (No. 12-3676, (3d Cir. Aug. 5, 2015)).

Devon Robotics filed a lawsuit against Gaspar DeViedma and McKesson Corporation over a failed agreement to distribute robotic medical devices. The agreement contained an arbitration clause. Devon Robotics sued for breach of fiduciary duty, tortious interference with current and prospective contractual relations, defamation and conspiracy. DeViedma filed a motion to dismiss in response, arguing in part that the complaint should be dismissed in favor of arbitration. The district court granted the motion in part, but allowed two of the claims to proceed against DeViedma.

DeViedma later filed a motion for summary judgment on these two remaining claims, arguing once again that they should be arbitrated. The district court denied summary judgment. DeViedma then filed an interlocutory appeal seeking review of the district court's order denying summary judgment on the arbitration issue. In turn, Devon Robotics sought to dismiss the appeal for lack of jurisdiction on various grounds, including that:

The Third Circuit dismissed the appeal. First, the court reiterated the final judgment rule, and noted that the denial of a summary judgment motion is not a final order. However, the court also noted that the FAA provides appellate jurisdiction over certain categories of interlocutory orders, including orders denying an application to compel arbitration. However, looking at the plain language of Section 16 of the FAA, which enumerates the specific types of arbitration-related orders from which an appeal may be taken, and analyzing the structure of the FAA, the court held that the statute provides no support for exercising jurisdiction over an order denying summary judgment.

The court also rejected DeViedma's argument that the order denying summary judgment should be construed as a motion to compel arbitration. In doing so, the Third Circuit looked at other circuits for their approaches in treating denials of other motions as denials of motions to compel arbitration under 9 U.S.C. § 16(a)(1)(C). It rejected the narrow approach of the US Court of Appeals for the DC Circuit (declining to treat a defendant’s motion to dismiss as anything else) and the broad approach of the US Courts of Appeals for the First and Sixth Circuits (treating the denial of motions to dismiss as refusals to enforce arbitration).

Instead, the Third Circuit adopted the functional approach taken in the US Courts of Appeals for the Fourth and Tenth Circuits, holding that:

The Third Circuit cautioned that the court should only engage in a "limited look" beyond the caption of the underlying motion to ensure that a true motion to compel is not overlooked. The court also concluded that, to be appealable under Section 16 of the FAA, a motion must at least request an order compelling arbitration or an order directing that arbitration proceed. Lastly, the court noted that appellate jurisdiction is not precluded where a motion seeks to compel arbitration as an alternative or additional form of relief.

Applying its newly adopted approach, the Third Circuit:

As a result, the court held it lacked jurisdiction under Section 16(a)(1)(C) of the FAA, and dismissed the interlocutory appeal.