### INTHE UNI TED S TATESCOU RT OFAPPEALS FORTHE FIFTH CIRCU IT

N o. 08- 20461

P ET RO L EUM P I P E AMER I CA S C OR P OR AT I ON P l ai n t i f f

- A pp el l ee v. J I NDA L S AW LT D D efen d a n t- A p p ell a n t

A p p ea lf

rom the U n i ted S tates D i stri ct C ou rt f or t h e Sou t h ern D i st ri ctof T exas

B ef ore JO N E S , C h i ef

Ju dg e, an d W IE N E R an d B E N AV ID E S , C i rcui tJu dg es . F O R T U N A T O P

. B E N AV ID E S , C i rcui tJu dg e: Ji n da lSa w , L t d. ( “ Ji n da l ” ) a pp eal s the di st ri ctcou rt ’ s d en i alof i t s m ot i on to s ta y litig a tio n a n d co m p e l a r b itr a tio n . W e a ffir m . I D e fe n d a n t-A p p e lla n t J in d a l i s a m a n u fa c tu r e ro f s te e l p ip e s b a s e d in India. Plai n t i f

f

- A pp el l e e P et rol eu m P i pe A m eri cas C orp. i s a Tex as- based corporat i on w h ose U n i t ed A rab E m i rat es’af f i l i ate, P et rol eu m P i pe M i dd l e E ast ( c ol l ec t i vel y, “ PP A ” ) , be gan purc hasi ng pi pe f r om Ji ndali n t he fal lof 2004. F rom N o v e m b er 2004 un t i lA u gu st200 5, Ji n da laccept ed severalpu rchase United States Court of App eals

Fifth Circuit 

### F I L E D Jul y 9, 2009 Cha rl es R. F ulb ru g e II I Clerk08- 20461

2 orders f rom P P Af

or vari ou s grades of pi pe. Th ese pu rchase orders do n ot contai n arbi t rat i on cl au ses. P P Athen su pp l i ed t h e p i pe t o thir d-part i es, t w o of who m — Gunn Oi l Co

. ( “ Gunn ” ) a nd M a g nu m Pr o d uc i ng , LP ( “ M ag num ” )

— s uf

fe r e d wel lfai l ur e s a l l e ge dl y c aus e d b y de fe c t i ve J i nda lg r ad e P 110 pi pe. PPA not i f i e d Ji nda lt hatP PA had r e ac he d a s e t t l e m e ntw i t h Gunn
a n d M a gn u m con d i ti on ed on Jin d a l ’ s a gr ee m en t to a sep a ra te settl em en t w i th PPA

. J i n d a lr e s p o n d e d fa v o r a b l y t o t h i s o f fe r , a n d , o n J a n u a r y 9 , 2 0 0 6 , t he pa r t i e s r e s o l ve d t he di s put e b y r e ac hi ng a c o m pr e he ns i ve s e t t l e m e nta gr e e m e nt ( “ Set t l em entA gr ee m ent ” ) i n w hi c h Ji ndalw oul d, i nt eral i a, pay PPA $750, 000
as f ul l s e t t l e m e nt o f al lc l ai m s t hatG unn a nd M ag num b r o ugh ta ga i ns tPPA a nd g ive P P Aa $20 0, 000 cr edi ton tw o pen di n g pu rchase orders. The ag r e e m e nt d e fi n e s “F in a n c ia l C la im s ” a s th o s e r a is e d b y P P A a g a in s tJ in d a l in P P A ’s D e c e m be r2 , 2 00 5 c l ai m l e t t e r . I n t ur n, t hatcl ai m l e t t e rde s c r i be s t he G unn a nd M ag num c l ai m s a nd a l s o s pe c i f i c al l y de s c r i be s t he i s s ue s w i t h t he P11 0 pi pe , b ut
w i t h no ot he rpi pe . Li ke w i s e , t he Se t t l e m e ntAgr e e m e nts pe c i f i c al l y m e nt i o ns o n ly P 1 1 0 p ip e . The Se t t l e m e ntAg r e e m e nti nc l ud e s a r e l ea s e p r o v i s i o n i n whi c h PPA contract ed to f

orgo: any c l ai m agai nstt he c l ai m ed rej ec t i on i n [ PP A ’ s] I nt er nal Inspecti on carr i ed ou ton a n y ot h er m ater i alb ou gh tb y [ P P A ] f rom [Ji n d a l ]. T h i s cl a u se relates on l y to th e m a terialrece i ve d u p to 12 th D ecem ber 200 5. P P Ares erves t h e ri gh tt o bri n g cl ai m s f or c l ai m ed rej ect i on i n res pect of m ater i alrec ei ved af t er t h i s date. Addi t i o nal l y, t he pa r t i e s ’ m e e t i ng m i nut e s f r o m t he di s c us s i o ns s ur r o undi ng t he S e tt le m e n t A g r e e m e n t s ta te th a t t h e S e tt le m e n t A g r e e m e n t “fo r m s a s th e fu ll and f i nals et t l em entof

t he cl ai m s on P 110 pro duct s suppl i ed s o fart o [ PP A ] , as o n d a t e . ” T h e p a r t i e s d i s p u t e wh e t h e rt h e r e l e a s e a g r e e me n ta p p l i e s t o c l a i ms08- 20461

3 f o ra l lde fe c t i ve pi pe r e c e i ve d b e f o r e D e c e m be r1 2, 2 00 5, o ro nl y P11 0 pi pe received bef

ore t h at date. Th e Set t l em entA gr ee m enti ncl udes an ar bi t r at i on c l ause w her eby: T h e p a r t i e s a g r e e t o h a v e t h e d i s p u t e i f a n y t o h a v e t h e s a me ar bi t r at e d [ sic ] t h an l i t i gated. A l ldi spu t es ari si n g i n con n ect i on w i t h t h e present contractsh al lb e fi n al l y set t l ed u n der t h e R u l es of C on ci li a tion an d A rbi t rat i on of t h e I n t erna t i on alC h am ber of C om m erce by a S ol e A rbi t rat or . . . . T h e l aw governing the contr act an d the arbi t rat i on procedu re s h all b e E n gl i sh l aw . Th e pl ace of ar bi t r at i o n s hal lb e Lo ndo n. O n M ay 3 0 , 2007, PP As entJi ndala de m and l et t eral l egi ng t hat Ji ndal
s o l d PPA de fe c t i ve L80 and N 80 pi pe . O n t hat s am e da y, PPA f i l e d t he i ns t ant l aw sui ti n T exas st ate c ou rtseeki n g da m ages of $ 2 .46 m i l l i on f

or breach of
c ont r ac t and br eac h of w ar r ant y bas ed on t he al l ege dl y de fec t i ve L80 and N 80 pi pe, bu tnot any P 110 pi pe. P P A h as di scl ai m ed any i n t en t i on t o seek dam ages f orL80 and N 80 pi pe t hat w as i nspec t ed and rej ec t ed be f or e D ec em ber12, 2005. O n Ju l y 9, 200 7, Ji n da lrem oved t h i s c ase t o t h e D i st ri ctC ou rtf or t h e Sou t h ern D i stri ct of

T ex a s. Aw ee k l a ter, Jin d a lf i l ed an a n sw er a n d cou n terclaim

. In it s c o u n t e r c la im , J in d a l a ll e g e s t h a t P P Afa il e d to fu lf il l w h a tJ in d a l v ie w s a s P P A ’s
o b l i g a t i o n s u n d e rt h e S e t t l e m e n tAg r e e m e nt , i nc l udi ng PPA ’ s a l l e ge d a gr e e m e nt to p u rch a se an a d d i ti on a l 6 , 0 0 0 m etric ton s of pipe f rom Jin d a l

. Jind a lass erts f o urc aus e s o f

a c t i o n r e l at e d t o PPA ’ s pe r f o r m anc e und e r the Se t t l e m e nt A gr ee m ent : ( 1) br eac h of t he Sett l em entA gr ee m entand purc hase or der s, ( 2) unjuste nr i c hm e nto rr e s t i t ut i o n f o rt he a m o untJ i nda lpa i d t o PPA und e rt he Se t t l e m e ntAgr e e m e nt , ( 3) pr o m i s s o r y e s t o ppe l , a n d( 4 ) m o ne y had a nd r e c e i ve d. Th e par t i es t hen exc hanged doc um ent s and, at t he di st r i c tc our t ’ s urgi ng, di s c us s e d s e t t l e m e nta nd k e ptt he j udg e upd at e d r e ga r di ng s e t t l e m e nt08- 20461

4 d i scu ssion s. T h e dist ri ct cou rt h eld a series of off-t h e-reco rd con feren ce s in cha m bers over th e n e x tseveralm on t h s. O n N ovem ber 15, 200 7, t h e parti es s ubm i t t e d a j o i nts t at us r e po r ts t at i ng t hata tt he O c t o be r2 9, 2 00 7, s t at us c onfer enc e, t he par t i es had agr ee d “th a t i n t he e ventt hat s et t l em entw as unl i kel y, t hat t hey c oul d narr ow t he i ss ues i n t he c as e t o s eve r aldi sc r et e l egal i ssues requi ri n g rul i n g s fro m the C ou rt
. ” Foll ow i n g an ot h er c on ference on M ar c h 1 2, 2 00 8, t he pa r t i e s j o i nt l y f i l e d t he i rr e s pe c t i ve i nt e r pret ati ons o f t he Se t t l e m e ntAgr e e m e nt , ne i t he ro f w hi c h m e nt i o ne d t he a r bi t r at i o n pr o vi s i o n. T h en , accor di n g t o P P A , t h e di st ri ctcourt, in a M a y 19, 200 8, of f

- t h e- recor d
c onfer enc e, i nt er pre t ed t he Set t l em entA gr ee m enti n a m anner c ont r ar y t o Ji n da l ’ s i n t erest s. Ji n da lc har ac t e r i z e s t hi s c on ference as an i n f orm aldi scussi on i n whi c h t he di s t r i c tc o ur t“ e xp r e s s e d c o nc e r n” o ve r Ji nda l ’ s i nt e r pr e t at i o n, a nd den i es t h at any ru l i n gs w ere m ad e. O n M a y 2 9 , 2 0 0 8 , t e n d a y s a f t e rt ha tc o nf

e r e nc e a nd a y e a ra f t e rPPA
o r i gi nal l y f

i l e d s ui t , Ji nda lm o ve d t o s t ayt he l i t i ga t i o n a nd c o m pe la r bi t r at i o n. PPA o bj e c t e d o n t w o g r o unds : ( 1) t hatt he c l ai m s di d not fal lw i t hi n t he s c o pe o f t he a r bi t rat i on c l aus e o f t he Se t t l e m e ntAgr e e m e nt , a nd ( 2) t hate ve n i f t he par t i es had agr ee d t o a r bi t r ate th e cl ai m s, Ji ndalw ai ved t hat r i ght by sub st an t i al l y i n vok i n g t h e j u di ci alprocess . T h e d i st ri ctcou rtsu m m ari l y den i ed Ji n da l ’ s m ot i on t o st ay an d to com pel arbi t rat i on . Ji n da lt i m el y f i l ed a n ot i ce of
a p p e a l. II B ec ause Ji ndals ee ks r evi ew of an or derr ef

usi ng t o s t ay t he pr oc ee di ngs a n d co m p e l a r b itr a tio n , w e h a v e ju r is d ic tio n o v e rt h is in te r lo c u to r y a p p e a l. S ee Re p ub l i c I ns . Co

. v . PAICO Re c e i v a b l e s , LLC , 3 8 3 F .3d 3 4 1 , 3 4 4 (5t h C ir. 2 0 0 4 ). T h i s c ou rtrevi ew s d e novo a di st ri ctcou rt ’ s d en i alof a m ot i on t o st ay l i t i gati on08- 20461

We typically review for clear error the district court’s factu al finding s un derlying it s 1 de te rm in ationwh eth erap artywaivedits ri ght toarb itrate
. Sh erer v. GreenTree Servicing LLC, 54 8 F .3d 3 79, 381 (5th Cir. 200 8) (per curi am). Since the district co urt made no factu al finding s onth e waive r i ssue, however, th ere are non e toreview fo r cl ear error . Althou ghthe waive r standardinvolves two prongs of analy sis (sub stanti al invocation 2 of th e j udicialpro cess and prej udic e) o ur precede nt has recogniz ed someoverlap:

Whe n oneparty reveal s a disinclin atio n to resort to arb itrationonany phaseof suit involving all parties, thoseparties are prej udic ed b y beingforc ed to b ear theexpen ses of a trial

. . . [.] Arbitration is de sign ed toavoid this ve ry expense. Substantiallyinvokingthe litigatio n machineryqu alifies as th e kin d of pre ju dice

. . . that i s theessence of waiver. Pricev. Drexel B urn ham Lambert, I nc. , 7 9 1 F .2 d 1 1 5 6 , 1 1 5 8( 5 thC ir

. 1 9 8 6) (qu oting E

. C. Ernst, I nc. v. Manhattan Const r. C o. of Tex

. , 5 5 9F .2 d 2 6 8 , 2 6 9( 5 thC ir

. 1 9 7 7))

.

5 and t o c o m pe la r bi t r at i o n. See Penn zoil Explor ati on & P rod. Co. v. R am co Ener gy Lt d. , 1 3 9 F .3d 1 0 6 1 , 1 0 6 5 (5t h C ir. 1 9 9 8 ). 1 III E ve n ass u m i ng ar

gue ndo t hatt he pa r t i e s a gr e ed to arbi t rat e t h ei r di spu t e, Ji ndalhas w a i ve d its ri ght t o c om pelar bi t r at i on. “ Th e q ues t i on o f w hat consti t u t es a w ai ver of t h e ri gh t of arbi t rat i on dep en ds on t h e fact s of each case

. . . . ” W alkerv. J. C

. B radf

ord & Co. , 938 F

. 2d 575 , 5 76 ( 5th C i r. 1 991 ) ( ci t ati on om i t t ed). Th e courtf i n ds w a iver “ w h en t h e party s eeking arbi t rat i on s ubs t ant i al l y i nvo ke s t he j udi c i alpr o c e s s t o t he de t r i m e nto rpr ej udi c e o f t he
o th e rp a r ty .” Id

. at5 77 ( c i t at i o n o m i t t e d)

. I n t hi s c o nt e xt , “ pr ej udi c e ” m e ans 2

“ t he i nhere nt unfai r nes s i n t er m s of del ay, expense , ordam age t o a par t y’ s l egal po s i t i o n t hato c c ur s w he n t he pa r t y’ s o ppo ne nt f o r c e s i t t o l i t i ga t e an i s s ue a nd l a ter s e e k s t o a rb i trate th e sa m e issu e.” R ep u b lic , 383 F

. 3d at 346 ( ci t ati on o m i t t e d)

. And, “ [ t ] hr e e fac t o r s a r e pa r t i c ul ar l y r e l e va nt ” t o t he pr ej u di ce det er m i nat i on: ( 1) w het her di sc ove r y o c c urr ed r el at i ng t o a r bi t r abl e c l ai m s; ( 2)08- 20461

6 t h e t im e an d exp en se i n curred i n defen di n g aga i n sta m ot i on f or s u m m ary ju d g m e n t; a n d (3 ) a p a r ty ’ s fa ilu r e to tim e ly a s s e r t it s rig h t t o a r b itr a te
. Id

. T o in v o k e th e ju d ic ia l p r o c e s s , a p a r ty “m u s t, a t t h e v e r y le a s t, e n g a g e in
som e ov ert ac t i n cou rt th a t e v in c e s a d esire to reso l ve the arb i trab l e d i sp u te th rou gh l i ti ga ti on rath er th a n arb i tration

. ” Id

. a t 3 4 4 (c ita tio n o m itt e d ). A presum pti on againstw ai ver exi st s su ch t h at the pa rt y assert i n g w ai ver “bears
a h e a v y b u r d e n o f p r o o f in its q u e s t t o s h o w ” w a i v e r . Id

. at 344 ( ci t ati on om i t t ed). A n d, “ [ w ] h il e th e m e re fai l u re t o asser tt h e ri gh tof arbi t rat i on does
no ta l o ne t r ans l at e i nt o a w aive rof t hatr i ght

. . . s uc h fai l ur e do e s b e aro n t he qu est i on of

prej u di ce, an d m ay, al on g w i t h other consi derati on s, requi re a c ou rt to con cl u d e th a t w a i ve r h a s occu rred

. ” P ri ce v. D rexe lB u rnh am L am bert , I n c. , 7 9 1 F .2 d 1 1 5 6 , 1 1 6 1 (5 th C ir . 1 9 8 6 ). Apar t y w ai ves ar bi t r at i on by se eki ng a d e c is io n o n t h e m e r its b e fo r e a tt e m p tin gto a r b itr a te
. See Mi l l e rB r e w i ng C o. v. Ft
. W ort h D i st ri bu t i ng C o. , 78 1 F

. 2 d 49 4 , 49 8 ( 5 th C i r. 19 8 6 ) (“A n y a ttem p t t o g o to th e m e r its a n d to re ta in s till t h e r ig h t t o a r b itr a tio n is cle a r ly im p e rm iss ib le.” (qu o ta tion om itted )). In this case , P P Aarg u es th a t Jind a l ’ s ac ti on s d em on str a te a d esire to l i t i ga t e r at he rt han ar bi t r at e , s t at i ng t hat , be f o r e s e e ki ng t o c o m pe la r bi t r at i o n, Ji ndal : ( 1) del ayed se eki ng arb i trat i on unt i la y earaf t erPP Af

i l ed s ui t ; ( 2)
r e m o ve d t he c as e t o fe de ral co ur t ; ( 3) f i l e d c o unt e r c l ai m s t hatr e l at e t o t he S et t l em en tA greem en t ; ( 4) parti ci pa t ed i n di scovery a n d n u m erous di scovery
m eet i n gs; an d ( 5) sough ta ru l i n g f rom t h e di st ri ctcourton the i n t erpret ati on of t h e Sett l em en tA greem en t
. A ccor di n g t o P P A , Ji n da lso u g h t t o com pel
a r b itr a tio n in a n a tt e m p t t o a v o i d th e d is tr ic t c o u r t’s a n tic ip a te d u n fa v o r a b le i n terp reta ti on of th e A gr ee m en t. Ji nda ldo e s no t c o nt e s t t hat i t t o o k t he f i r s t f o ur ac t i o ns c i t e d byPPA b ut08- 20461

This confe renc e to ok place after PPA had file d it s bri ef in this interlocutoryapp eal

. 3 7 c ont ends t hat t hey do nots upporta w ai verf i ndi ng. Ji ndaldeni es , how eve r , t hat i ts ought any m er i t s r ul i ng f r om t he di st r i c tc our tort hat any “ subs t ant i ve deci si on s” t ook p l ace, an d contend s th a t the d i st ri ctcourtm erel y “ exp ress ed
c o n c e r n ” a b o u t J in d a l’ s in te r p r e ta tio n a s p a r t o f a n “in fo r m a l[] d is c u s s [io n ].” PPA a r gue s ( 1) t hatt he par t i e s ant i c i pa t e d r ul i ngs w he n t he y s t at e d t hat“ i n t he
even t h at s et t l em en tw as un l i kely,

. . . t h ey coul d n arrow t h e i ssues i n t h e case t o s e v e r a ld i s c r e t e l e g a li s s u e s r e q u i r i n gr u l i n g s f r o m t h e Co u r t ” a nd subs equent l y f

i l ed t hei rcom pet i ng c ont r ac ti nt er pre t at i ons , an d ( 2) t hat Ji ndal agr ee d t hat t he c our ti ss ued r ul i ngs as dem on strate d by t he par t i es ’Jul y 16, 200 8, j oi n tst atus report , w h i ch st ates, i n p art , “P P Ab el i eves ob t ai n i n g a w ri t t en or der of [ t he di st r i c t c our t ’ s] pri or ver bal r ul i ngs i s nec es sa r y . . . . ” J i ndal
r es ponds t hat no r ul i ngs w er e e verac t ual l y r eques t ed, a n d th att he Jul y 16, 2008 s t at us r epo r tr ef l ec t s t he be l i ef

of PP A

— notJi ndal

— t hat or alr ul i ngs had bee n m ade. Furt her , Ji ndalm ai nt ai ns, w hat eve rt he di st r i c tc our tm ay have in te n d e d d u r in gth e M a y 1 9 , 2 0 0 8 , co n fe r e n c e , i t d id n o t m a k e a n y le g a lly bi n di n g orders orrul i n gs. Fr o m o u r r e v i e w o f t h e r e c o r d , i t a p p e a r s t h a t J i n d a l i s c o r r e c t t hat t he di st r i c tc our ti ss ued no l egall y bi ndi ng or der s orr ul i ngs att he M ay 19, 2008
c o n fe r e n c e ; in d e e d , th e o n ly r u lin gin d ic a te d in t h e c o n fe r e n c e m e m o r a n d u m is

“ Th e par t i es w i l l t al k. ” N onet hel es s, t he t r ansc r i pt of t he Sept em ber29, 2008, statu s con feren ce ( w i th w h i ch Jin d a ls u p p l em en ted th e reco rd w h en it fi l ed i ts 3
r epl y br i ef

) m akes c l ear , des pi t e t he di st r i c tc our t ’ s i m per fec tm em or y o f t he M ay 19 c o nfe r e nc e , t hatt he di s t r i c tc o ur ta tt hatc o nfe r e nce ga ve ver y s t r o ng i n d i ca ti on s th a t he fa v o red P P A ’ s i n terp reta ti on an d tha t i t w a s relu ctan t t o08- 20461

This wa s par t of a wi derexchange, whic h is als o illum inati ng: 4 PPA’SC OUNSEL : [Y]ou read the contract an d gave u s your interpretationof wh at thos e prob le ms we reat is su e th en . . . . An d Ithink on e o f th e i ssu eswe are w rit ing [si c] into o n appeal i s be c au s e it ’ s no t re duced to writing inth e recor d and it’s alittle bit difficult—Ithink ther e i s enough of th e re cord to refle ct that these thin gs occurred and that you weighed in on theseissu es, b ut th at’ s— THE DISTRI CTC OURT : Well , give it to me. Giveme yo ur respon se and I will saywhat Isai d. But if you have got anoth er six or seve n ar gu ments, j ust file yo ur motion

. . . . [Jindal’s c oun sel will] respon d .

. . an d th en I will look at any arguments th at I cited last time. I d on’twant tokeep recyclin g. A motion to [si c] r e h e ari n g i sf in e. . . . [B]ut j u str eh a shin gth e sa meargu me nt do es n ’tgetu s anywh er e. . . . JI NDAL’S C OUNSEL : Iguess that’s whatt he i s sue is, Judge. Itwas o ur und erstan ding , and we submitted, we did a j oint sub missionfor consi deration with the Court. We didn’ t a sk the Court informallyfor a ruling . We a sked for th e co urtt o co n si de r it , a n d th at wa s p erth e C ourt’sin structio nt o u s. T HEDI STR I C TC OURT : Right. Wedis cu sse d it . Isaidit wa s nota mb igu ou s, a n d itwa s this ; a n d th enwewe regoin gt o n ee d todocu me nt it

. . . . JIND AL’S CO UN SEL: O kay. 8 c o n sider furth er arg u m en t. F or exa m p l e, a t th e Se p tem b er 29 con feren ce, in
r e s p o n s e t o J i n d a l ’s c o u n s e l ’s s t a t e m e n tt h a t“ W e d i d n ’t a s k t h e C o u r tin fo r m a lly fo ra r u li n g . W e a s k e d fo rth e c o u r tto c o n s id e ri t , a n d t h a tw a s p e rth e C o u r t ’s in s tr u c tio n to u s ,” th e d is tr ic t c o u r t re s p o n d e d , “R ig h t. W e d is c u s s e d it. I s a id i t w a s n ot am b i gu ou s, an d i t w a s th i s; a n d the n w e w ere go i n g to n ee d to do c um e nti t
. . . . ” M o r e o ve r , w he n a ddr e s s i ng Ji nda l ’ s c o uns e le ar l i e ri n t he 4 Se pt e m be r2 9 c o nfe r e nc e , t he di s t r i c tc o ur ts t at e d, “ W hat ’ s t he o t he ra r gum e nt [ t hat w oul d requi r e f urt herbri ef

i ng] ? I di dn’ tbu y t he be stone s, i f t hat ’ s w hat you t ol d m e y ou gav e m e l as tt i m e, ” and s hor t l y t her eaf t eradded, “ I f

I had had
a r e p o r t e r , I wo u l d h a v e s a i d o r a l l y mo v e an d r e s p o n d ; b u tI d i d n ’ t , a n d s o we
n ee d ed a re cord

. ” T h e di st ri ctcourt ’ s ow n character i zati on of t h e M ay 29 conference l eaves08- 20461

9 us f i r m l y c onvi nce d t hat t he di st r i c tc our tgave a v er y cl ea r i ndi c at i on att hat
con feren ce th a t i t ha d con sider ed the pa rti es’ arg u m en ts an d i n ten d ed to ru le
a g a in st J in d a l’s in te rp re ta tion of th e S e ttlem e n t A g re e m e n t. T h e lac k of a f orm alrul i n g does n ot convince u s t h at Ji n da l , ha vi n g l earn ed that t h e di st ri ct
c o ur tw as notre c e pt i ve t o i t s a r gum e nt s , s ho ul d b e a l l o w e d a s e c o nd b i t e a tt he
a p p l e t h r o u g h a r b itr a tio n . S ee Mi l l er B rew i ng C o. , 7 8 1 F .2 d a t 4 9 8 ; seeal so Kh a n v . Parsons G l oba lS ervs . , 5 21 F. 3d 4 21 , 4 27 ( D

. C. Ci r . 2 00 8) (r ej e c t i ng a p p roa c h th a t w ou l d “en cou ra ge pa rti es to a ttem p t rep ea t l i ti ga ti on of m erits i ssues not r esol ved t o theirsati sfact i on , u n derm i n i n g t h e pol i cy t h at arbi t rat i on
m ayno tb e us e d a s a s t r at e gyt o m ani pul at e t he l egalpr o c e s s . ” ( quo t at i o ns o m itt e d )) , Kr am e rv. Ham m o nd, 943 F. 2d 176, 179 ( 2d C i r . 1991) ( “ Prej udi c e c an be su b stan t i ve, such a s w h en a party l oses a m ot i on on the m eri t s and t h en a tt e m p ts , in e ffe c t, to re litig a te th e is s u e b y i n v o k in ga r b itr a tio n . . . . ”); cf. C argil lF

err ou s I

n t ’lv. S ea P h o enix M V , 325 F. 3d 695, 701 ( 5t h C i r . 2003) ( “U ndert he fac t s of

t hi s c as e, i ti s c l earSer ene i s notgam i ng t he s ys t em by
s e e ki ng a w i n a tt r i al , a nd i n t he c as e o f a l o s s , a nt i c i pa t i ng a s e c o nd b i t e a tt he ap pl e t h r o u g h a r b i t r a t i o n . Ra t h e r , S e r e n e h a s p r e fe r r e d a r b i t r a t i o n s i n c e t he t i m e Cargi l lf

i l ed i t s c om pl ai nt
. ” )

. N ordoes i tm at t ert hat Ji ndalc ont ends t hat i tdi d no ts e e k a r ul i ng— i tkne w , o r s ho ul d hav e kno w n, t hat a de c i s i o n o n t he
m e r its w a s re a s o n a b ly lik e ly o n c e s e tt le m e n t n e g o tia tio n s re a c h e d a s ta n d s till and t he pa r t i e s s ubm i t t e d t he i rc o m pe t i ng i nt e r pr et ati on s o f t he Se t t l e m e nt A greem en t
. W e con cl u de t h at Ji n da lsu bstanti al l y i n vok ed the j u di ci alprocess byw ai t i ng t o m o ve t o ar bi t r at e unt i lt he di s t r i c tc o ur t ’ s pr o no unc e m e nt s i n t he M ay 19 conference an d that PP A w as prej u di ced t h ereby. A s t h at c on st i t u t ed
w ai ver of

Ji n da l ’ s pu t ati ve ri gh tt o i n vok e arbi t rat i on , w e need not c on si der
w h et h er Ji n da l ’ s ot h er act i on s c on st i t u t e w ai ver.08- 20461

10 IV Fort he fo r e go i ng r e as o ns , t he di s t r i c tco ur t ’ s re f us alt o s t ayl i t i ga t i o n a nd
c o mp e la r b i t r a t i o n i s A F F I RMED.