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Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 8, 2011 Decided July 29, 2011

No. 10-7041

ZUCKERMAN SPAEDER, LLP,

APPELLEE

v.

JAMES A. AUFFENBERG, JR.,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 1:09-cv-00906)

David A. Holzworth argued the cause for appellant. With 

him on the briefs was Thomas A. Duckenfield, III.

Francis D. Carter argued the cause for appellee. With 

him on the brief was Douglas R. Miller.

Before: GINSBURG and GARLAND, Circuit Judges, and 

WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge: Zuckerman Spaeder, LLP 

filed this lawsuit against James Auffenberg, Jr. for recovery 

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of unpaid attorneys’ fees. Auffenberg counterclaimed for 

malpractice and later petitioned for arbitration before the 

District of Columbia Attorney/Client Arbitration Board

(ACAB), an arm of the District of Columbia Bar. He also 

moved the district court for a stay pursuant to the Federal 

Arbitration Act (FAA), 9 U.S.C. § 3, the denial of which he 

now appeals. We affirm the order.

I. Background

Zuckerman Spaeder represented Auffenberg in a criminal 

tax fraud case tried in the District Court for the United States 

Virgin Islands. After he had been acquitted Auffenberg

refused to pay Zuckerman’s last two bills, or approximately

$834,000.

Zuckerman sued Auffenberg in the District of Columbia 

Superior Court to recover the fees plus interest. Auffenberg 

removed the case to federal court, answered the complaint, 

and counterclaimed for legal malpractice. In the counterclaim 

he alleged Zuckerman had agreed to cap its fees at $1.5 

million, and the $834,000 it had charged beyond that was 

unreasonable and actionable under Rule 1.5 of the District of 

Columbia Rules of Professional Conduct. 

One month later Auffenberg moved for leave to amend 

his counterclaims to include allegations Zuckerman had 

violated its duties under Rule 1.6 by discussing the dispute 

with third parties, including former co-counsel and a reporter 

for the Blog of the Legal Times. Auffenberg also asked for a 

protective order to prevent Zuckerman from communicating 

with third parties absent Auffenberg’s prior consent. 

Zuckerman then filed an amended complaint seeking 

relief quantum meruit. Auffenberg in turn amended his 

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answer and counterclaim, again alleging violations of both 

Rule 1.5 and Rule 1.6. Zuckerman moved for various reasons 

to strike or in the alternative to dismiss the amended 

counterclaims. A hearing before the district court was 

scheduled for October 28, 2009.

Two weeks before the scheduled hearing the parties filed 

a joint statement pursuant to the district court’s standing order 

that litigants meet to discuss the possibility of settlement and 

the usefulness if any of alternative dispute resolution.

Although they acknowledged “the prospects of settlement are 

unclear at this time” and the usefulness of mediation 

“uncertain,” they requested a “rather early mediation session” 

before a Magistrate Judge. They also submitted a proposed 

schedule culminating in a trial to take place in January 2011. 

At the October 28 hearing, the district court agreed to

refer the case to mediation for two months only. The court 

also directed the parties to negotiate a protective order 

allowing Zuckerman to contact its former co-counsel, denied 

without prejudice Zuckerman’s motion to dismiss, and 

ordered Auffenberg within two weeks to amend his 

counterclaims so as to cure any defects. 

The parties appeared before a Magistrate Judge for a 

single day of mediation in December 2009. Little came of the 

talks other than the magistrate’s suggestion the parties submit 

their claims to binding arbitration before either a Magistrate 

Judge or the ACAB. Although a client may invoke 

mandatory arbitration of any fee dispute under D.C. Bar Rule 

XIII, both attorney and client must agree to arbitrate a

malpractice claim before the ACAB.

Auffenberg claims to have engaged in a “long back and 

forth” with Zuckerman in the hope of obtaining the firm’s

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consent to arbitration before the ACAB. In any event, on 

January 29, 2010, he filed a unilateral petition with the ACAB

and that same day moved the district court for a stay of the 

proceedings. His petition to the ACAB covered both the fee 

dispute and his malpractice claims. 

The district court denied Auffenberg’s request for a stay

on the ground that he had waived his right to seek arbitration 

of the dispute. The court concluded Auffenberg, by 

petitioning the ACAB, was trying to “get a second bite” at 

alternative dispute resolution after mediation had failed. Even 

if Auffenberg had not engaged substantially with Zuckerman 

on the merits, he had answered the complaint and moved the 

case from state to federal court, and from the court to 

mediation, all before filing his petition or even indicating he 

intended to arbitrate his claims before the ACAB. His 

“participation” in the courts and in mediation precluded 

Auffenberg from obtaining a stay to try his luck in yet another

forum, that is, the ACAB.

Auffenberg immediately appealed the district court’s 

order pursuant to § 16 of the FAA, 9 U.S.C. 16(a)(1)(A) (“An 

appeal may be taken from ... an order ... refusing a stay of any 

action under section 3 of this title”); see Arthur Andersen LLP 

v. Carlisle, 129 S. Ct. 1896, 1900 (2009).

II. Analysis

Under the FAA a litigant is entitled to a stay pending 

arbitration so long as the suit in which he is a party is 

“referable to arbitration” under a valid agreement and he “is 

not in default in proceeding with such arbitration.” 9 U.S.C. § 

3. We have held a party who has actively participated in 

litigation or otherwise acted in a manner inconsistent with an 

intent to arbitrate is “necessarily ‘in default,’” within the 

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meaning of this provision. Cornell & Co. v. Barber & Ross 

Co., 360 F.2d 512, 513 (D.C. Cir. 1966).

On appeal, Zuckerman does not dispute the claims in this 

case are “referable to arbitration” before the ACAB, nor do 

the parties disagree about the relevant history of this 

litigation.

*

In our caselaw, from Cornell & Co. in 1966 through

Khan in 2008, we have always referred to the question of 

default exclusively in terms of waiver. 360 F.3d at 513; 521 

F.3d at 425. Waiver refers to a party’s “intentional 

relinquishment or abandonment of a known right,” United 

States v. Olano, 507 U.S. 725, 733 (1993). In our prior cases, 

therefore, we have examined the record to determine whether 

the party seeking a stay has acted in a manner “inconsistent 

with any intent to assert its right to arbitrate.” Nat’l Cancer 

Research Found. v. A.G. Edwards & Sons, Inc., 821 F.2d 772, 

775 (1987). In conducting this inherently fact-bound analysis, 

we have taken account of the “totality of the circumstances,” 

including any potential prejudice to the non-moving party. Id. 

at 774, 777. Consequently, we have established few brightline rules in this area. 

Therefore, the only issue before us is whether 

Auffenberg is “in default” of his right to arbitrate, a question 

of law we address de novo. Khan v. Parsons Global Servs. 

Ltd., 521 F.3d 421, 425 (D.C. Cir. 2008). 

In Khan we held “irrespective of other indicators of 

involvement in litigation, filing a motion for summary 

 * The parties dispute the occurrence and import of certain extrarecord discussions described by Auffenberg’s counsel at a hearing 

in the district court on March 16, 2010. Auffenberg’s unsupported 

allegations he sought arbitration “early and often” are unpersuasive 

and irrelevant in any event, see infra at 7. 

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judgment ... is inconsistent with preserving the right to 

compel arbitration.” 521 F.3d at 428. Prejudice to the party 

opposing a stay, which may be treated as a function of the 

litigation conduct of the party seeking the stay, is “a relevant 

factor” in our analysis. See, e.g., Cancer Research, 821 F.2d 

at 777 (holding party’s motion for summary judgment had 

prejudiced non-moving party, which was “forced to litigate 

the substantive issues in the case”). We have only once 

addressed the question of “waiver” in a case where the party 

seeking a stay had not moved for summary judgment, and 

there we did not purport to prescribe a standard for general 

application. See Cornell & Co., 360 F.2d at 513 (affirming 

denial of stay where movant had sought to transfer venue, 

answered the complaint, filed a counterclaim, taken a 

deposition, and obtained discovery because “[t]he litigation 

machinery had been substantially invoked”).

Our reluctance thus far to define the standard further has 

imposed a cost upon both litigants and the district court. The 

waste of resources occasioned by this lawsuit, for one, might 

have been avoided had we been more clear about the standard

we would have the district court apply. This is our effort to 

fill that gap. 

First, to be technically correct as well as clear, we note 

forfeiture, not waiver, is the appropriate standard for 

evaluating a late-filed motion under Section 3 of the FAA.

Forfeiture is the “failure to make a timely assertion of a right” 

and, unlike waiver, entails no element of intent. Olano, 507 

U.S. at 733. A party who fails timely to invoke his right to 

arbitrate is “necessarily ‘in default’” when he later attempts to 

proceed with arbitration under Section 3. See Cornell & Co.,

360 F.2d at 513-14 (emphasizing congressional intent to 

prevent “dilatoriness and delay”); see also Moses H. Cone 

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Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 (1983) 

(identifying both waiver and delay as “defense[s] to 

arbitrability” under the FAA, 9 U.S.C. § 2).

Second, to clarify what we mean by “timely,” we expand 

upon the suggestion of the district court: A defendant seeking 

a stay pending arbitration under Section 3 who has not 

invoked the right to arbitrate on the record at the first 

available opportunity, typically in filing his first responsive 

pleading or motion to dismiss, has presumptively forfeited 

that right. See Fed. R. Civ. P. 8(c) (enumerating affirmative 

defenses defendant must raise in answer or else forfeit). A 

defendant who delays seeking a stay pending arbitration until 

after his first available opportunity might still prevail on a

later stay motion provided his delay did not prejudice his 

opponent or the court. See Cancer Research, 821 F.2d at 776 

(considering but rejecting defendant’s argument that 

intervening decision by Supreme Court excused its earlier 

failure to invoke arbitration); cf. FEC v. Legi-Tech, Inc., 75 

F.3d 704 (D.C. Cir. 1996) (district court did not abuse 

discretion permitting defendant to amend answer to include 

separation-of-powers defense after intervening decision of 

court of appeals where there was no prejudice to the FEC).

In this appeal, we affirm the district court’s denial of the 

stay because Auffenberg failed to make a timely assertion of 

his right to arbitrate, and his litigation activity after he filed 

his initial answer and counterclaim imposed substantial costs 

upon Zuckerman and the district court. That Auffenberg 

failed to invoke arbitration in (or before filing) his original 

answer is undisputed. Assuming for the sake of his argument 

that Auffenberg “told Zuckerman early and often” of his 

intention to arbitrate, that representation is nowhere 

documented in the record. In his pre-trial huffery and puffery 

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a party may float all sorts of intentions, serious or not; a court

considering a question of forfeiture is properly concerned 

only with intentions placed upon the record.

For similar reasons we reject Auffenberg’s belated 

attempt to distinguish his “arbitrable” claim regarding fees, 

which he says he did not attempt to litigate, from his “nonarbitrable” claim regarding third-party communications, 

which he says was the only subject to which his litigation 

conduct after filing his answer was addressed. See Cancer 

Research, 821 F.2d at 775 (conduct of discovery pertaining 

only to non-arbitrable claims would not by itself indicate 

forfeiture of right to arbitration of arbitrable claims). Nothing 

in Auffenberg’s filings prior to his motion to stay indicated to 

Zuckerman or to the district court that Auffenberg was 

pursuing in the court only his malpractice claims, or that he 

was asking the district court to stay only the fee dispute 

pending arbitration. On the contrary, Auffenberg petitioned

the ACAB to arbitrate the malpractice claims he now calls 

“non-arbitrable.” Auffenberg therefore has forfeited any 

argument that he litigated only his non-arbitrable claims.

Auffenberg might have overcome the presumption of 

having forfeit his right to a stay had his conduct in litigation 

after the first responsive pleading imposed no or little cost 

upon opposing counsel and the courts. In this vein, 

Auffenberg argues he made only “reactive defensive efforts” 

that could not have prejudiced Zuckerman. Auffenberg’s 

participation in discovery and mediation, however, combined 

with his months-long delay before petitioning the ACAB, 

unquestionably prejudiced Zuckerman, which reasonably 

enough had commenced an internal investigation, responded 

to and filed discovery requests, and begun preparing for 

depositions, all of which activity related to Auffenberg’s 

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arbitrable as well as non-arbitrable claims. Auffenberg’s 

filings, including the repeated amendment of his answer and 

counterclaims to cure the defects Zuckerman identified, also

drew upon inherently limited judicial resources, including the 

time of both the district court and the Magistrate Judge. 

Although delay alone “rarely” constitutes prejudice, 

Cancer Research, 821 F.2d at 777, Auffenberg’s purportedly 

“reactive” litigation activity induced Zuckerman and the 

district court to expend time and effort on disputes, the 

resolution of which would not equally advance the future 

resolution of Auffenberg’s claims in arbitration. These costs 

would have been avoided had he filed his petition to arbitrate 

and corresponding motion for a stay eight months earlier, 

when he first answered the complaint and filed his notice of 

removal. A rebuttable presumption of forfeiture will realign 

litigants’ incentives consistent with the FAA, with benefits in 

the form of savings inuring to all.

III. Conclusion

By this opinion we alert the bar in this Circuit that failure 

to invoke arbitration at the first available opportunity will 

presumptively extinguish a client’s ability later to opt for

arbitration. Accordingly, the order of the district court is

Affirmed.

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