MoneyGram Payment Systems, Inc., Respondent, v. Citigroup, Inc., et al., Appellants. (2012)

ORDER

BASED ON THE FILE, RECORD, AND PROCEEDINGS, AND FOR THE FOLLOWING REASONS:

This is an appeal from an order denying a motion to compel arbitration. See Minn. Stat. §§ 572.26, subd. 1(1), 572B.28(a)(1) (2010). The parties are awaiting the delivery of a transcript, and briefing has not yet begun.

Taking an appeal does not stay enforcement of the district court's decision, unless a stay is granted in accordance with the appellate rules. Minn. R. Civ. App. P. 108.01, subd. 1. However, the district court lacks authority to proceed with matters that may affect the decision that is the subject of the appeal, “although the trial court retains jurisdiction as to matters independent of, supplemental to, or collateral to the order or judgment appealed from.” Minn. R. Civ. App. P. 108.01, subd. 2. Whether the district court has continuing jurisdiction after an appeal has been taken is a question of jurisdiction, and not discretion. See Spaeth v. City of Plymouth, 344 N.W.2d 815, 824 (Minn. 1984). And whether the district court has continuing jurisdiction over a matter properly characterized as “collateral” is a question of law, to be decided de novo. Kellar v. Von Holtum, 605 N.W.2d 696, 700 (Minn. 2000).

Our supreme court has recognized that interlocutory appellate review is appropriate in some circumstances, so that defendants are not compelled “to take on the burden of litigation that” they may be determined, on appeal, to have had “a legal right to avoid.” Janssen v. Best & Flanagan, LLP, 704 N.W.2d 759, 763 (Minn. 2005). This rationale is similar to that adopted by a majority of the federal circuits, who have concluded that an appeal on whether to compel arbitration automatically divests the district court of jurisdiction to proceed, even with discovery, until after the appellate court has determined whether the litigation will proceed in the district court. See Levin v. Alms & Assocs., Inc., 634 F.3rd 260, 263-64 (4th Cir. 2011) (collecting cases). And our supreme court has explained that the purpose of the rule divesting the district court of jurisdiction is to avoid “having the same issues before two courts at the same time.” Spaeth, 344 N.W.2d at 825. The issue of whether the underlying litigation will go forward in the district court is precisely the issue decided by the district court and now being considered on appeal. Accordingly, we conclude that the district court is divested of jurisdiction to proceed with discovery during the pendency of this appeal.

We note that there has been no particularized showing that limited discovery is necessary to preserve evidence that might otherwise be lost. Accordingly, we express no opinion on circumstances not here presented. But we note that parties seeking relief in the district court during the pendency of an appeal may, under certain circumstances, seek leave of the appellate court. See Minn. R. Civ. P. 60.01 (addressing the correction of mistakes during the pendency of an appeal).

IT IS HEREBY ORDERED:

1. Appellants' motion for a stay of proceedings in the district court pending resolution of this appeal is granted.

2. Appellants' brief on the merits shall be served and filed within 30 days after delivery of the transcript.

3. Counsel are reminded of their obligation to provide ongoing notice of potential scheduling conflicts to be considered when setting oral arguments in this matter.

BY THE COURT

John R. Rodenberg Presiding Judge