case of the day which is vicki for b versus one take knowledge of o as number seventeen the x one zero eight eight three ruled before filing its motion to compel arbitrary one technology substantially invoked the judicial process the district court those committed several legal errors in its analysis of mis for b s prejudice and how much she suffered by the fact that one technologies made the strategic decision to delay for more than a year and charge for approximately a year after the action was transferred to the southern district of texas to seek arbitration globally it just record in considering prejudice as a question of dollars and cents while there rather than as a matter of inherent unfairness as this court has repeatedly instructed in april two thousand and sixteen it was certainly a strategic choice litigate the merits of the case there is no question that this putting aside whether there is a difficulty sometimes deciding between perfunctory motions to dismiss and other motions to dismiss that this could not fairly be described as perfunctory under this court's case law this single overt act seeking a judicial decision on the merits is unknown and there's enough for for the substantial invocation of the judicial process while the district court found that there was a substantial first it held that it could not determine whether miss for he suffered time and expense prejudice now this is important i think because there is a dispute about whether this is a factual question or a legal question but the district court did explicitly say it could not reach a factual determination because there were many affidavits or more detailed evidence submitted this court has repeatedly said though however that no such evidence is required to a sas time expense prejudice this is therefore not reviewed under a clear error stare if the court had looked at the evidence and sad i've looked at this it's not enough that might be a different question but that's not what the district court did here what about the other side saying this was sure you spent time in everyone knows drap  responding to motions is a significant expense but that it was no expense you want to have suffered in the arbitration because the same issues were going to come up anyway well i think that that's not correct one there's oz we said in our reply brief there's no guarantee that you can file a dispositive motion in arbitration at all certainly rule twelve b six is not a creature that exists in arbitration the procedural rules are different whether or not you are surely going to brief at some point i mean to me the key issue and  think this helps you on the first prong but the key issue in this case is whether the website was just was fraudulent julian had misrepresentations or whether it fully disclosed the enrollment situation so i mean that was all going to get briefed at some point after you are and it's going to have to itself prejudicial and in fact this court of petroleum type and more recently in washington has said that having to brief the same issue twice is itself prejudice and it is both time expense prejudice but also substantive prejudice which goes to the heart of the matter not heavy fact case there's going to be eighty depositions i mean it's really a legal question was this website disclosing the enrollment process and the fees that we're going to get charged on the road and on that key issue they tee it up in the twelve b six the district and to this issue that it wasn't an exposure of legal strategy but this court has repeatedly held that there are other forms of substantive prejudice and that the two bites at the apple itself and i believe  prejudice that be near and i think the court also said it's whether it's in the worst legal position and i think this it's better isn't that always going to be the case when you meet prong one because there's a merits decision you're asking the court to decide and then you're only going to trace him because the defendant in the party didn't win that so windows and prejudice would pretty much always follow under that view i think often and petroleum pipe mirrorball fig knowledge that there is an overlap case there actually was no ruling by the court at all yet this court found that there was precious anyway but the court haven't even ruled and there had been no motion even filed so several times there are there are a number of cases where you can take that act you can move to dismiss and the court doesn't reach a decision or you can take other over acts exhibiting the disinclination to arbitrate but there actually hasn't been a decision or any other kind of second bite at the apple but if there is an adverse decision by the party who later invokes arbitration on a merits issue if your position be there's always going to be prejudiced and i believe so your honor they're all there will always be that second bite at the apple prejudice and that's why the courts have consistently said that's almost dispositive on the issue of prejudice period almost a year and i think that and and i just want to be should didn't they offer as a reason for the transfer to a texas court that they wanted the opportunity to pursue you proceed briefly i just want to flag and mark twenty eight a letter in the back and forth we submitted the hampton case decided by this court earlier this summer which explained that one of the overt act in that case was a motion for summary judgment is enough to trigger the decision on the merits of sterile invocation standard and also that the prejudice is obvious in that scenario i did not get into any dollars and cents because the court when the party who bears the burden of proof on an issue does not put in any evidence on that issue doesn't submit any actual proof it can't be clearer for a district court to say you didn't your burden on this issue that's all judge lindsey did and that finding was well supported the appellant urgent that judge lindsey made any conclusions of law in deciding the prejudice issue or made any errors of law is not borne out by the record how can anyone involved in the legal process think that there's no expense involved in drafting rule twelve responses well under a contingent fee agreement as we explained in our brief example are only point is she did not i think the murat case or marion every say it is a good example in that case the lead attorney in the district court put together an affidavit and he said ok we had to oppose five motions here's how many hours we spent on each motion it was over a thousand total and here's the fees we incurred about two hundred sixty six thousand dollars submitted that affidavit to the district court judge means found prejudice on the basis of that evidence was for be i think could have done something similar and said here's the time we spent on this respond to this motion dismiss here's the portion of it we spent in texas as opposed to what we didn't know when oil which everyone agrees doesn't count toward waiver and here's why we're hurt by that maybe it's because we don't think this is going to be useful later in the arbitration although that's a tough argument for her given that she's saying she briefed what she believes is the central issue in the whole case counselor would setting that issue aside without question it's obvious to anyone that responding to the motion at a minimum exposed the legal strategy that would be disk dispute delayed in the exposure of the legal strategy that may be employed why doesn't that constitute prejudice to two results at those points in turn judge bennett there was no exposure strategy there's an express finding from judge lindsay on that point page five fifty one of the record where he said this isn't a case where you had to get in your evidence or tell us your sophisticated legal arguments you cited a few cases you pointed to some facts and your complaint and you said that our authorities were distinguish that by itself does not tip her hand on any high level strategy especially when you can see when we consider the fact that she made the same arguments cited many of the same cases in her brief she filed in illinois judge lindsey also found that that allegation that she had tip her hand was conclusory and i think that out that finding is very well supported because the question that we can't answer on this record is what did she disclose what is it that one technologies knows now that we didn't know before she filed her motion there's no answer that question the record and without a clear answer to that question judge lindsey is finding the contrary is not clearly erroneous on the delay point judge lindsey correctly applied this court's precedent that delay itself is not inherently prejudicial it is the content of the delay matters not its length so what kinds of things is the reason for the delay wholly irrelevant it is just that gray is i believe it's footnote five i am sorry to the walker case where the court says the defendant's motive for moving to compel arbitration is irrelevant waivers an objective inquiry if you have the right to arbitration you can asserted if you don't you can can't but your reasons for doing it and in that case judge king said even if your reason is delay which ours was not even if that is your reason it doesn't matter the way of analysis on the delay front i think the most important set of facts is that there's nothing that happened during that period of delay that caused prejudice couple of examples to well hold on miss for counsel for ms for be said that when the case was transferred from illinois to texas there was a representation made at the reason it was being transfer to texas was to seek or betray ship and that they didn't oppose that so is that correct no motion to  transfer illinois was fired for the express purpose of compelling arbitration correct she did not oppose the request we made for an extension of time to answer the complaint and there was no representation that motion that we were going to compel arbitration we just said we need some time to work on our strategy that was all here's some things that have happened in other cases that have made and so the strategy ends up being let's take our chances in federal court in dallas see if we can get it thrown out right that's about twelve dismissal probably the best thing a client can get in a lawsuit and then lo and behold that it partly worked on one claim but it doesn't work on the big part of the case and you say you get to take the judge's temperature and then you so why isn't that prejudiced the second bite at the apple especially when i understand there's a lot of twelve b six motions that are you know oh it's not specific enough under twamley there's some technical element that was implied but here that it was teeing up the question of was this web site fraudulent that is the issue why isn't being able to take the judge's temperature on that find out you don't like what the temperature is and then go to a second form why isn't that prejudice i think that's the most important intuition that is driving cases like iran that find a waiver for treason and i want to submit that intuition is unfounded here and for a few reasons she's given us kind of three flavors of this second bite at the apple one is that this is the only one she presented to the district court what if i have to relive again the motion to dis she won't we stipulated that we wouldn't file it again and i want to this is a point that's not in our brief that stipulation was probably unnecessary because judge lindsay enter judgment we would be issue precluded from related gating anything i guess i understand so you're not going to is ultimately going to decide really the same question teed up in the rule twelve which is the website fraudulent or legit it is definitely not the same question and here's why in the motion to dismiss on the face of the pleadings we asked just lindsay to rule as a matter of law that no reasonable consumer could possibly be deceived by her website not just on the pleadings are you submitted the website printouts correct which was incorporated into her complaint she described the website we put in picture this one in the same  will ask the arbitrator as a matter of fact to weigh the evidence and find as a matter of fact not as a matter of law that is for me individually was not actually deceived by our website that's a different issue than the one we litigated in front of judge lindsey and we will put in very different evidence we will put in evidence that she understood the nature of the charge that she repeatedly used the credit monitoring services that she signed up for and that she affirmatively ratified decision to pay for those services after she signed up for them initially you're not going to take the position in the arbitration that even if she fought it so that she was going to get all this for free that that wasn't reasonable in light of the disclosures that we could i think present that argument on summary judgment similar to how there is some parallel between a summary of the motion it will be six in federal court still not the same issue to say you know we can spot you every fact in your complaint and you don't say to claim judge lindsey rejected that argument we then can go to summary judgment and say based on the evidence that's been developed in this case there's no finder of fact could conclude based on the evidence that this website was deceptive it is a different issue different procedure a posture different burdens different kinds of evidence and the last point i think the one other issue that you kind of move quickly past the judge koester race as a result of the twelve b six there was in fact a partial dismissal and wide doesn't that constitute prejudice in that the court actually provided relief that you were seeking there is no prejudice to you is for me from losing something she never really had and again this is not a come a complain where we said you haven't pleaded enough facts this is a claim that does not exist under the law it's like she had brought a first amendment claim against us for a section one hundred eighty three claim against a federal officer those claims are so what's the standard how frivolous does it have to be to not count for spectrum if there are gradations of how frivolous is it how meritless is it is pleading based and that kind of determination is committed to the district judge in the first instance judge lindsey found there was no prejudice to her from the loss of that claim and she cannot and has not explained why that finding was if any of our cases said there's no prejudice when the claim is dismissed because it was so weak or you're not based on the law as you say i don't think this court has decided cases as that we cited it i think the district of kansas case that was affirmed by the tenth circuit that was but the same principles apply and i think the reasoning of that case is very well supported that if you're if she's going to go to arbitration and spend a bunch of time pursuing america's claim how is she worse off by not doing that that she didn't appeal the dis a waiver asked a separate question have you invoke the judicial process obviously you did it by getting before the judge the question of whether or not that claim should even proceed secondly what she prejudice obviously she lost something and if you go to the other side of the coalition your client gained something by having that claim removed from the case so the judicial process was in voked and there was a change of status that either benefited a prejudice someone as a result hell is that that's not a classic waiver on its face so i'll answer that question just quickly we certainly don't concede that the judicial process was invoked to speak about that for a few minutes if that's helpful the court the reason she's not present reason judge lindsey found she's not prejudiced by the loss of this claim is that she didn't lose anything it's an illusory claim when there's a binding contract between the parties under illinois law you cannot sue an unjust enrichment that claim was not there for her she did not lose anything she ever really had that was the core of the finding below and that finding is not clear if you'd won everything in front of judge lindsay i know we wouldn't be but would you want to be saying the same thing legend affirmative defense we concede you have a claim but we're going to avoid confessing avoided that's a different analysis ours was more of like a con levy gibson type motion there's no so facts you can prove to win this claim i think there's a difference between that and a twenty million it ball type motion of you just didn't plead enough to do it so those are the kinds of case specific determinations that district judges are best position to make the parties are in front of them they're familiar with the litigation they've seen how they're affected and the finding that she has not challenge on appeal is his finding that her allegations were too for him to find prejudice all she put in the district was a footnote on this and he said i'm sorry that's not enough it would be inconsistent with this court's clear case law to say we're going to flip a district judge based on an unsupported footings and that's why i'm confused because you continually talk about what judge lindsey determine what judge lindsey file but then on the other hand you're saying the judicial process wasn't invoked how can it not be invoked if judge lindsay's making all these findings and determinations that this substantial vacation fishel process filing a purely defensive twelve b six motion has never before been treated as a substantial in the case of the judicial process and the central problem i wanted to put before the court today is well let me ask you the counting the cases where that was sought along with a pending arbitration request what's your best case so i think there are three that i would say in this order to chico is an unpublished case where the defendant filed two twelve the six motions before it we prefer judicial dismissal we are moving to arbitrate as a backup our first choice is judicial resolution and then finally is the key trade case that counsel is discussing where the fact that the motion to compel was filed simultaneously was not necessary to the cour cases about seeking a decision on the merits makes the four cases we just discussed he traded shigo steel warehouse and general guarantee those cases become wrong they're inconsistent with the test she's asking this court to adopt the test that we put forward harmonizers all those cases and says what does this court mean when it says seeking a decision on the merits it means seeking a final decision from a fact finder on issues of disputed fact that's how it was used in the miller brewing case for the first time where the plaintiff in taking a bunch of merits discovery in the petroleum pipe case it was an informal request that this court found it was a request for judgment on a counter claim that the defendant had put forward moron it was an affirmative defense where they pleaded their own facts the same was true in the hampton case earlier this year so if we take that more limited view seeking a decision on the merits there's no inconsistency in this court's cases she has asked this court to adopt a test that every motion that seeks dismissal of prejudice automatically substantially books additional process and then here today she's gone further and said actually you automatically waive because no matter what happens on that motion there's prejudice if we get a claim dismissed or we lost it that's prejudice if the motion is denied you've got to take the judge's temperature that's prejudice so it's a very extreme position that she's asking this court to adopt any motion twelve the sixth automatic waiver that this court has rejected that kind of bright line rule and murat i think it would lead to absurd results motion for dismissal for one of prosecution results in a dismissal with prejudice are we going to say that moving to dismiss from one prosecution is assisting what is  iran does make this had this perfunctory language that's getting from some prior cases and this isn't a the motion you filed wasn't oh you forgot to allege some element or or you know we don't know exactly what you're talking about it's not clear enough i mean  website it was not something that a reasonable person would have misunderstood that's a to me that's a core merits ruling it was a perfunctory motion in the sense that the prize case use the term perfunctory which is where moran took it from that motion to dismiss file before discovery is perfunctory dismissal motions and summary judgment motions after discovery are not so in the original sense of the term this was a perfunctory motion we've explained we are brief while we don't think that's an especially helpful distinction but i think we fit within it as it was originally take for me this is one of the more important cases because i deal at the trial court level with folks who come in who have the right to compel arbitration but then they sit on that right as you call it exploring the trial judge's temperature or that there is a significant delay before they invoke that process so let's go on the latter part how long can you wait before you stand up and say we deserve to go or betray sion and you seek the trial court to do that in this case it's approximately a year so what's the cutoff i think the cutoff depends on how much you do you and not how long you wait so even though there was a year  or the fact that the lay has been used as a description of part of a waiver you're saying that the delay really doesn't matter if nothing's going all the good that think that's right because what this court cases have said is delay matters because it opens up the possibility for things like discovery where you encourage of expense and maybe you learn things about your opponent's case that you would learn an arbitration that's prejudicial in murat that they had moved just a discovery and that prevented the plaintiff from deposing a key witness and that was prejudicial to them those are the delay kind of it's a means to an end it's not prejudicial in and of itself it's certainly relevant to the calculus but here we got the we transferred the case to texas we've asked for a unopposed ministerial extension motion filed a single motion to  the next thing we did was move to compel arbitration in cases where this court has found substantial vacation down prejudice there's a much more extensive course of conduct where you're demanding a jury you're moving to transfer within judicial forms you're participating in discovery wasn't there also a motion to stay discovery that was in illinois and that was for the express purpose of allowing the decision to be a decision on the motion to transfer before we got any that's got we cannot consider the fact that a motion to further your right to arbitrate that's not substantial negations so everything we did no annoyed designed to get the case to texas all of that is not substantially cation on the president's point i wanted to close this with a couple of reminders or just points i want to highlight here today one is that this court has never before reversed a district court's finding of not a lack of prejudice in the waiver of arbitration context and the reason for that is just that it is referenced earlier the district court is closer the parties observes the conduct knows the case a little better and is better situated to make that decision the first instance i'd also like to commend the court to the walker case where this court reversed the district court's finding of prejudice that's clearly erroneous or it's a plaintiff's generalized your honor is one factual clarification there were two motions to disdain to state discovery in this case one in illinois one here in texas the one in texas was filed after the court had ordered a twenty six f conference and they after i'm not hundreds and harbors around the same time and in fact the court held that the only hearing the court held on the motion addressing the issue of waiver was actually on the motion to stay discovery and it was before the motion to compel was brief was an ex motion to this issue of all these other cases being inconsistent i don't think they are as cost i asked in the question which of these cases where there was not a in the alternative motion to problem is it would be a bright line the other way that a twelve b six motion never is substantial invocation of judicial process if you're not produce when you lose a claim and you're not prejudice when you don't lose a claim so if you're not prejudiced of either of those things and you're never prejudice what else could come substantial invocation of the judicial process there will be likely a finding of prejudice i think that's that's understandable and i think there's a reason why this court has never found a case where there's been a substantial invocation of  like this that supports your view on that and judge loses view on that issue i think there's the case it's almost exactly the same as from the eighth circuit the cooper case both issues it was a consumer class action where the denied in part and the prejudice was solely brought about from our court i think the best case in that case is the petroleum pipe case where was actually last night there was no formal motion filed and there was no formal finding the prejudice an indication was  conference and informal discussion before the judge and i think if that's enough and certainly a motion to dismiss with a decision is enough and i think marriage itself also the motions to dismiss there were were even though there were more