California SB 365 Passes Ending Automatic Stay of Lawsuits Pending Appeals of Motions to Compel Arbitration

Defendants have long been able to put cases against them on ice for months by moving to compel arbitration, losing their motion, and then filing an interlocutory appeal of their loss, which automatically stayed the pending litigation while the appeal is heard. Come January 1, 2024, this will no longer be the law. Under Senate Bill 365, a party appealing an order denying a motion to compel arbitration is no longer entitled to an automatic stay. It will now be within the court’s discretion whether to stay a matter pending arbitration.

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