Last month, we described the split among Federal Circuit Courts regarding the question of whether the Federal Arbitration Act (“FAA”), 9 U.S.C. § 3, mandates a stay rather than dismissal of a judicial proceeding after a district court compels arbitration of all of the claims in an action before it ( LINK ). But what is the practical significance of the district court’s retaining jurisdiction? | Among other things, it may thus be able to grant interim relief in order to preserve the status quo pending arbitration. However (no surprise) the Circuit Courts are not unanimous in their holdings in this regard either. The majority of the U.S. Courts of Appeal have held that district courts may grant injunctive relief to preserve the status quo pending arbitration in the absence an express contractual provision permitting it. But the Eighth Circuit has held that granting an injunction under such circumstances is contrary to the spirit of the FAA, see Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Hovey , 726 F.2d 1286, 1291 (8th Cir. 1984), and three other circuits have yet to weigh in on the issue (but acknowledge the jurisprudential divide), see, e.g. , RGI, Inc. v. Tucker & Assocs. , 858 F.2d 227, 229-30 (5th Cir. 1998) (“The crux of the problem is whether the commands of the [FAA] require that a federal court immediately divest itself of any power to act to maintain the status quo once it decides that the case before it is arbitrable.”).

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