Arbitration, Class Action, Waiver: Defendant Who Decides Not To Arbitrate Against Named Plaintiff Waives Right To Compel Arbitration Against Absent Class Members

Unreasonable Delay Supported Trial Court's Finding Of Prejudice, Resulting In Waiver Of Right To Arbitrate.

        Sprunk, et al. v. Prisma LLC, B268755 (2/1  8/23/17) (Lui, Chaney, Johnson) holds that, under the circumstances, defendant Prisma LLC aka "Plan B", an employer of exotic dancers, waived its right to seek arbitration "by filing and then withdrawing a motion to compel arbitration against the named plaintiff, Maria Elena Sprunk, and then waiting until after a class had been certified to seek arbitration against class members."  (See BONUS below).

        This is interesting from the class action standpoint, because Plan B could not have compelled the absent class members to arbitrate prior to certification.  Nevertheless, the Court allowed the trial court to consider the fact of unreasonable delay in seeking adjudication of the right to arbitrate with the named plaintiff, in ruling on the issue of waiver.  Here, after withdrawing a motion to compel arbitration, the defendant waited years to bring a motion to compel arbitration.

        During a four-year delay, plaintiffs conducted class-related discovery and prepared and argued a class certification motion.  The Court believed none of this would have been necessary if defendant had sought early adjudication of the right to arbitrate.  Weighing heavily in the Court's opinion was that Plan B delayed filing its motions to compel arbitration so it could obtain a strategic advantage, for Plan B believed that had it moved to compel arbitration earlier, it might have been directed to arbitrate with the class.  "An attempt to gain a strategic advantage through litigation in court before seeking to compel arbitration," explained Justice Lui, "is a paradigm of conduct that is inconsistent with the right to arbitrate."  

        BONUS.  Click here to read the Wikipedia article on "Balk".  Wikipedia cites an example of a famous balk:  "A famous balk came in the first All-Star Game of 1961, when strong winds at Candlestick Park caused pitcher Stu Miller to sway erratically and be called for a balk. This story is often exaggerated in re-tellings of baseball lore, some having Miller being blown off the pitching mound."