Defendant Consistently Asserted Right To Arbitrate And Litigation Conduct Was De Minimis.
The Supreme Court case Morgan v. Sundance, Inc. (2022) has made it easier to argue that a party has waived its right to arbitrate for two reasons: first, while the party resisting arbitration bears the burden of establishing a waiver of the right to arbitrate, it no longer bears a "heavy burden." Second, the party resisting arbitration no longer needs to show that it will be prejudiced if the court were to order arbitration. Despite the greater ease with which a waiver of the right to arbitrate has been waived, the Ninth Circuit agreed with the trial court that defendant had not waived its right to arbitrate. Teresa Armstrong v. Michaels Stores, Inc., 21-15397 (9th Cir. 2/13/23) (McKeown, Fletcher, Bennett).
Waiver of the right to arbitrate cases tend to be pretty fact-specific. The plaintiff in Armstrong filed her complaint against her employer in state court in October 2017. Defendant removed the case to federal court, and an amended complaint was filed. Some small amount of discovery was conducted. The Epic Systems case was decided by the Supreme Court in 2018, holding that an agreement requiring individual arbitration was enforceable and did not violate the National Labor Relations Act of 1935 provision allowing employees to engage in collective action. After Epic Systems was decided, Defendant moved to compel arbitration in 2018. Under those circumstances, the panel held that Michaels Stores had not waived its right to arbitrate.
We posted about the Morgan v. Sundance decision on 5/24/22. We have also written two articles in the Daily Journal about waiver of the right to arbitrate and the discrepancy between federal law, which no longer requires a showing of prejudice to prove waiver, and California state law.
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