FI L ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T SEPTEMBER 7, 2011 J OHN L EY CL ERK [PUBLIS H] IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 1 0- 11 91 2

__ __ __ __ __ __ __ __ __ __ __ __ D.C. Dock etNo. 8 :0 9- cv -0 09 09 -J DW -EAJ
SARA E. KRINSK, on be ha lf o f he rs el f an d a ll ot he rs si m il arl y si tu at ed , Pla in ti ff - Ap pe ll ee, ve rs us SUNTRUST BANKS, INC., et a l., Defen da nt s, SUNTRUST BANK, a Geo rg iaBan ki ng Co rp or at io n, Defen da nt- App el la nt .

__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co urt forth e Mi dd le Dis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ (Sep te m be r 7, 2 01 1)Befo re TJ OFLAT, CARNES andHILL, Circu itJu dg es .

TJOFLAT, Cir cu itJu dg e: Defen da ntSunTru stBan k (“ Su nTru st ”) ap pe al s t he di stric t co urt’s o rd er de nyin g i ts m ot io n t o c om pe l p la in ti ff Sar a Kri ns k t o s ub m ithe r cl ai m s t o arb it rat io n p ur su an t t o a n arb it rat io n a gr eem en t g ov ern edby the Fed eral Arb itrat io n Act(“ FAA”), 9 U.S.C. § 1 et s eq . The d is tri ctco urt h el d t ha t Su nTru st ha d, b y pa rti ci pa ti ng inth e li ti ga ti on forni ne m on th s p rio r to reque st in g t ha t t he
cas e b e subm it te d t o arb it rat io n, wai ve d i ts co ntractua l ri gh t t o c om pe l ar bi tra ti on . Init s ap pe al , Sun Trus t ar gu es th atKrin sk ’s subm is si on of a n am en de d c om pl ai nt
rev iv edit s ri gh t t o c om

pe l arbi tra ti on , no twi th st an di ng it s p rev io us waiv er o f th at rig ht . W e fi ndm eri t i n S un Trus t’s ar gu m en t an d t he refo re v acat e th e o rd er an d
rem an d t o t he di stric t co urt fo r fu rth er p ro ceed in gs . I. A. InDecem be r 20 06 , Krin skap pl ie d fo r an d o bt ai ne d fr om SunTru sta ho m eequi ty loa n t ha t al lo wedhe r to dra w fro m a $5 00 ,00 0 h om e-equi ty lin e o f cre di t (“ HELOC”) co ll at eral iz edby K rin sk ’s $1 .6 m il li on Sara so ta , Flo rid a h om e. In
se cu rin g t he lo an , Krin skex ecu te d S un Trus t’s s ta nd ard -fo rm lo anag reem en t, kn own as an “ Acces s 3 Equ it y Lin e Acco un t Ag reem en t an d Di sc lo su re

2St at em en t” (th e “ Loa n Ag reem en t” ). Am on g t he Loan Agre em en t’s t erm s i s an

arb it rat io n c laus e requi rin g Kri ns k a ndSunTru stto res ol ve all di sp ut es th ro ug h bi nd in g a rb it rat io n wh en ev er ei th er p art y ele ct s arbi tra ti onan d p ro vi de s t he ot he r pa rty with writ te n n ot ic e o f th e el ect io n t o a rb it rat e. Su ch no ti ce o f el ect io n “ m ay be gi ve n a fte r a l aws ui t h as be enfil edan d/ orin pape rs fil edin th e la wsu it .” If a pa rty elec ts to subm itth e d is pu te to arb it rat io n, t he LoanAgre em en t p recl ud es res ol ut io n o f th e cl ai m s b y cla ss act io n. 1 B. InOcto be r 20 08 , Sun Trus t u ni la te ral ly sus pe nd edKrin sk ’s rig htto acce ss $4 00 ,00 0 o f he r HELOC. Sun Trus t ea rli er h adm ai le d Kri ns k alet te r reque st in g th atsh e p ro vi de SunTru stwith upd at edfin an ci al in fo rm at io n; SunTru stco nt en ds th atit s d eci si on to su sp en d Kri ns k’s HELOC was ba se d o n the in fo rm at io n s he
subs eque nt ly pro vi de d i n re sp on se to th atreque st . Ind eed , Sun Trus t i nf orm ed Krin skby lett er tha t i t was su sp en di ng he r HELOC acces s due to “reas on ab le
co nc ernth at[sh e wou ld ] be un ab le to ful fil l [h er] fin an ci al pay m en t o bl ig at io ns
The L oan Agree ment provides in per tinent part: 1 5. NO CLASS ACTI ONS, ETC. . . . if you or we elec t to arbitrate a claim, neither you nor we will have the right: (a) to participate in a cla ss action in court or in arbitration, either as a

class represe ntative, class membe r or c lass opponent; or (b) to join or consolidate Claims with claims of any person other

than you. No arbitrator shall have a

uthority to conduct any

arbitration in viol ation of this provision. 3wit h [S un Trus t] un de r [h er] cred itli ne acco un t b ecau se of am at eri al ch an ge in

[h er] fin an ci al cir cum st an ces .” 2 Krin skall eg es th atSunTru st ’s just ifi cat io n fo r su sp en di ng he r acc ou ntwas pr et ex tu al . She cla im s t ha t Su nTru stsu sp en de d h er HELOC, as wel l as th os e o f ot he r Fl or id a h om eo wne rs who ha d o bt ai ne d HELOCs fro m SunTru staro un d t he
sa m e ti m e, as pa rt o f a s ch em e Su nTru stco nc oc te d t o re st or e it s capi ta l re se rv es , whi chha d b eco m e d ep le te d i n t he fal l o f 20 08 . Accor di ng to Krin sk , HELO Cs li ke he rs —t ho se so ldto Flo rid a res id en ts be twee n the lat e 1 99 0s an d e arl y 20 08
an d s ecuredby Flo rid a rea l p ro pe rty—were a m on g t he hi gh es t-r at edris k e le m en ts in SunTru st ’s deb t p ortfo li o, an d S un Trus t, re co gn iz in g t ha t i t h ada si gn ifi can t
co nc en tra ti on of c red itris k a ris in g fr om th es e lo an s, ai m edto syste m at ic al ly li qu id at e th e lo an s’ ava il ab le cred itba lanc es . To do th at , Sun Trus t m ai le d l et te rs , li ke Krin skrece iv ed , reque st in g t ha t HELOC cu st om ers pro vi de SunTru stwith up da te d fi na nc ia l i nf

orm at io n. Th is , Krin skpo si ts , pro vi de d S un Trus t wi th a
m ean s t o a ss ertco nt riv edjus ti fic at io ns forsu sp en di ng cu st om ers ’ acce ss to th ei r HELOCs— i.e., u nd er the gu is e o f co nduc ti ng rev ie ws o f cu st om ers ’ fin an ci al

SunTrust’s letter cla imed that the suspension dec ision was based on a repor t issued by 2 Equifax, a cre dit reportingag ency , and adde d that Krinsk could obtain a c opy of her cre dit report direc tly from Equifax . The letter also informed K

rinsk that she could re quest reinstate ment of her bor rowingprivileg es if she w ere to provide additional financ ial documentation re quested. 4po si ti on s. Th e m os t v ul ne rab le tar ge ts of S un Trus t’s s ch em e, ad ds Krin sk , who is

92 -y ears -o ld , were el de rly HE LOC bo rro wers , fro m who m SunTru stan ti ci pa te d li tt le res is ta nc e. C. Bas edon th e fo reg oi ng all eg at io ns , Krin sk , on May 15, 2 00 9, fi le d acla ss act io n c om

pl ai nt(th e “ Orig in al Co m pl ai nt ”) ag ai ns t Su nTru st —as well as Su nTru st ’s cor

po rat e p aren t, SunTru stBan ks , Inc . (“ SBI” ), an d S un Trus t an d 3 SBI’s Pr es id en t an d C hi ef Ex ecu ti ve Offic er J am es M. W el ls III. The Orig in al Co m pl ai ntst at edcla im s fo r: ( 1) fin an ci al eld er ab us e u nd er Fl or id a’s Adu lt Pro te ct iv e Servi ces Act, § 41 5.1 01 ; (2 ) br each of c on tra ct ; (3 ) de cei t; (4) ne gl ig en t
m is rep res en ta ti on ; (5 ) br each of f iduc ia ry du ty; (6) vi ol at io n o f Reg ul at io n Z o f

4 th e Tru th in Lend in g Act(“ TILA”), 12 C.F.R. § 22 6.5 b( f); an d (7 ) br each of t he im pl ie d c ov en an t o f go odfai th an d fa ir d eal in g. Itals o re qu es te d d ecl arat ory rel ie f co nc ern in g Kri ns k’s ri gh t t o a cces s h er HELOC. The Orig in al Co m

pl ai ntde fin edth e p ro po se d c la ss as: al l Fl or id a p erm an en t o r pa rt- ti m e res id en ts th aten te redin to an ag reem en t wi th SunTru sten ti tl ed“ Acces s 3 Equ it y Lin e Acco un t Agr eem en t an d Di sc lo su re” a ndwho , aft er at ta in in g the ag e o f si xt y - SunTrust is a wholly

owned subsidiary

of SunTrust Ba

nk Holding Company , which is a 3 wholly owned subsidiary

of SBI
. The c laim for bre ach of

fiduciar y duty was a sserted a g ainst SunTrust only
. 4 5fiv e (6 5) , recei ve d alet te r fro m SunTru stbe twee n J ul y

1, 2 00 8 a nd Octo be r 16 , 20 08 , reque st in g upd at edfin an ci al in fo rm at io n . . . an d who were s ub se qu en tl y

in fo rm edth ei r co ll at eral iz edcred itli ne ha d be ensu sp en de d o r reduc eddu rin g t he dra w per io d fo r pu rp orte dl y fai li ng to pro vi de th e in fo rm at io n re qu es te d b y SunTru st . Krin skreas on ab ly esti m at ed , ina la te r m ot io n fo r cl as s ce rti fic at io n, th atth is 5 cl as s wo ul d “ co ns is t[] of

hu nd red s o f m em

be rs lo cat edth ro ug ho utFlo rid a.” Pl .’ s Mo t. fo r Cl as s C ert ifi cat io n andMem . of Law i n S up p. 7 –8 , Aug . 13 , 20 09 (em ph as is ad de d)
. On J ul y 6, 2 00 9, Su nTru stres po nd edto th e Ori gi na l Co m pl ai ntby fili ng , in li euof a n a ns wer, a m ot io n t o d is m is s, ch al le ng in g the su ffi ci en cy of e ach of Krin sk ’s cau se s o f act io n; SBI an d Well s fi le d ajoi ntm ot io n t o d is m is s t he fo ll owi ng da y . Sun Trus t’s m ot io n m ad e n o m en ti onof t he Loan Agre em en t’s arb it rat io n c laus e. The di stric t co urt d idno t ru le on th e m ot io ns to di sm is s fo r ov er s ix m on th s, an d, i n t he m ean ti m e, th e li ti ga ti on pro ceed ed . On Aug us t 1 0, 2 00 9, fo r in st an ce, Su nTru stan d Kri ns k jo in tl y fil eda Cas e Ma na ge m en t Re po rt i n wh ic h (1 ) Su nTru stex pr es sl y

st at edth atitop po se d a rb it rat in g t he cla im s as se rte d a ga in st

Krinsk’s motion for cla ss cer tification, under F ed. R. Civ. P. 23(c)(1), w as filed on 5 August 13, 2009. 6itinth e Ori gi na l Co m pl ai nt ; (2 ) Su nTru stlai d o utit s d is co ve ry pl an ; an d (3 ) th e

6 pa rti es ag reedon a pr op os eddi sc ov ery de ad li ne , a pr op os eddi sp os it iv e m ot io n de ad li ne , on a fi na l p retria l co nf eren ce d at e “ on or a fte r Apr il 11 , 20 11 an d fo r tri al on or a fte r May 16 , 20 11 .” Mo reo ve r, fo ll owi ng Krin sk ’s Aug us t 1 3, 2 00 9
m ot io n t o c ert ify the cla ss de fin edin th e Ori gi na l Co m pl ai nt , Sun Trus t l ev ie d a vi go ro us de fen se ag ai ns t an d o pp os it io n t o c la ss cert ifi cat io n a ndcla ss di sc ov ery. Thro ug ho utth is ti m e, Su nTru stdi d n otass ertit s ri gh t t o c om pe l 7 arb it rat io n u nd er the Loan Agre em en t o r othe rwis e in di cat e it s i nt en t t o d o s o. The di stric t co urt fi na ll y

rul edon th e m ot io ns to di sm is s o n J anuary 8, 2 01 0, gr an ti ng SunTru st ’s m ot io n i n p art an d d is m is si ng all of Kri ns k’s cl ai m s ag ai ns t 8 SBI a ndW el ls . The co urt al so ga ve Krin sktwen ty day s’ lea ve to am en d t he Orig in al Co m

pl ai ntin li gh t o f it s o rd er. Subs eque nt ly, on Jan ua ry 28 , Krin skfil ed
anam en de d c om

pl ai nt(th e “ Am en de d C om pl ai nt ”), wh ic h a ss ert edrev is ed , bu t
m os tl y si m il ar, cl ai m s ag ai ns t Su nTru ston ly—for(1) bre ach of c on tra ct ; (2 )

The discove ry

plan cove red inter

rog atories, r equests for

admissions, production 6 reque sts, ex pert witness disclosure s, depositions, and the handlingof conf idential information. For example, on September 9, 2009, SunTrust filed a n opposition t o Krinsk’s August 7 13, 2009 motion for class ce rtification, and, f rom Novembe r to Dec ember 2009, SunTrust filed four se parate motions for protec tive order s relate d to Krinsk’s re quests for c lass-wide discove ry . The c ourt prese rved K

rinsk’s claims ag ainst SunTrust for bre ach of contra ct and br eac h 8 of implied covena

nt of g ood faith and f

air de aling , and her

reque st for dec laratory

relief . All other c laims ag ainst SunTrust were dismiss ed without prejudice
. 7vi ol at io n o f Reg ul at io n Z o f TILA; an d (3 ) br each of the im pl ie d c ov en an t o f go od fai th an d fa ir d eal in g. 9 Bec au se th e d is tri ctco urt h ady etto rul e o n Kri ns k’s m ot io n fo r cl as s cert ifi cat io n, t he Am en de d C om pl ai ntals o o ffer eda ne w def in it io n fo r th e pr op os edcla ss , no w def

in in g t he cla ss as: All Flo rid a res id en ts who en te redin to on e o r m or e ag reem en ts fora . . . [HE LOC] wit h S un Trus t Bankpu rs ua ntto it s “ Acces s 3 Equ it y Lin e Acco un t Ag reem en t an d Di sc lo su re” tha t was co ll at eral iz edby real est at e lo cat edin Flo rid a, an d wh o h adth e av ai labl e b al an ce o f th ei r HELOC su sp en de d o r reduc edan yti m e b etweenJanua ry 1, 2 00 7 to th e d at e o f cl as s ce rti fic at io n (t he “ Cl as s Pe rio d” ). Thi s n ew de fin it io n—no w enc om pa ss in g F lo rid a res id en ts of a ny age wh os e HELOCs Su nTru stha d s us pe nd edforan y reas on du rin g ath ree- y ear c la ss pe rio d— gr eat ly enl arg edth e p ot en ti al si ze o f th e p ut at iv e cl as s. In de ed , Krin sk la te r es ti m at ed , inanam en de d m ot io n fo r cl as s ce rti fic at io n fi le d o n M arch 11 , 20 10 , th e num

be r of cla ss m em

be rs to be in th e th ou sa nd s— if n otth e te ns of th ou sa nd s. See Pl.’s Am . Mo t. fo r Cl as s C ert ifi cat io n a ndMem . of Law i n S up p. at7– 8, Ma r. 11 , 20 10 (es ti m at in g n um ero si ty of am en de d c la ss de fin it io n b as ed
on “ Su nTru st ’s ownreco rd s” whi ch “ sh ow t ha t atlea st56 ,75 8 Acc es s 3 HELOCs

Krinsk also ag ain sought declar atory relief conce rningher right to ac cess he r HEL OC 9 funds. 8is su edto res id en ts of F lo rid a an d s ecu redby real p ro pe rty loc at edin Flo rid a were

su sp en de d o r reduc edby Sun Trus t dur in g t he Cla ss Peri od ”). Su nTru stpro m

pt ly ans weredth e Am en de d C om pl ai nton Feb ru ary 10 , 20 10 . In i ts an swe r, SunTru strai se d i ts rig htto arb it rat io n fo r th e fi rs t t im e si nc e th e li ti ga ti on be ga n, as se rti ng , as a n a ffi rm at iv e d efen se , th atth e Loa n Agr eem en t’s ar

bi tra ti on claus e b arre d Kri ns k fr om pu rs ui ng he r act io n i n c ou rt
an d d em an di ng arb it rat io n o f he r cl ai m s. Su nTru stals o fi le d, al on g wi th it s an swe r, (1 ) a m ot io n, u nd er the FAA, to co m pe l arbi tra ti on , 9 U.S.C. § 4, an d t o 1 0 1 1 st ay th e act io n p en di ng arb it rat io n, i d. § 3, an d (2 ) a m ot io n t o p ro hi bi t 1 2
m ai nt en an ce o f a cl as s ac ti onpu rs ua ntto th e te rm s o f th e Loa n Ag reem en t.

There is no dispute that the L oan Agree ment “evide nc[es] a transac tion involvi ng 1 0 commerc e” a

nd is theref

ore w ithin the scope of the F AA, 9 U.S.C. § 2. 9 U.S.C. § 4 states in pertinent part, “ A par ty ag grieve d by

the alleg ed . . . re fusal of 1 1 another to arbitrate under a

written agree ment for a

rbitration may

petition any

United States district court . . . for

an orde r direc ting that suc h arbitration procee d in the manner provided for

in such agree ment.” 9 U.S.C. § 3 states: 1 2 I f any suit or proce edingbe brought in any of the c ourts of the United States upon any issue ref era ble to arbitration under an a gree ment in writing f or such arbitration, the court in which such suit is pending , upon beingsatisfied that the issue involved in such suit or proce edingis refe rable to arbitration under such an agree ment, shall on application of one of the pa rties stay the trial of the a ction until such arbitration has be en had in a ccor dance with the terms of the a gree ment, providingthe applica

nt for the stay

is not in default in proce edingwith such arbitration. 9Krin skop po se d tho se m ot io ns , cla im in g t ha t Su nTru stha d wai ve d i ts co nt ractua l

rig htto co m

pe l arbi tra ti on . 1 3 D. The di stric t co urt, i n an o rd er i ss ue d M arch 26 , 20 10 , den ie d S un Trus t’s
m ot io n t o c om

pe l arbi tra ti on , agr eei ng with Kri ns k t ha t Su nTru stha d wai ve d i ts rig htto requi re ar

bi tra ti on of t he cla im s s he ass ert edin th e Am en de d C om pl ai nt . 1 4 Alt ho ug h a rb it rat io n a gr eem en ts go ve rn edby the FAA are t o b e li be ral ly
en fo rced , see Mo se s H. Co ne Mem ’l Hos p. v . Merc ury Co ns tr. C or

p., 4 60 U.S. 1, 24 , 10 3 S . Ct. 9 27 , 94 1, 7 4 L. Ed. 2 d 7 65 (19 83 ), co urts wil l n otco m pe l 1 5 arb it rat io n wh enth e p arty who see ks to arb itrat e h as waiv edit s ri gh t t o d o s o, s ee

In her me morandum in opposition to S unTrust’s motion to compel arbitration, Krinsk 1 3 also claimed that the L oan Agree ment’s ar bitration and cla ss-ac tion-waiver clause s were unconsciona

ble. Be cause the district court he ld that SunTrust had waived its right to compel arbitration, 1 4 it did not address Krinsk’s c laim that the L oan Agree ment’s ar bitration and cla ss-ac tion-waiver clause s were unconsciona ble. That issue, c onsequently , is not presented on a ppeal. “[T] he Supreme Court has commande d that ‘questions of ar bitrability must be 1 5 addre ssed with a hea lthy

reg ard f or the fe dera l policy

favoring a

rbitration.’” Ivax C orp. v. B
. Br aun of Am., Inc., 286 F .3d 1309, 1315 (11th Cir. 2002) (quotingMoses H. Cone Mem’l Hosp. v. Merc ury

Constr. Corp., 460 U.S. 1, 24, 103 S . Ct. 927, 941, 74 L . Ed. 2d 765 (1983)) . The Court has based this stance on Section 2 of the F AA, 9 U.S.C. § 2, which dec lare s “that a written agree ment to arbitrate ‘in any maritime transa ction or a c ontrac t evidencinga tra nsaction involving commer ce . . . sha ll be valid, irrevoc able, a nd enfor cea

ble, save upon such grounds as exis t at law or in e quity

for the r evocation of any contra ct.’” Moses H. Cone, 460 U.S. at 24, 103 S. Ct . at 941 (a lteration in orig inal) (quoting9 U.S.C. § 2). 10Mo rewi tz v. W. of Eng . Shi p Own ers Mu t. Pro t. & In de m . Ass ’n, 62 F.3d13 56 , 13 65 (11 th Cir . 19 95 ) (“ Arb it rat io n s ho ul d n otbe co m pe ll edwhen th e p art y

who
se ek s t o c om

pe l arbi tra ti on ha s wai ve d t ha t ri gh t.”) ; s ee al so Bu rto n- Dix ie Co rp . v. Tim ot hy McCarth y

Co ns tr. C o., 4 36 F.2d40 5, 4 07 (5th C ir. 1 97 1) (ex pl ai ni ng th at
anarb it rat io n a gr eem en t, “ jus t l ik e an y

ot he r co nt ract. . . , m ay

be waiv ed ”). To

1 6 de te rm in e whe th er a p arty ha s wai ve d i ts co nt ractua l ri gh t t o a rb it rat e, co urts ap pl y a two -p arttes t: “ Fi rs t, [t he y ] de ci de if, ‘un de r th e to ta li ty of th e ci rcu m st an ces ,’ th e p arty ‘ ha s ac te d i nc on si st en tl y with t he arb it rat io n ri gh t,’ and , se co nd , [th ey ] lo okto see whet he r, by doi ng so , th atpa rty ‘ ha s i n s om e way pr ejud ic edth e o th er p arty .’ ” Iv ax Co rp . v. B. Braun of Am ., Inc ., 28 6 F .3d13 09 , 13 15 (11 th Cir . 20 02 ) (quo ti ng S & H Co nt ract or s, In c. v. A.J . Taft Co al Co ., 90 6 F.2 d 1 50 7, 1 51 4 (1 1t h C ir. 1 99 0) ). 1 7 Here, the di st ric t co urt fo un d b ot h p ro ng s o f th e wai ve r te stsat is fie d i n de nyin g S un Trus t’s m ot io n t o c om pe l arbi tra ti on . Firs t, the co urt d et erm in edth at

In Bonne r v. City

of Prichar d, 661 F.2d 1206, 1209 ( 11th Cir. 1981) (en ba nc), this 1 6 court a dopted as bindingprec edent a ll decisions of the for mer F ifth Circuit handed down prior to October 1, 1981. Be cause fede ral policy

strong ly favor s arbitration, the party who argues wa iver “ bear s 1 7 a hea vy burden of

proof” under this two-pa rt test. Stone v. E.F. Hutton & Co., 898 F.2d 1542, 1543 (11th Cir. 1990) (pe r curiam) (quotingBe lke v. Merrill Ly nch, Pierc e, F enner

& Smith, 693 F.2d 1023, 1025 ( 11th Cir. 1982), overr uled on other grounds by

Dea n Witter Rey

nolds, Inc. v. By rd, 470 U.S. 213, 105 S. Ct. 1238, 84 L . Ed. 2d 158 (1985)) (interna l quotation mark omitted). 11Su nTru stha d a ct edin co ns is te nt ly w it h i ts rig htto arb it rat e Kri ns k’s cl ai m s

th ro ug h i ts pa rti ci pa ti oninth e li ti ga ti on up un ti l t he fil in g o f it s an swe r an d
m ot io n t o c om

pe l arbi tra ti on . “ [A] party th atsubs ta nt ia ll y

in vo ke s t he li ti ga ti on
m ach in ery pr io r to de m an di ng arb it rat io n m ay waiv e it s ri gh t t o a rb it rat e,” S & H Co nt ract or s, 9 06 F.2dat 1 51 4 (q uo ti ng E.C. Erns t, In c. v. M an ha tt anCo ns tr. C o., 55 9 F .2d26 8, 2 69 (5t h C ir. 1 97 7) ) (i nt ern al qu ot at io n m arkom it te d) , if tha t
co nduc t m an ife st s t he pa rty’ s i nt en t t o wai ve arb it rat io n, s ee M or ewit z, 62 F.3dat 13 66 (“ W ai ve r oc cu rs whena pa rty seek in g a rb it rat io n s ub st an ti al ly part ic ip at es in li ti ga ti on to a po in t i nc on si st en t wi th anin te ntto arb it rat e.”). In th is cas e, th e di st ric t co urt co nc lu de d tha t Su nTru stha d, fo r ni ne m on th s p rio r to fil in g i ts
an swe r an d m ot io n t o c om pe l ar bi tra ti on , “ in vo ke d t he jud ic ia l p ro ces s i n li ti ga ti ng th is cas e wit ho utan y in di cat io n t ha t i t was co nt em pl at in g a rb it rat io n.” Ord er 6 , Mar. 2 6, 2 01 0. Al th ou gh “ a d efen da ntm ay tes t the su ffi ci en cy

of a
co m pl ai ntwitho utwaiv in g [t he de fen dant ’s] rig htto arb it rat io n,” th e co urt ru le d,

“ Su nTru stdi d m

uc h m or e th anth at .” Id . at 7 (ci ti ng W il so n v . Par Bu il de rs II, In c., 87 9 F . Sup p. 1 18 7, 1 18 9 (M .D. Fla. 1 99 5) ). In p art ic ul ar, the co urt fo cu se d
on SunTru st ’s exp res s o pp os it io n t o a rb it rat io n i n t he Aug us t 1 0, 2 00 9 C as e Man ag em en t Re po rt a ndSunTru st ’s si gn ifi can t m ot io ns pra ct ic e in op po si ti on to

12Krin sk ’s reque stforcla ss cert ifi cat io n a ndcla ss di sc ov ery. Thes e act io ns , th e

co urt d et erm in ed , di sp lay edSunTru st ’s con se ntto th e cas e’s pr oc eed in g i n c ou rt. Add it io na ll y , th e d is tri ctco urt d eci de d t ha t, due to SunTru st ’s act io ns , Krin skwou ldsu fferpre

jud ic e were S un Trus t p erm it te d t o a ss ertit s arbi tra ti on rig ht s i n s uc h a n u nt im el y m an ne r. In d et erm in in g wh ethe r th e p art y op po si ng arb it rat io n h as be enpre

jud ic ed , cou rts “ co ns id er the len gt h o f de la y in de m an di ng arb it rat io n a ndth e ex pe ns e in cu rredby tha t p art y fro m pa rti ci pa ti ng in th e li ti ga ti on pro ces s.” S & H Con tra ct or s, 9 06 F.2dat 1 51 4. Here , th e d is tri ctco urt
co nc lu de d t ha t Su nTru st ’s ele ct io n o f arb itrat io n was un ti m el y be cau se

“ Su nTru st ’s rig htto ele ctarb it rat io n a ccru edat l eas t as earl y as t he fil in g o f th e [o rig in al ] co m

pl ai nt ,” an d yet, Su nTru stha d p erm it te d n earl y ni ne m on th s t o p as s be fo re i t fi rs t as se rte d i ts rig htto ha ve th e d is pu te arb it rat ed . Order7, Ma r. 26 , 20 10 . This “be la te d e le ct io n t o a rb it rat e,” the co urt h el d, p reju di cedKrin skby in du ci ng he r to ex pe ndon cla ss -rel at edm ot io n p ract ic e an d d is co ve ry —“ th e type of li ti ga ti on ex pe ns e[s ] th atarb it rat io n was de si gn edto all ev ia te ”—i n re as on ab le rel ia nc e o n h er ex pe ct at io n t ha t Su nTru stwou ldno t ar bi tra te he r cl ai m s. Orde r 1 8 6– 7, M ar. 2 6, 2 01 0; see als o M or ewit z, 62 F.3dat 1 36 6 (e xp la in in g t ha t p reju di ce
For example, the court highlighted that Krinsk was re quired to re spond to SunTrust’s 1 8 opposition t o cer

tification of her

orig inal proposed c lass, which re sulted in Krinsk havingto file multipl e motions to compel discovery
. 13is ge ne ral ly fou nd“ in si tu at io ns wher e th e p art y see ki ng arb it rat io n a ll ows th e op po si ng pa rty to u nd erg o t he types of l it ig at io n e xp en se s tha t arbi tra ti on was de si gn edto all ev ia te ”). Tha t Kri ns k h adfil edth e Am en de d C om pl ai nt , th e co urt ad de d, was “ imm at eri al ” to it s as se ss m en t, s in ce the cla im s s he rai se d i n b ot h
co m pl ai nt s wer e “ba se d o n t he same op erat iv e fac ts ,” i.e., Su nTru st ’s all eg ed ly im pr op er s ch em e to su sp en d HELOCs sec ur edby Flo rid a rea l p ro pe rty. O rd er 7 n.5 , Mar. 2 6, 2 01 0. Su nTru stno w app eal s t he ord er d en y in g i ts m ot io n t o c om pe l arbi tra ti on an d t o s tay

th e act io n. Al th ou gh th e o rd er i s an in te rlo cu to ry rul in g, Su nTru stm ay ap pe al itun de r 9 U.S.C . § 1 6( a)(1 )(A), (B)
. 1 9 II. Init s b rie f onap pe al , Sun Trus t ar gu es th atth e d is tri ctco urt erredin
co nc lu di ng th atth e Am en de d C om pl ai ntwas i m

m at eri al to whet he r Su nTru stha d waiv edit s ri gh t t o c om

pe l arbi tra ti on . Spe ci fic al ly, Su nTru stco nt en ds th at , eve n 2 0 if i ts in vo cat io n o f th e jud ic ia l p ro ces s o pe rat edto waiv e it s ri gh t t o a rb it rat e th e cl ai m s i n the Orig in al Co m pl ai nt , th e Am en de d C om pl ai nt“reju ve na te d” or We have jurisdiction under 28 U.S.C. § 1292(a)(1)
. 1 9 We reviewthis lega l conclusion by the district court de novo. See, e.g ., Ivax C orp., 2 0 286 F.3d at 1316 (dec laringthat the district court’s le g al conc lusion that the defenda nt waived its right to compel arbitration through the party ’s par ticipation in the liti g ation proce ss is subject to de novo re view). 14rev iv edit s ri gh t t o c om pe l arbi tra ti on . Whe th er Su nTru st ’s po si ti on is co rrec t pr es en ts anis su e o f fi rs t i m pr es si on for

th is co urt. The de ci si on s o f ot he r fed eral
co urts th atha ve co ns id eredth e is su e are in fo rm at iv e an d p ers ua si ve . They ha ve he ldth at , inli m it edcir cu m st an ces , fai rn es s d ic ta te s t ha t a wai ve r of arb itrat io n b e nu ll ifi edby the fil in g o f anam en de d c om pl ai nt . W e co nc lu de th atth is cas e pr es en ts on e o f th os e li m it edcir cu m st an ces , andth atSunTru st ’s rig htto co m pe l arb it rat io n i s t he refo re re vi ve d. Alt ho ug h, u nd er the Fed eral Ru le s o f Ci vi l Pr oc edur e, “ anam en de d
co m pl ai ntsupe rs ed es th e in it ia l co m pl ai ntan d b eco m es th e o pe rat iv e p le ad in g i n th e cas e,” Lo wery

v. Al a. Po wer Co ., 48 3 F .3d11 84 , 12 19 (11 th Cir . 20 07 ), th e fil in g o f anam en de d c om pl ai ntdo es no t au to m at ic al ly revi ve all de fen se s o r ob jecti on s t ha t the de fen da ntm ay ha ve waiv edin res po ns e to th e in it ia l co m pl ai nt . See 5 C Ch arl es Alan Wrig ht& Arth urR. Mi ll er, Fed eral Prac ti ce & P ro cedur e § 1 38 8 (3 d e d. 2 00 4) (“ The fil in g o f anam en de d c om pl ai ntwil l n otrev iv e th e rig htto pre se ntby m ot io n d efen se s t ha t wer e av ai labl e b utwere n otass ert edin ti m el y fas hi on pri or

to th e am en dm en t o f th e p le ad in g.” ). Howev er, the de fen da nt wil l b e al lo wedto pl eadan ew inres po ns e to anam en de d c om pl ai nt , as i f itwere th e in it ia l co m

pl ai nt , when th e “ am en de d c om pl ai nt. . . ch an ge s t he th eo ry or sc op e o f th e cas e.” Bro wn v . E.F. Hutt on & Co ., 61 0 F . Sup p. 7 6, 7 8 (S .D. Fla.
1519 85 ) (ci ti ng Jo se ph Ban cro ft & So ns Co . v. M. Lo wen st ei n & So ns Co ., 50

F.R.D. 41 5 (D. Del . 19 70 )). Itsi m pl y wou ldbe un fai r to all ow t he pl ai nt iff to ch an ge th e sc op e o f th e cas e wit ho utgra nt in g t he de fen da ntanop po rtu ni ty to
res po ndan ew. Id. Lik ewis e, a d efen da nt ’s waiv er o f th e ri gh t t o c om pe l arbi tra ti onis no t
au to m at ic al ly nul li fie d b y th e p la in ti ff’s fi li ng of a n a m en de d c om pl ai nt . See, e.g ., Gil m or e v . She ars on /Am . Exp res s In c., 81 1 F .2d10 8, 1 12 (2dCir . 19 87 ) (“ [A]
m ot io n t o c om

pe l arbi tra ti on of acla im

in vo lv es th e co re i ss ue of apa rty’ s wil li ng ne ss to subm ita di sp ut e to jud ic ia l re so lu ti on an d, i f wai ve d, i s n ot
au to m at ic al ly revi ve d b y

th e subm is si on of a n a m en de d c om pl ai nt .”), o ve rru le d o n ot he r gr ou nd s b y

McDo nn el l Do ug la s Fi n. Co rp . v. Pen n. Po wer & Li gh t Co ., 84 9 F.2 d 7 61 (2dCir . 19 88 ). Rathe r, co urts wil l p erm itth e d efen da ntto res ci ndhi s earl ie r wai ve r, an d re vi ve hi s ri gh t t o c om pe l arbi tra ti on , on ly if itis sh own th at th e am en de d c om

pl ai ntun expe ct ed ly chan ge s t he sco pe or t he ory of the pl ai nt iff’s cl ai m s. Id . at 1 13 (ci ti ng Bro wn, 6 10 F. Sup p. at78 ); En vi rex , Inc . V. K. H. Sch us sl er fü r Um

welt te ch ni k Gm

bH, 8 32 F. Sup p 1 29 3, 1 29 6 (E.D. Wis. 1 99 3) (fi nd in g t ha t an am en de d c om pl ai ntth at“ m ad e m ajor

. . . ch an ge s t o [the pl ai nt iff’s] ori gi na l co m

pl ai nt , alt eri ng an d a dd in g t o t he is su es to be de te rm in edat tri al ,” rev iv edth e d efen da nt s’ rig htto de m an d arb itrat io n) ; Br own , 61 0 F . Sup p. at 1678 –7 9 (r ev iv in g t he de fen da nt ’s rig htto co m pe l arbi tra ti onwher e th e am en de d
co m pl ai nt“ m at eri al ly alte r[ed ] th e si tu at io n” by “ si gn ifi can tl y bro ad en [in g] th e fo cu s o f th e li ti ga ti on ”). The in vo cat io n o f th e jud ic ia l p ro ces s o rd in ari ly establ is he s a wa iv er o f th e de fen da nt ’s rig htto co m

pe l arbi tra ti on—i .e., su ch co nduc t s ho ws, i n t he no rm al
cas e, th atth e d efen da ntin te nd s t o e le cta jud ic ia l fo ru m rathe r th ananarb it ral tri bu na l. See Cab in etree o f W is ., Inc . v. Kraft m ai d C ab in etry , Inc ., 50 F.3d38 8, 39 0 (7 thCir . 19 95 ) (“ [I]nv ok in g ju di ci al pro ces s i s p res um pt iv e wai ve r.” (em ph as is om it te d) ); s ee al so IowaGrai n C o. v . Bro wn, 1 71 F.3d50 4, 5 09 (7t h Ci r. 19 99 ) (d is cu ss in g C ab in etree) . Howev er, wh ena pl ai nt iff fil es anam en de d pl ead in g t ha t u ne xp ect ed ly chan ge s t he sh ap e o f th e cas e, th e cas e m ay be “ so al te r[ed ] . . . tha t the [de fen da nt ] sh ou ldbe rel ie ve d fr om it s wai ve r.” Cab in etree, 50 F.3dat 3 91 . The d is tri ctco urt s ho ul d t he n “ pe rm ita [d efen da nt ’s] pre vi ou s waiv er t o b e res ci nd ed .” Id . (ci ti ng Gil m or e, 81 1 F .2dat 1 13 ; En vi rex , 83 2 F
. Supp at 1 29 6) . In s uc h acas e, pu rs ua ntto th e st ro ng fed eral po li cy supp orti ng th e en fo rcem en t o f arb it rat io n a gr eem en ts , th e d efen da nt ’s m ot io n t o c om pe l arb it rat io n s ho ul d b e g ran te d abs en t a n ew waiv er b y th e d efen da ntba se d o n t he de fen da nt ’s lac k o f di li ge nc e in see ki ng arb it rat io n fo ll owi ng th e fi li ng of t he
am en de d c om

pl ai nt . See, e.g ., Env ire x, 8 32 F. Sup p. at12 96 (hi gh li gh ti ng th at 17“ [t]he de fen da nt s p ro m pt ly resp on de d t o t he
. . . am en de d c om pl ai nt ” wit h the ir
m ot io n t o c om

pe l arbi tra ti on ). Inco nt ras t, h owe ve r, th e d efen dant ’s pri orwaiv er s ho ul d n otbe nu ll ifi ed , an d t he re s ho ul d b e n o re vi va l o f th e arb it rat io n ri gh t, wh enth e p la in ti ff h as fil ed
anam en de d c om

pl ai ntth atdo es no t u ne xp ect ed ly exp an d t he li ti ga ti on ’s sco pe . Fo r ex am pl e, co urts ha ve refu se d t o re vi ve th e ri gh t t o c om pe l arbi tra ti on wher e th e am en de d c om

pl ai ntha s m ad e o nl y

m in orfactua l ch an ge s. See , e.g., Gil m or e, 81 1 F .2dat 1 13 –1 4 (f

in di ng no rev iv al of a rb it rat io n ri gh t wh ere o nl y min or factua l ch an ge s wer e m ad e th atdi d n otalt er the sco pe or t he ory of p la in ti ff’s cl ai m); s ee al so W ei gh t Watch ers of Qu eb ec, Ltd . v. Weig htW at ch ers Int ’l, Inc., 39 8 F . Sup p. 1 05 7, 1 06 0 (E.D.N.Y. 19 75 ) (d en y in g d efen dant ’s m ot io n t o c om pe l arb it rat io n, al th ou gh pl ai nt iff ha d fi le d an a m en de d c om pl ai nt , bec au se th e am en de d c om

pl ai nton ly “res ta te [d ], in
. . . a cl eare r an d m or e o rd erl y fas hi on , th e cl ai m s ar is in g o utof t he m at te rs alr eady pl ead edan d d eal t wi thin [a] su m m ary jud gm en t m ot io n” ). Here, the Am en de d C om

pl ai ntis cle arl y

no t l ik e th e am en de d c om pl ai nt s i n th es e la tt er ca se s. Altho ug h, as th e d is tri ctco urt co nc lu de d, t he Am en de d Co m pl ai ntdo es m erel y

ass ertne w cla im s b as edon th e sa m e o pe rat iv e fac ts as t he cl ai m s i n the Orig in al Co m pl ai nt , th e Am en de d C om pl ai ntis by no m ean s 18“ imm at eri al .” Thatco nc lu si on fla tl y ig no redth e si gn ifi can ce o f th e n ew cl as s de fin it io n i n t he Am en de d C om pl ai nt , whi ch gre at ly bro ad en edth e p ot en ti al sco pe of th is li ti ga ti on by ope ni ng th e d oo r to th ou sa nd s— if n otten s o f th ou sand s— of
ne w cla ss pl ai nt iff

s n otco nt em

pl at edin th e o rig in al cla ss de fin it io n b y di sc ard in g th e o ldde fin it io n’s l im it s o n t he cla ss pl ai nt iff s’ age an d o n t he ba se s fo r th ei r HELOC su sp en si on s, an d b y ex pa nd in g t he cla ss pe rio d fr om ov er thr ee m on th s 2 1 to ov er thr ee years. Thi s v as t au gm en ta ti onof t he pu ta ti ve cla ss so alt eredth e sh ap e o f li ti ga ti on th at , des pi te it s p rio r in vo cat io ns of t he jud ic ia l p ro ces s, Su nTru stsh ou ldhave be enall owe d t o re sc in d i ts waiv er o f it s ri gh t t o a rb it rat io n. Su nTru st ’s act s i n fu rth eran ce o f th e li ti ga ti on all oc cu rredpri orto th e fi li ng of t he Am en de d Co m pl ai ntan d t hu s co nc ern edth e cl as s co nt em pl at edin th e Ori gi na l Co m pl ai nt ; Su nTru stpro ceed edin co urt o n t he expe ct at io n t ha t, i f th e cl as s ac ti onwere cert ifi ed , itwou ldde fen d i ts el f ag ai ns t o nl y th e rel at iv el y

sm al l p la in ti ff cl as s de fin edin th e Ori gi na l Co m pl ai nt . Sun Trus t co ul d n otha ve for es een th atKrin sk
wou ldex pa ndth e p ut at iv e cl as s i n s uc h abro adway ni ne m on th s i nt o t he
As SunTrust points outin its brief on appe al, the languag e of the amende d class 2 1 definition presumably

opens the door to a llow in class members whose HEL OC rights were suspended f

or, amongother thing s, “monetar y defa ults, for failingto provide update d financ ial information, for a

materia l chang e in financ ial circ umstances, or for a signific ant dec line in the appra ised value of

the collater al prope rty

over [the] three and a

half year plus [ class period] .” 19li ti ga ti on . Giv enth is un fo res een alt erat io n i n t he sh ap e o f th e cas e, Su nTru st , in

pl ai n fa irn es s, s ho ul d h av e b een all owe d t o re sc in d i ts earl ie r wai ve r th ro ug h i ts pr om ptm ot io n t o c om

pe l arbi tra ti on . 2 2 Insu m , hav in g fo un d t ha t Su nTru st ’s rig htto co m pe l ar bi tra ti on , eve n i f waiv edwith re sp ectto th e cl ai m s i n t he Orig in al Co m pl ai nt , was re vi ve d b y Krin sk ’s fil in g o f th e Am en de d C om pl ai nt , we VACATE the di st ric t co urt’s o rd er de nyin g S un Trus t’s m ot io n t o c om pe l arbi tra ti on an d s ta y

th e p ro ceed in gs an d REMAND fo r fu rth er p ro ceed in gs co ns is te nthe rewi th
. 2 3 SO ORDERED.

The only

action that SunTrust took after the Amende d Complaint was filed was to 2 2 submit i ts answer

and its motion t o compel ar bitration thirteen day s later. Thus, in no wa y did SunTrust act in a manne r inconsistent with its right to elec t arbitration followingthe filingof the Amended Complaint. We are mindful that the district court, on re mand, must resolve Krinsk’s claim that the 2 3 L oan Agree ment’s ar

bitration and cla ss-ac tion-waiver clause s are unconsciona

ble. 20