Todd Sink v. Aden Enterprises, Inc., a California Corporation and Michael Luther

We consider whether the Federal Arbitration Act requires a district court to stay an action and order arbitration when the party seeking to compel arbitration has previously defaulted in proceeding with ar- . bitration.

I

On May 25, 2000, appellee Todd Sink (“Sink”) sued appellants Aden Enterprises and Michael Luther (collectively, “Aden”) in the United States District Court for the District of Oregon, alleging that Aden breached Sink’s employment agreement by not providing payments and stock options due Sink. Because of an arbitration clause in Sink’s employment agreement, the district court on March 19, 2001, stayed Sink’s action and referred the matter to arbitration. The parties entered into a written contract to arbitrate with United States Arbitration & Mediation of Oregon (“USA & M”) and scheduled arbitration for August 20-21, 2001.

Sink, Aden, and USA & M agreed that the estimated costs of the arbitration were to be pre-paid to USA & M by August 6, 2001, and the parties do not dispute that Aden, the employer, was obligated to pay these costs. This agreement on the timing of and responsibility for payment of arbitration costs was confirmed by USA & M in a letter mailed…