2010 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit

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# Nino v . J ewelry Exch ange Inc
P r e c e de nt i al or N on-P r e c e de nt i al : P r e c e de nt i al D ocke t N o . 09-1268

F o llow thi s and a dd it ion al work s at : http://d i git alc ommon s .l a w . vi ll anova . e du/thir dc ir c uit_2010

Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

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F U E N T E S , C irc u it Ju d g e : R aj ae N i no br ough tthi s act i on agai ns thi s form er empl oy er , al l egi ng t hathe w as di s cr i m i nat ed aga i ns ton acc ount of hi s genderand nat ion al or i gi n. A ft erl i t i gat i ng t he mat t er befor e the D i s t r i ctC our tforfi ft een month s, the empl oy er i nvoked an a rbi t r at i on pr ovi s i on i n N i no’ s empl oym entcontr act a n d m o v e d th e D istric t C o u r t to c o m p e l th e p a rties to a rb itrate t hei rdi s put e. N i no oppos ed the mot i on, argu i ng ( 1) t hatt he arbi t r at i on agr eementw as uncons ci onabl e and, ther efor e, unenfor cea bl e, and ( 2) thatbyengagi ng i n ext ens i ve l i t i gat i on of thi s di s put e, the empl oy erhad w ai ved i t s r i ghtt o compel arbi t r at i on. T he D i s tr i ct C our tconcl uded thatal t hough the arbi t rat i on agreem ent cont ai ned un con sci on able t erm s, t ho se pr ovi s i ons coul d be s ever ed fr om t he contr actand the r emai nder o f it s t erm s coul d be enf or ced. T he C our tthen conc l uded that th e e m p lo y e r d id n o t, th ro u g h its lit ig a tio n c o n d u c t, w a iv e its r i ghtt o compel arbi t r at i on. W e di s agr ee. I n ourvi ew , the pervas i vel yone- s i ded nature of t he arbi t r at i on agr eement ’ s te r m s demonstr at es t hatt he empl oy er d id n o t se e k to u se a rb itratio n a s a leg iti m a te m e a n s f o r d isp u te r es ol ut i on. I ns t ead, t he empl oy ercr eat ed a s y s t em t hatw as des i gned t o gi ve i tan unfai radvant age thr ough rul es that i m perm i s s i bl y restr i ct ed empl oy ees ’ acc es s t o arbi t r at i on andT h e b u sin e ss e n tity n a m e d a s a d e f e n d a n t in th is 1 l aw s ui ti s J ew el r yE xchange , I nc. J ew el r yE xchange does bu si ness as D i am on ds Int ernat i on al , and w e, l i ke the part i es, w ill r e f e r t o it b yth a t n a m e .

- 4- t hatgave the empl oy eran undue i nfl uence overthe s el ect i on of t he arbi t r at or . W e hol d t hat i t i s not appr opr i at e, i n t he face of su c h p e rv a siv e o n e -sid e d n e ss , to s e v e r th e u n c o n sc io n a b le p r o v i s i o n s f

r o m t h e r e m a i n d e ro f t h e a rb i t r a t i o n a g r e e m e n t

. We fur therconcl ude thatthe e m pl oy er , byengagi ng i n pr otr act ed lit ig a tio n o f th is m a tter b e f o re b e late d lyse e k in g to a rb itrate its di s put e, w ai ved i t s r i ghtt o compel arbi t r at i on . W e w i l l t hus re v e rse th e D istric t C o u rt’s o rd e r c o m p e ll in g th e p a rties to a rb itr a te

. I. A. D iam o n d s Intern ati o n a l (“ D I”) is on e o f th e w o rl d ’s lar g e st je w e lryre taile rs. N in o is a Jo rd a n ian n a tio n a l w h o , in 1 J anuary2000, agr eed t o w or k forD I as a s al esp erson and g e m o lo g ist

. B ec au se N ino d id n o t hav e a U n it ed S tat es w o rk vi s a w hen he w as hi r ed, he w as as s i gned t o D I ’ s A rub a sto re, w her e he w as pai d $450 p er w eek, pl us comm i s s i ons and hous i ng. D I hel ped N i no obt ai n a U ni t ed St at es w or k vi s a, aft er w hi ch i t t r ans ferr ed hi m t o i t s A l as ka s t or e. I n Sept ember2000, D I as ked N i no t o t r ans fer to it s St

. T hom as l ocat i on, and he agr eed. U pon hi s arr i val at t he St

. T hom as s t or e, N i no w as gi ven a cop yof the company ’ s s t andar d empl oym entcontr act

. T he- 5- fol l ow i ng ar e s om e of the pr ocedur es and dead li n es cont ai ned i n t he contr act t hat w e fi nd m os t t r oubl es om e. A r t i cl e I V of the contr acts et s for t h a gr i evanc e and arbi t r at i on pr ocedur e thatt he contr actdes cr i bes as “the s ol e, fi nal , bi ndi ng and exc l us i ve r emedyforanyand al l empl oym ent [- ] r el at ed di s put es . ” (J

. A

. at 80. ) T he r emedi al pr oces s out l ined in A r t i cl e I V r equi r es an aggr i eved e m pl oy ee t o s at i s fy a s er i es of r equi r ement s befor e he is e lig ib le to a rb itrate a d isp u te

. F irst, th e e m p lo y e e m u st f ile w i t h h i s m a n a g e ra d e t a i l e d w r i t t e n g r i e v a n c e w i t h i n f i v e d a ys o f havi ng r ece i ved not i ce of t he ac t i on compl ai ned of; t he ma n a g e ri s t h e n r e q u i r e d t o r e s p o n d wi t h a d e c i s i o n wi t h i n t wo d ay s. If th e em p loy ee is u n sati sfied w ith the m a n ag er’s deci s i on, he m us t r e- fi l e t he gr i evanc e w i t h t he m an agi ng d ir ec to r w ith in tw o d ay s o f h av ing rec eive d the m an ag er’s d e c isio n ; th e m a n a g in g d ire c to r is th e n re q u ire d to re sp o n d w ith a d e c isio n w ith in f

iv e d a y s. If

th e e m p lo y e e is n o t sa tisf ied w ith t he m anag i ng dir ect or’ s d eci si on , he m ustfi l e a w ri t t en requ est forarbi t r at i on w i t h t he mana gi ng di r ect orw i t hi n fi ve day s of h a v in g re c e iv e d th e d e c is io n . T he contr actm akes cl ear t hat “[t ] he t i m e l i m i t s pr ovi ded for above ar e bi ndi ng and m aynotbe w ai ved exc eptbyw r i t t en agr eementof both par t i es , ” ( i d. at82) , m eani n g that an e m p lo y e e w h o d o e s n o t f ile g rie v a n c e s w ith in th e a p p lica b le ti m e f ram e lose s the o p p o rtu n ityto arb itrate a d ispu te alt o g ethe r. T he contr acti ns ul at es D I a g ai ns ta compar abl e r i s k of d ef au lt

— itp rov ides that if D I f ail s to resp o n d to an em p loy ee ’s g ri ev an ce o n a ti m elyb asis, “the last d e c is io n g iven b y[D I] s h a ll b e a f

in a l a n d b in d in g re s o lu tio n o f t h e g ri e v a n c e .” (I d .) I f an empl oy ee s at i s fi es t hes e gr i evanc e fi l i ng r equi r ement s , D I m u s ts ubm i ta r eques tt o the A m er i can- 6- A rbi t rat i on A ssoci at i on (“A A A ”) fo r a pan el of f ou r arbitrat ors. T he part i es t hen s el ecta s i ngl e arbi t r at orfr om t hi s l i s tacc or di ng t o t he fol l ow i ng m ethod: F rom t he p anel the E m ploy er w i l l stri ke the fi rs t a rb i t rat or for w hatever reas on i s un accep t able t o t he Em pl oy er . T he Em pl oy ee w il l then be al l ow ed t o s t r i ke one a rbi t r at orfr om the rem ai ning nam es of p anel m em bers. T his process w i ll cont i nue unt i l ther e r emai ns one arbi t r at or w ho w i l l be the arbi t r at or for t hi s gr i evanc e orthe par t i es can de ci de on an a rbi t rat orthatw oul d be m u tu a lly a c c e p ta b le

. ( I d

. a t 8 1

. ) S t a t e d mo r e d i r e c t l y , DI i s p e r mi t t e d t o s t r i k e t wo m ember s fr om t he l i s tof pot ent i al arbi t r at or s , butthe empl oy ee is p e rm itte d to s tr ik e ju s t o n e . T he contr actpr ovi des t hatt he arbi t r at i on m us t t ake pl ace a t D I’s p lac e o f

b u si n e s s “ a t a d a te a n d tim e m u tu a lly conveni entt o bot h par t i es but i n no event m or e than thi r t y( 30) d a y s a f t e r t h e s e le c tio n o f

a n a rb itr a to r h a s b e e n m a d e .” (I d .) T he contr actfur t herpr ovi des thatthe part i es ar e ent it l ed t o be r epr es ent ed by couns el att hei row n expens e, t hatdi s coverym ay b e h a d b ye ith e r p a rtyp u rsu a n t to th e F e d e ra l R u les o f C iv il Pr ocedur e, and thatt he fe es and e x pens es of the arbi t r at orand s t enogr apherar e t o be borne equa l lybythe part i es . U nderthe contr act , t he arbi t r at or “may m ake any aw ar d deemed l egal and appr opr i at e, ” and i n doi ng s o, “musti nt erpr et , appl yand be bo u n d b yt h e Emp l o y e r ’ s ru l e s , r e g u l a t i o n s , p o l i c i e s a nd pr ocedur es as w el l as appl i cabl e fe der al , s t at e, l ocal and- 7- co m m o n law s. ” (Id

. at 81 -82

. ) O n t he s ame day thatN i no s i gned the empl oym ent contr act , he s i gned a s epar at e one- page doc um entent i t l ed “D i amonds Int ernat i onal A G R E E M E N T , ” i n w hi ch N i no ac k n o w l edged thathe had r ece i ved D I ’ s empl oy ee ha ndbook. ( I d. at 84. ) I n t hi s one- page a gr eement , N i no al s o acknow l edged t hat D I w as aut ho ri zed “to un i lat eral l yam end i t s rules , re g u latio n s, p o licie s, a n d p ro c e d u re s w ith o u t p rio r n o tice to its empl oy ees . ” ( I d

. ) N i no fur t heracknow l edged “ t hatt he g r i e v a n c e p r o c e d u r e [ ] s e tf o r t h i n t h e e mp l o y e e h a n d b o o k i s my ex clu s iv e re m ed yfo r m yem p loym en t- related d ispu tes. ” (Id

. ) T he empl oy ee ha ndbook, i n turn, s et s for t h a pr oces s for di s put e r es ol ut i on t hatpar t i al l yr es embl es , but i s not i dent i cal t o, th e g rie v a n c e p ro c e ss d e sc rib e d in th e e m p lo ym e n t c o n tra c t. Speci fi cal l y , t he pr oces s des cr i bed i n the handbook di ffe r s fr om th e c o n tra c t in th a t it d o e s n o t m e n tio n a rig h t to a rb itratio n , it r e q u i r e s e mp l o y e e s t o f i l e th e i n i t i a l g r i e v a n c e wi t h i n two ( r athert han fi ve) day s of the com pl ai ned- of ac t i on, and i tm akes t he dec i s i on of the m anagi ng di r ect orfi nal as t o al l deci s i ons excep t t erm i nat i ons , w hi ch maybe furt herappea l ed t o a ma n a g e me n tp a n e l f

o rf i n a l r e s o l u t i o n . T h e ma t e r i a l s t h a tDI pr ovi ded t o N i no do notpurpor tt o r econ cil e t he di ffe r ence s b et w een the con t ractand the h and bo ok , no r do t heyex p lain w h ich o f

th e se tw o d isp u te r e so lu tio n m e c h a n is m s a c tu a lly a p p lie s to a n e m p lo y e e ’s g ri e v a n c e s . B. W hi l e the pr eci s e det ai l s of N i no’ s all egat i ons of d isc rim in a tio n a r e n o t ce n tra l to th e iss u e s p re se n ted in th is appea l , w e s um m ar i ze t hem t o pr ovi de t he bas i s forhi s fede r al- 8- c o m p lain t. N in o , w h o is a g a ym a n , d id n o t in iti a llyd isc lo se h is s exual or i ent at i on t o hi s co- w or ker s i n St

. T hom as . A ccor di ng t o hi s al l egat i ons , N i no’ s co- w o rke rs began t o fi xat e upon the iss u e o f h is s e x u a l o rie n tatio n , m a k in g in c re a sin g lyh o stile comm e n t s d u r i n g h i s e mpl o yme n t

. Ev e n tu a l l y , Ni n o r e v e a l ed to h is c o -w o rk e rs th a t h e w a s g a y . A c c o rd in g to th e c o m p lain t, t hi s r evel at i on s erved onl y t o i nt ens i fyt he har as s m entbyhi s cow o rk e rs, w h ich e sc a late d to b o th v e rb a l a n d p h y sic a l a ss a u lts to w hi ch D I ’ s m anage m entturned a bl i nd ey e. A ccor di ng t o N i no’ s al l egat i ons , on February2, 2005, one of N i no’ s co- w or ker s , J as on L ett s om e, fal s el yacc us ed N i no of “c om i ng on” t o hi m . ( J

. A

. at 43. ) N i no r epor t ed thi s i nci dent t o t he s t or e manager , an d L ett s om e i n turn compl ai ned t o the m anag e r t h a t Ni n o “ a c t e d a n d t a l k e d l i k e a f e ma l e ” whe n he i nter act ed w i t h L et t som e. (I d. ) I n respon se to these co m plai nts , t he managerw r ot e up both N i no and L ett so m e forbei ng di s rupt i v e . Shor t l yt her eaf t er , N i no w as s us pended f orone w eek w ith o u t p a ya n d w a s th re a ten e d w ith ter m in a tio n . T h e ra tio n a le behi nd N i no’ s s us pens i on w as thatN i no had al l egedl yus ed a pr ofani t yw hen he w as i nform ed thathe w as bei ng w r i t t en up, al t hough N i no cont ends t hat t hi s w as a pr et extfor d isc rim in a tio n . N in o d id n o t re tu r n to w o rk f o llo w in g h is su sp e n sio n , an d h e a lleg e s th a t h e w a s c o n stru c tiv e ly di s char ged, i

. e. , t hathe w as compel l ed t o r es i gn d u e to the h o stile w o rk in g e n v iro n m e n t. N in o d id n o t f ile a g rie v a n c e w ith D I r e la te d to h is s u s p e n s io n a n d e v e n tu a l r e s ig n a tio n . C. O n M ar ch 3, 2006, N i no fi l ed a com pl ai nt agai ns tD I and W endyT ar apani , a manager of D I ’ s St

. T hom as s t or e, al l egi ng,F o r sim p licity , w e re f e r to D I a n d T a ra p a n i co llec tiv e ly 2 as “D I ” or“D efe ndant s , ” exc eptw her e i ti s nece s s aryt o i dent i fy th e m in d iv id u a lly.

- 9- i nt eral i a, t hathe had been di s cr i m i nat ed aga i ns ton the bas i s of gender and nat i onal or i gi n. A s t he s eventh o f th e t en 2 a f f i r ma t i v e d e f

e n s e s a s s e r t e d i n i t s a n s we rt o t h e c o mp l a i n t , DI c o n t e n d e d t h a tNi n o was “ c o n t r a c tu a l l yb a r r e d t o a n yr emedy o th e r t h a n o n e a c h ie v e d b ya rb itr a tio n .” (I d . a t 5 4 .) N ot w i t hs t andi ng t hi s i nvocat i on o f arbi t r at i on i n i t s i ni t i al pl eadi ng, D I act i vel yl i t i gat ed thi s cas e forfi ft een months betw een J une 2006, w hen i t w as s erved w i t h t he compl ai nt , and Sept ember2007, w hen i tfi nal l yfi l ed a m ot i on t o di s m i s s bas ed upon t he arbi t r at i on cl aus e. I n par t i cul ar , the part i es confe r r ed and s ubm i t t ed a j oi nt pr opos ed cas e m anage m entor der( w hi ch w as sil entas t o t he ques t i on of arbi t r at i on) ; t heyatt ended no few ert han t en pre t r i al confe r ence s befor e t he magi s t r at e j udge, t hr oughou t w hi ch D I w as s i l entas t o t he mat t erof arbi t r at i on; and theyengage d i n ext ens i ve di s covery , i ncl udi ng s ervi ce a nd su p p lem enta tio n o f

d isc lo su re s p u rsu a n t to F e d e ra l R u le o f C iv il P r o c e d u r e 2 6 , s e r v i c e a n d s u p p l e m e n t a t i o n o f w r i t t e n d i s c o v e r y, and at t end i ng fou r deposi t i on s. O n Se p t e mbe r2 6 , 2 0 0 7 , a f t e rl i t i g a t i n g t h i s d i s p u t e f or fiftee n m o n ths w ith n o m en ti o n o f th e a rb itr a tion clau se a p art fr om t he af

fi r m at i ve def

en s e as s ert ed i n i t s ans w ert o t he compl ai nt , D I fi l ed a mot i on t o di sm iss N i no’ s cl ai m s on the g ro u n d s th a t th e p a rties ’ c o n tra c t m a d e a rb it r a tio n th e so le m et h od of r es ol vi ng empl oym ent

- r el at ed di s put es . N i no oppos ed the mot i on on t he gr ounds thatt he one- s i ded natur e of- 10- t he arbi t r at i on cl aus e made i t uncons ci onabl e and t hat , t hr ough i t s l i t i gat i on conduct , D I h ad w aived anyr i ghtt o enfor ce the c la u s e . T he D i s t r i ctC our t gr ant ed D I ’ s m ot i on t o di s m i s s . T he C o u rtinit ial lyn o ted th a t asp ec ts of the a rbitrati o n clau se w ere uncons cionabl e. T he C our thel d, how ever , thatthe uncons ci onabl e pr ovi s i ons w er e seve r abl e fr om t he r emai nder of the arbi t r at i on agr eement , beca us e t hey di d notcons t i tut e an “e ssen ti al pa rto f th e a g ree d ex ch an g e” b etw ee n N in o an d D I. R e sta tem e n t (S e c o n d ) o f C o n tra c ts § 1 8 4 . T h e C o u rt th u s h e ld t hatt he r emai nderof t he arbi t r at i on agr eementw as enfor cea bl e. A d d iti o n a ll y, th e C o u rt d e ter m in e d th a t D I h a d n o t w a iv e d its rig h t to e n f

o rc e th e a r b it ra tio n c lau se , n o tw ith sta n d in g its fi ft een- m ont h del ayi n fi l i ng t he mot i on t o compel arbi t r at i on, b e c a u se D I h a d ra ise d a rb itrab ili tya s a n a f f irm a tiv e d e f

e n se in i t s ans w ert o N i no’ s compl ai nt , and bec aus e D I had notengage d i n di s pos i t i ve mot i on p rac ti ce pr i ort o m ovi ng t o compel arb itrati o n . N ino fil ed this ti m elyap p ea l of the D istri ct C o u rt ’s d is m is s a l o rd e r. II. T he D i s t r i ctC our thad j ur i s di ct i on overthi s cas e under 28 U

. S. C

. § 1331 and 48 U

. S. C

. § 1612( a)

. W e have j ur i s di ct i on pur s uan t t o 9 U

. S. C

. § 16( a) ( 3)

. See G r een Tr ee Fi nanci al C orp. - A l abama v. R andol ph, 531 U

. S. 79, 89 ( 2000) ( expl aini ng t hat“w her e . . . t he D i s t r i ctC our thas or der ed the p a r t i e s t o p r o c e e d t o a rb i t r a t i o n , a nd di s mi s s e d a l l th e c l a i ms befo re it , t hatdeci s i on i s ‘ fi nal ’ w i t hi n the meani ng of § 1 6 (a)(3), an d th e ref

o re a p p ea lable” ). “W e e x erc ise p lena ry r e v i e w o v e r q u e s t i o n s o f l a w c o n c e r n i n g t h e a p p l i c a b i l i t yand- 11- s cope of arbi t r at i on agr eeme n ts

. ” Zi m m erv. C ooperN eff A dvi s or s , I nc. , 523 F

. 3 d 224, 228 ( 3d C i r . 2008) ( ci t at i on om i t t ed)

. W e l i kew i s e exer ci s e pl enaryr evi ew overt he D i s t r i ct C o u r t ’ s d e t e r mi n a t i o n o f whe t h e rDI , th r o u g h i t s l i t i g at i on conduct , w ai ved i t s r i ghtt o compel arbi t r at i on. See Ehl ei t erv. G r a p e t r e e S h o r e s , I n c . , 4 8 2 F

. 3 d 2 0 7 , 2 1 5 ( 3 d C i r . 2 0 0 7 )

. We r evi ew t he D i s t r i ct C our t ’ s fac tual fi ndi ngs forcl earerr or . See Z im m e r, 5 2 3 F .3 d a t 2 2 8

. III . A. W e fi r s taddr es s t he D i s tr i ct C our t ’ s deci s i on t o s evert he uncons ci onabl e as pect s of t he par t i es ’ arbi t r at i on agr eementand e n f o rc e th e re m a in d e r o f

th e a g re e m e n t. W e h a v e re p e a ted ly r ecogni zed t hatt he Feder al A rbi t r at i on A ct( “FA A ”) es t abl i s hes a “s t r ong fe d er al pol i cyi n favorof the r es ol ut i on of di s put es t hr ough arbi t r at i on. ” Pul eo v. C has e B ank U SA , N

. A , - - - F. 3d

- - - - , 2010 W L 1838762, at*3 ( 3d C i r . M ay 10, 2010) ( ci t at i on om i t t ed) ; s ee a l s o Spi net t i v. S erv ice C orp. I nt ern. , 324 F. 3d 2 1 2 , 2 1 3 (3 d C ir. 2 0 0 3 ). U n d e r th e F A A , arb itratio n a g re e m e n ts

“ a re e n f o rc e a b le to th e s a m e e x te n t a s o th e r c o n tr a c ts .” A lexa n d er v . A n tho n yInt’l , L

. P ., 3 4 1 F

. 3 d 2 5 6 , 2 6 3 (3d C ir

. 2003) ( i nt ernal quot at i ons and ci t at i ons om i t t ed)

. “A par t y t o a val i d and enf

or cea bl e arbi t r at i on agr eementi s ent i t l ed t o a s t ay of fe der al cour tpr ocee di ngs pendi ng arbi t r at i on as w el l a s an o rd e r c o m p e llin g s u c h a rb itr a ti o n . ” Id . (c itin g , in te r a lia , 9 U .S .C . § § 3 -4 ) ( e m p h a s is a d d e d ). T he pr ece di ng qual i fi cat i on t hatan arbi t r at i on agr eement be “va l i d and enfor cea bl e” be for e arbi t r at i on can be compel l ed, i d. , m akes cl ear that w h en a pa r t yt o an arbi t r at i on agr eementB ycontr as t , “ques ti o n s co ncerni ng t he val i di t yof the 3 ent i r e c o n t r a c t[ a s o p p o s e d t o t h e v a l i d i t yo f t h e a rb i t r at i on cl ause i t self] are t o b e res olved byt he arbi t rat or i n the fi rs t i ns t ance , notbya fe der al ors t at e cour t

. ” Pr es t on v. Fer r er , 552 U

. S. 346, 349 ( 2008) ( ci t i ng B uckey e C heck Cashi ng, Inc

. v. C ard eg n a, 54 6 U

. S

. 4 4 0 , 4 4 5 -4 6 (2 0 0 6 )) ( em p h asis ad d ed ). N i no’ s chal leng e i s l i m i t ed t o the pr ovi s i ons of the arbi t r at i on cl aus e i t s el f; he does notchal l enge the val i di t yof the contr actas a w h o le

.

- 12- chal l enges t he val i di t yof the agr eement , a thr es hol d ques t i on of arbi t r abi l i t y i s pr es ent ed for t he cour t t o deci de. See H ow s am 3
v. D ean W i t t er R eyno l ds, Inc. , 53 7 U

. S

. 79 , 83 (2002 ); see al so Par i l l a v. I A P W or l dw i de Servs . , V I , I nc. , 368 F. 3d 269, 275- 76 ( 3d C i r . 2004) ( “I ti s up t o the court , pr i ort o gr ant i ng s uch an or der[compel l i ng arbi t r at i on] , t o det erm i ne w hetherthe part i es en tered a v ali d ag ree m en t t o arb itrate .” ) (cit ati o n o m itted). N in o ’s c o n ten tio n th a t th e a rb itratio n a g re e m e n t a t iss u e in th is c a s e i s u n c o n s c i o n a b l e p r e s e n t s s u c h a q u e s t i o n o f a rb i t r a b i l i t y. See, e. g. , D oct or ’ s A s s ocs . , I nc. v. C as ar ot t o, 517 U

. S. 681, 687 (1 9 9 6 ) (“ [ G ]e n e ra lly a p p lic a b le c o n tr a c t d e f e n s e s , s u c h a s . . . uncons ci onabi l i t y , m aybe appl i ed t o i nval i dat e arbi t r at i on agreem ents w i t ho ut cont raveni ng § 2 [of the FA A ]. ”); see al so Pul eo, 2010 W L 1838762, at*5. I n addr es s i ng a cl ai m thatan arb itrati o n clau se is u n co n scio n ab le , w e a p p lythe “ o rdin ary s t at e l aw pr i nci pl es . . . of the i nvol ved s t at e ort err i t ory , ” w hi ch, i n t hi s cas e, i s t he l aw of the V i r gi n I slan d s. G ayv. C r edi t I nform , 511 F. 3d 369, 388 ( 3d C i r . 2007) ( ci t at i ons om i t t ed) ; s ee a l s o Spi net t i , 324 F. 3d at214.- 13- W e have r evi ew ed V i r gi n I s l ands l aw governi ng uncons ci o nabi l i t ychal l enges t o arbi t r at i on agr eement s on n u me r o u s o c c a s i on s . S e e , e . g . , Ed wa r d s v . HOV ENS A, LL C, 497 F. 3d 355, 362- 63 ( 3d C i r . 2007); Par i l l a, 368 F. 3d at275; A l exande r , 341 F. 3d at264. V i r gi n I s l ands s t atut o ryl aw “mandat es that w e turn t o ‘ t he rul es of the comm on l aw , as expr es s ed i n t he r es t at em en ts of the l aw appr oved byt he A m er i can Law I ns t i tut e’ ” i n eval uat i ng w hethert he pr ovi s i ons of an a rbi t r at i on agr eementar e unconsc i onabl e. A l exande r , 341 F. 3d at 264 ( quot i ng 1 V

. I

. C ode A nn. § 4)

. Sect i on 208 of the R es t at ement( Second) of C ontr act s pr ovi des t hat “[i ] f a c ontr act o r te rm th e r e o f

is u n c o n sc io n a b le a t th e tim e th e c o n tra c t is m ade a cour t m ay r efus e t o enfor ce the contr act , orm ayenfor ce t h e r e ma i n d e ro f

t h e c o n t r a c t wi t h o u t t h e u n c o n s c i o n a b l e t e r m, o r m a yso lim it th e a p p lica tio n o f a n yu n c o n sc io n a b le te rm a s to avoi d anyuncons ci onabl e r es ul t

. ” U nderV i r gi n I s l ands l aw , “[t ] he doctr ine of uncons ci onabi l i t yi nvol ves both ‘ pr ocedur al ’ and ‘ s ubs t ant i ve’ el ement s . ” Edw ar ds , 497 F. 3d at362 ( ci t at i on om i t t ed)

. T he p ro c e d u ra l c o m p o n e n t o f th e u n c o n sc io n a b ili tyin q u irylo o k s to t he “pr oces s by w hi ch an agr eement i s r eac hed and the form of an agr eemen t, inc l udi ng the us e ther ei n of fi ne pr i ntand convol ut ed oruncl earl anguage . ” A l exande r, 341 F. 3d at265 ( ci t at i on om i t t ed)

. W e have cons i s t ent l yfound thatadhes i on contr act s

— t hati s , contr act s pr epar ed bythe part yw i t h gr eat er b arg ainin g p o w er a n d p rese n ted to the o ther pa rty“f o r si g n ature on a t ake- i t

- or - l eave - i tbas i s ”— s at i s fythe p r o c e d u r al el ementof t he u nco nsci on abil i t yanaly si s. Id. (ci t atio n o m i t t ed); see al so E d w a rd s, 4 9 7 F .3 d a t 3 6 2 ; P a rilla, 3 6 8 F .3 d a t 2 7 6 . “A c o n tra c t, h o w e v e r, is ‘n o t u n c o n sc io n a b le m e re lyb e c a u se th e p a rtie s to- 14- i tar e unequa l i n bar gai ni ng pos i t i on. ’ ” A l exande r , 341 F. 3d at 2 6 5 (qu o ti n g R estatem en t (S ec o n d ) o f C o n tr ac ts § 2 0 8 cm t. d ). In ste ad, a partychall eng i ng a con t racton un con sci on abil i ty g ro u n d s m u st a lso sh o w th a t th e c o n tr a c t is su b sta n tiv e ly unco n s c i o n a b l e b yd e mon s t r a t i n g t h a tt h e c o n t r a c tc o n t a i ns “t erm s unr ea s onabl yfavor abl e t o the s t r ongerpar t y . ” I d. (c itatio n o m itt e d ). W ith th e se p rin c ip les in m in d , w e tu rn to N i no’ s uncons ci onabi l i t ychal l enge t o t he arbi t r at i on agr eement ati s s ue i n t hi s cas e. B. Lo o k i n g f

i r s tt o t h e q u e s t i o n o f p r o c e dur al uncons ci onab il i t y , w e agr ee w i t h t he D i s t r i ctC our tthatN i no h ad n o o p p o rtu n ityto n eg o ti ate w ith D I ov er the co n tr ac t’ s t erm s , t h at D I w as t he s t r ongercontr actual par t y , and thatt he a rbi t rat i on agreem ent i s thu s procedu ral l yun con sci on able. F i rs t a n d mo s ts i g n i f

i c a n t l y , a s t h e Di s t r i c tCo u r te x p r e s s l yf o u n d , DI pr es ent ed the arbi t r at i on agr eement t o N i no “fors i gnatur e on a t ake- i t

- or - l eave - i tbas i s . ” Id. at266 ( ci t at i on om i t t ed)

. A s N i no e x p lain e d in h is d e p o sitio n , d u rin g h is f irst w e e k a t th e S t. T h o m a s s to re , D I’s h u m a n re so u rc e s m a n a g e r p ro v id e d h im w i t h a copyof the company ’ s empl oym entcont r actand i ns t ruct ed hi m t o “r ead i tand s i gn i t , ” ( S. A

. at18) , w i t hout a f f o r d i n g h i m a n yo p p o r tu n i t yt o n e g o t i a t e o v e ri t s t e r ms . As th e D istric t C o u rt e x p lain e d , “ N in o w a s g iv e n n o re a so n a b le c h o ic e in a c c e p ti n g th e c h a lle n g e d A rb itr a tio n A g re e m e n t.” (J. A

. at 13

. ) M or eover , a s i gni fi cantdi s par i ty in bar gai ni ng pow er e x i s t e d b e t we e n Ni n o a n d DI

. As wa s t h e c a s e i n Al e x a n d e r , DI i s a l ar ge corpor at i on t hat “conduc t s bus i nes s t hr ougho u t theW e paus e t o not e an addi t i onal conce r n undert he 4 pr ocedur al uncons ci onabi l i t yanal y s i s . W e have r ecogni zed that a p a rtym a ysh o w th a t an a g re e m e n t is p ro c e d u r a lly uncons ci onabl e w her e t he agr eementi s s o “convol ut ed” thatt he par t ycoul d nothave know n w hati tw as thathe w as agr eei ng t o.

- 15- nat i on and t he w or l d, [and i t ] cl ear l ypos s es s ed more bar gai ni ng pow er ” than di d N i no, a s i ngl e, r et ai l -l ev el empl oy ee. A lexa n d er, 34 1 F

. 3 d at 26 6

. D I li k en s N ino ’s ca se to Z im m er, i n w hi ch w e hel d t hatan em p l oym entcontr actw as not pr ocedur al l y uncons ci onabl e w her e t he em pl oy ee- pl ai nt i ff w as

“ a H a r va r d- edu c a t e d e c on omi s t , pr e vi ou s l ye mpl oy e d b yJ

. P. M or gan C has e and the Feder al R ese rve B ank of N ew Y or k” wh o wa s we i g h i n g “ mu l t i p l e o f f e r s o f emp l o yme n ta tth e t i me he ac cep ted [d efe ndant ’ s ] j ob offe r . ” 523 F. 3d at229. A l t hough N i no, as a col l ege gr aduat e, w as bet t ereduca t ed than w ere the pl ai nt i ffs i n A l exande r , w e ca nnotagr ee w i t h D I that N in o ’s b a rg a in in g lev e ra g e w a s e v e n re m o telyc o m p a ra b le to that o f th e p lai n ti ff

in Z im m er. A s the D istri ct C o u rt re c o g n ize d , N in o w a s d e p e n d e n t u p o n D I “ w ith re sp e c t to h is i mm i g r a t i o n s t a tu s a tt h e t i me h e a c c e p t e d t h e j o b o f f e r . ” ( J

. A. at13. ) Q ui te unl i ke the pl ai nt i ff i n Z i m m er , w ho w as fi el di ng a h o st o f

e m p lo ym e n t o f

f e rs a t th e tim e h e n e g o ti a ted h is co n tr ac t w ith the d ef

en d an t, N ino d ep en d ed u p o n D I f o r his v ery capa ci t yt o w or k i n St

. T hom as , w her e he ha d j us tbeen t r ans ferr ed. G i ven thatt he contr actw as pr es ent ed t o N i no on a t ake- i t- or - l eave - i tbas i s , and gi ven the di s par i t yi n bar gai ni ng pow erbetw een the tw o par t i es a t the t i m e the contr actw as s i gned, w e agr ee w i th N i no and the D i s t r ic tC our tthatthe arbi t r at i on agr e e me n ti s p r o c e d u r a l l yu n c o n s c i onabl e. 4Z im m e r, 5 2 3 F

. 3 d at 22 8

. In th is case , the c o n tr ac t and D I’s empl oy ee handbook cont ai n di s par at e di s put e r es ol ut i on m e c h a n ism s w ith c o n f

lictin g d e a d lin e s an d o th e r irre c o n c ilab le d if f e re n c e s. W e f

in d it h a rd to im a g in e th a t an e m p lo y e e in N in o ’s p o sitio n re a d in g th e se c o n tr a d icto rym a ter ials c o u ld r eal i s t i cal l yunder s t and w hats or tof di s put e r es olut i on m echa ni s m he w as agr eei ng t o. H ow ever , beca us e the pa r t i es bar el yaddr es s t hi s poi nt

— i ndeed, N i no r ai s es i tonl yi n pas s i ng i n hi s r epl ybr i ef— w e do notr es tourpr ocedur al uncons ci onabi l i t yhol di ng on the convol ut ed natur e of the a g re e m e n t.

- 16- See A l exande r , 341 F. 3d at265. C. W e lik e w ise c o n c lu d e th a t th e a rb itratio n a g re e m e n t is s u b s t a n t i v e l yu n c o n s c i o n a b l e b e c a u s e i tc o n t a i n s t e r ms u n rea so n ab lyfa v o rab le to D I, the str o n g er p arty

. S ee Z im m er, 5 2 3 F .3 d a t 2 2 8 (“ S u b s ta n tiv e u n c o n sc io n a b ili tylo o k s to w h e th e r th e a rb itratio n p ro v isio n u n re a so n a b lyf a v o rs th e p a rty a s s e r t i n g i t

. ” ) ( q u o t a t i o n m a r k s a n d c i t a t i o n o m i t t e d )

. We a d d re s s th e s e u n re a s o n a b le c o n tr a c t te rm s in tu rn b e lo w . Fi r s t , w e agr ee w i t h N i no and t he D i s t r i ct C our t t hatt he a rb itrati on agreem ent’ s prov isio n re q u irin g th a t an e m p lo y e e f ile a g rie v a n c e w ith in f

iv e d a y s o f

th e c o m p lain e d -o f

in c id e n t in o rd e r to p re se rv e h is o r h e r o p p o rtu n ityto a rb itrate th e d isp u te i s s ubst ant i vel yuncons ci onabl e. W e have t w i ce he l d i n no uncert ai n t erm s t hat a thi r t y - dayfi l i ng r equi r ementi n an a rb i t r a t i o n a g r e e me n t i s s ubs t ant i vel yuncons ci onabl e.- 17- S e e P a r i l l a , 3 6 8 F

. 3 d a t 2 7 7

- 7 8 ; Al e x a n d e r , 3 4 1 F

. 3 d a t2 6 6

. As w e expl ained i n A l exande rand r ei t er at ed i n Par i l l a, w hi l e “a pr ovi s i on l i m i t i ng t he t i m e t o br i ng a cl ai m orpr ovi de not i ce of s uch a c l ai m t o t he def endanti s notnece s s ari ly u nfai ror ot herw i s e unconsc iona bl e, ” the t i m e per i od des i gnat ed bythe agr eementm us ts t i l l be r eas onabl e. A l exande r , 341 F. 3d at266; acc or d P aril la, 368 F. 3d at277- 78. A thi r t y - dayfi l i ng per i od, w e m a d e c lea r in b o th c a se s, is “ c lea rly u n re a so n a b le a n d u n d u ly favor abl e” t o t he empl oy er . A l exande r , 341 F. 3d at266. If a th ir ty-d a yf

ilin g w i n d o w is “ c le a rl yu n re a s o n a b le ,” i d. , t hen t he five-day fi l i ng requi rem ent i m po sed bythe p art i es’ contr act in this cas e i s even mor e undul yfavor abl e t o D I t han w er e the agr eement s at i s s ue i n A l exande r and Par i l l a. I ndeed, th e f ili n g re q u ire m e n t in N in o ’s a rb itratio n a g re e m e n t is par t i cul ar l y unr eas onabl e becaus e i t i s bot h i nfl exi bl e and one

s i ded. W i t h r egar d t o i t s i nfl exi bi l i t y , t he agr eements t at es t hat i t s fi l i ng r equi r ement s “ar e bi nd ing and maynotbe w ai ved e x c e p tb ywr i t t e n a g r e e me n t o f b o t h p a r t i e s . ” ( J

. A. a t 8 2

. ) As w e have expl ai ned, s uch a pr ovi s i on enhanc es the unfa i r nes s of t he narr ow fi l i ng w i ndow beca us e i t“pr event s an empl oy ee f ro m in v o k in g th e c o n tin u in g v io la tio n a n d t o llin g d o c tr in e s .” A l exan der, 34 1 F

. 3d at 26 7 (ci t i ng Ingl e v. C i rcui tC i t yS t ores, I nc. , 328 F. 3d 1165, 1175 ( 9th C i r . 2003) ) ; s ee a l s o Par i l l a, 368 F. 3d at277. T he one- s i ded natur e of t h e fi ve- dayfi l i ng req u ir em en t ex ac erb ates this u n fa irn ess. A s in A lexa n d er, D I’s “unfa i radvant age i s onl ycompounded by t he fa ctt hat[D I i t s el f] i s appar ent l ynot r equi r ed t o pr ovi de det ai l ed and w r i t t en not i ce to a n e m p lo y e e o f

a n yo f its o w n c laim s w ith in a stric tly enfor ced [ fi ve]

- dayt i m e per i od. ” A l exande r , 341 F. 3d at267. I ndeed, t he arbi t r at i on agr eementi n t hi s cas e i m pos es no not i ce- 18- r equire m entupon D I w hat s oever . M or eover , w hi l e an empl oy ee’ s fai l ur e t o ad h ere t o t he s t r i ctfi ve- dayfi l i ng r equi r ementam o u n ts t o a def aul ton hi s cl ai m s , the agr eement expr es s l yi ns ul at es D I fr om anyr i s k of def aul t

— undert he agr eement , i f D I fai l s t o pr oces s an empl oy ee’ s gr i evanc e i n a t i m el ym anner , “the l as t deci s i on gi ven by [D I ] s hal l be a f i nal and bi ndi ng r es ol ut i on of t he gri evanc e. ” (J

. A

. at82. ) T he ones i ded f i v e - dayfi l i ng r equi r ementi s m ani fes t l yunr eas onabl e and i s s u b s t a n t i v e l yu n c o n s c i o n a b l e u n d e rVi r g i n I s l a n d s l a w. Par i l l a, 368 F. 3d at278; A l exande r , 341 F. 3d at266. N i no l i kew i s e ar gues , and the D i s t r i ctC our t found, that t he arbi t rat i on agr eement ’ s r equi r ementt hatt he part i es bear th e ir o w n a tto rn e y ’s f

e e s, c o sts , an d e x p e n se s is su b sta n tiv e ly uncons ci onabl e. W e agr ee. A s w e have expl ai ned: I ti s w e l l e s t a b l i s h e d th a ta rb i t r a t i o n i s m e r e l y a choi ce of di s put e r es ol ut i on and does noti nfr i nge u p o n sta tu to ryp ro tec tio n s. T h e re f o re , if arbi t r at i on i s t o offe rcl ai m ant s t he ful l s cope of re m e d ies a v a ilab le u n d e r T itl e V II, a rb itrato rs in T i t l e V I I cas es , j us tl i ke court s , m us t be gui ded by Chr i s t i a ns bu r g [Garment Co. v. EEO C, 43 4 U. S. 412, 417 ( 1978) , ] and mustordin ar i l ygr ant at t or neyfee s to pr evai l i ng cl ai m ant s r atherthan be r es t r i ct ed bypr i vat e contr actual l anguage . Spi net ti , 324 F. 3d at216 ( i nt ernal quot at i ons and ci t at i ons om i t t ed) ; Par i l l a, 368 F. 3d at 279 ( s ame) ; A l exande r , 341 F. 3d a t 2 6 7 (s a m e ). Pr ovi s i ons i n arbi t r at i on cl aus es r equi r i ng par t i es t o bear t hei row n at t or ney ’ s fee s , cost s, and expe ns es w or k t o “the- 19- d is a d v an tage o f a n em p lo y e e n e e d in g to o b ta in le g a l a s s is ta n c e .” A l exande r , 341 F. 3d at 267. Such pr ovi s i ons al s o underm i ne the l egi s l at i ve i nt entbehi nd fee

- s hi ft i ng s t atut es l i ke T i t l e V I I

. C f. H ackw el l v. U ni t ed S t at es , 491 F. 3d 1229, 1240 ( 10t h C i r . 2007) ( “Ti t l e V I I ’ s fee

- s hi ft i n g p r o v i s i on, 42 U

. S. C

. § 2000e- 5( k) , w as inten d ed to en co u rag e p ri v ate c it izen s to e n fo rce the s ta tu te’s guar ant ees and [] i f s ucce s s ful pl ai nt i ffs w er e fo rced t o bear t hei row n at t or ney s ’ fee s , few aggr i eved pa r t i es w oul d be i n t he pos i t i on t o advanc e the publ i c i nt er es t

. ”) ( ci ti n g H

. R

. R ep. 1 0 2 -40 (I) , C i vi l R i ght s A ctof 1991 ( A pr . 24, 1991) )

. T he a rb itratio n a g re e m e n t’ s r e stric tio n o n th e a rb itrato r’s a b ili tyto a w a rd a tto rn e y ’s f

e e s , c o sts , an d e x p e n se s is su b sta n tiv e ly uncons ci onabl e, as t he D i s t r i ctC our tcorr ect l y concl uded. See Spi net t i , 324 F. 3d at216. Fi nal l y , w e tur n t o t he arbi t r at i on agr eement ’ s pr ovi s i on g o v e rn in g th e se lec tio n o f a n a rb itrato r, w h ich N in o c o n ten d s is su b sta n tiv e ly u n c o n sc io n a b le. U n d e r th e a rb itratio n a g re e m e n t, if an empl oy ee manages t o navi gat e the l abyr i nth of r equi r ement s for fi l i ng and r efi l i ng gr i evanc es i n or der t o m ake a r eques tforarbi t r at i on, D I i s r equi r ed t o s ubm i t a r eques tt o t he A A A f o r a p a n e l o f f

o u r arb itrato rs. T h e p a rties se lec t a s in g le arbi t rat or fr om t his l i staccording t o the foll ow i ng process: F rom t he p anel the E m ploy er w i l l stri ke the fi rs t arbi t rat or for w hatever reas on i s un accep t ab le to t he E m p loy er . T he Em pl oy ee w i l l then be al l ow ed t o s t r i ke one a rbi t r at orfr om the rem ai ning nam es of p anel m em bers. T his process w i ll cont i nue unt i l ther e r emai ns one arbi t r at or w ho w i l l be t he arbi t r at or for t hi s gr i evanc e ort he par t i es can de ci de on an a rb itr at orthatw oul d be- 20- m u tu a lly a c c e p ta b le

. (J

. A

. at81

. ) A l t ho ug h i t i s p hrased i n neu t ral , proced ural t erm s, t h e u p s h o to f t h i s p r o v i s i o n i s t h a t DI i s p e r mi t t e d t o s t r i k e t wo arbi t r at or s fr om t he four

- m emberA A A panel , w her eas the e m p lo y e e is p e rm itte d to s tr ik e ju s t o n e . T hi s pr ovi s i on i s “one- s i ded i n t he extr eme and unr eas onabl yfavor abl e t o [D I ]

. ” A l exande r , 341 F. 3d at267. It con fers an advan t age upo n D I for no dis cerna b le p u rpose ot hert han t o s t ack the dec k i n i t s favor

. C our t s of A ppeal s have nothes i t at ed t o concl ude that p rov i s i ons i n arbi t r at i on agr eement s t hatg ive t he empl oy eran unr eas onabl e adva nt age o v er the em p loy ee in the s elec ti o n o f a n arb itrator are un con sci o n a b le, s ee, e. g, H oo t ers of A m eri ca, Inc. v. P hil l i ps, 1 7 3 F .3 d 9 3 3 , 9 4 0 (4 th C ir. 1 9 9 9 ), a n d w e h a v e c o n s iste n tly re c o g n ize d th a t ar b itratio n p ro v isio n s th a t co n f e r a n “ u n f

a ir ad v an tag e ” u p o n the p artyw ith g rea ter ba rga ining p o w er a re s u b s t a n t i v e l yu n c o n s c i o n a b l e , Al e x a n d e r , 3 4 1 F

. 3 d a t 2 6 7

. “ By a g re e in g to a rb itratio n in lieu o f lit ig a tio n , the p a rties a g re e to t r ade the pr ocedur es and oppor tuni t yforr evi ew of the cour t r oom fort he s i m pli ci t y , i nform al i t y , and expe di t i on of a rb itrat i on , ” bu tt heydo no tacced e t o p rocedu res “utt erl y l acki n g i n t h e ru d i me n t s o f e v e n - h a n d e d n e s s . ” M u r r a yv. U ni t ed Food & C om m er ci al W or ker s I nt ern. , 289 F. 3d 297, 303 (4 th C ir . 2 0 0 2 ) ( in te rn a l q u o ta tio n s a n d c ita tio n s o m itte d ). D I advanc es s ever al ar gum ent s i n defe ns e of the a rb itrato r se lec tio n p ro v isio n , all o f w h ich a re th o ro u g h ly unconvi nci ng. Fi r s t , D I c o nt ends thatbeca us e the agr eement p ro v id e s a se c o n d a rym e th o d f o r se lec tin g a n a rb itrato r— it perm i t s t he part i es s i m pl yt o agr ee upon “a n arbi t r at orthat- 21- w oul d be mut ual l yacc ept abl e, ” ( J

. A

. at81)

— t he s el ec ti on pr oces s does not unr eas onabl y favor D I

. T hi s ar gum enti nvi t es u s to c o n c lu d e th a t b e c a u se th e a g re e m e n t a u th o riz e s D I n o t to us e the adva nt age i thol ds i n the one- s i ded arbi t r at ors el ect i on p ro c e ss , the p ro c e ss c a n n o t b e c o n sid e re d u n re a so n a b ly f a v o ra b le to D I. S u c h re a so n in g w o u ld p ro v id e c o ld c o m f o rt to a n e m p lo y e e w h o is u n a b le to a g re e w ith D I u p o n a “ m u tu a lly a c c e p tab le” a rb itrato r, (id .), a n d it d o e s n o t d im in ish th e u n f a ir a d v antage accorded t o D I over the sel ect i on of an arbi t rat or if t he part i es do notr eac h s uch an agr eement

. T he pr es ence of an al t ernat i ve av enu e for sel ect i ng an arbitrat or do es not r end er l ess unfai rt he one- s ided m echa ni s m s etfor t h i n the arbi t r at i on a g re e m e n t. D I next s ugges t s t hatbeca us e “the pane l i s compri s ed of neutr al , i m par t i al arbi t r at or s , as m us t be pr es um ed, D I w i l l not g a in a n yb e n e f

i t b yh a v in g a n a d d itio n a l s tr ik e .” (D I B r. 1 6 .) W e ca nnot agr ee. D I i s of cour s e cor r ectt hatt he pane l i s t o be compri s ed of a rbi t r at or s w i t h no connec t i on t o, ori nt er es ti n, t he par t i es ordi s put e athand. T h e A A A ’ s rul es r equi r e that “[n] eutr al arbi t r at or s s ervi ng undert h ese rul es . . . have no p e rso n a l o r f

in a n c ial in ter e st in th e re su lts o f th e p ro c e e d in g in w hi ch theyar e appoi nt ed and .

. . have no r el at i on t o the under l y i ng di s put e ort o the part i es ort hei rcounsel tha tm ay cr eat e an a ppear ance of b ias

. ” See A m er i can A rbi t r at i on A s s oci at i on, E m pl oym entA rbi tr ati on R ul es and M edi at i on P roc e d u r e s , R u l e 12( b )(2), ht tp: //w w w . adr

. o r g/ s p. as p?i d=32904#12 (l as tvi s i t ed J une 14, 2010)

. B ut t he fac t t hat pot ent i al arbi t r at or s ar e pr e- s cr eene d for per s onal orfi nanci al i nt er es t s i n t he contr over s ydoes notm ean t hata part yder i ves no benef i tfr om havi n g a gr eat eri nfl uence- 22- ov er the arbi t r at ors el ect i on pr oces s . T he abi l i t yt o s t r i ke p o tential arb itrators f

rom the p an el i s ak in to a p e re m p tory chal l enge i n j ur y s el ect i on— i t enabl es the part i es t o el i m i nat e an arbi t r at orw hos e “s ym pathi es ” appe art o al i gn w i t h one s i de or a n o th e r , e v e n if

th e p o ten tial a rb itrato r is n o t p e rso n a lly connec t ed t o t he contr over s yorbi as ed aga i ns ta part y . J

. E

. B

. v. A la b a m a e x re l. T .B ., 5 1 1 U .S . 1 2 7 , 1 4 8 (1 9 9 4 ) ( O ’C o n n o r, J ., c o n c u rrin g ). Ju st a s n o e x p e rie n c e d trial la w y e r w o u ld d isp u te t hat“[t ] he per empt or y chal l enge i s ‘ an i m por t ant as pectof tr i al b yju ry ,’” th e a b ili tyto strik e p o ten tial a rb itrato rs u n d o u b ted ly conf ers a benef

i t , even i f the arbi t r at i on panel i s composed of di s i nt ere s t ed and unbi as ed ca ndi dat es . D arbi n v. N our s e, 664 F. 2d 1109, 1113 n. 4 ( 9th C i r . 1981) ( quot i ng R os al es - L opez v. U n ited S tate s, 4 5 1 U .S . 1 8 2 , 1 8 8 n .6 (1 9 8 1 )). In d e e d , itw o u ld be di ffi cul tt o under s t and t he poi ntof i ncl udi ng i n the arbi t r at i on agr eementa m ec hani s m fors t r i ki ng pot ent i al arbi t r at or s i f the p arti es d id n o t stan d to b en ef it fro m the e x erc ise. W e the ref o re r ej ectD I ’ s s uggest i on thati tw oul d der i ve no bene fi tfr om exer ci s i ng i t s contr actual r i ght t o s t r i ke t w i ce as m anypot ent i al arbi t r at or s as N i no. Fi nal l y , D I pr opos es that , r ather t han det erm i ni ng t hatthe a rb itrato r se lec tio n c lau se is u n c o n sc io n a b le, w e sh o u ld sim p ly

“ a l t e r [ ] t h e t e r ms [ o f t h e a rb i t r a t i o n a g r e e me n t ] s o t h a tt h e AAA s u p p l i e s a p a n e l o f f

i v e ( 5 ) a rb i t r a t o r s i n s t e a d o f f o u r( 4 )

. ” ( DI B r. 1 6 .) O u r p re c e d e n t f o r e c lo s e s s u c h a n a p p ro a c h , an d w ith good r eas on: [Sect i on] 2 0 8 of the R es t at ement( Second) of C ont r act s pr ovi des t he rul e of de ci s i on her e. T hat s ect i on pr ovi des , i n r el evantpart , that “[i ] f a contr actort erm ther eof i s uncons ci onabl e attheN i no fur t her cont ends t hataddi t i onal pr ovi s i ons of the 5 agreem ent are l i kew i se un con sci on able. W e do no t f in d th ese ad d it ion al p ro v isi o n s to b e u n rea so n ab le, an d w e the ref o re m ent i on them onl ybr i efl y . Fi r s t , N i no s ugges t s thatthe agr eement ’ s pr ovi s i on r equi r i ng t hat t he arbi tr at i on t ake pl ace at D I ’ s pl ace of bus i nes s i s s ubs t ant i vel yunconscion abl e. Such pr ovi s i ons ar e n o t uncom m on i n arbi t r at i on agr eement s , s ee, e. g. , R i dge atR ed H aw k, L

. L

. C

. v. Schn eide r, 493 F. 3d 1174, 1 1 7 5 (1 0 th C ir. 2 0 0 7 ), an d w e d o n o t ag re e th a t th is ter m is

- 23- tim e th e c o n tra c t is m a d e a c o u r t m a y ref u se to enfor ce the contr act

. ” R es t at ement§ 208 (em ph asi s added ). A ccordi ng l y , w e m ust det erm i ne unco n sci onabi l i t yas of the t i m e the c o n tra c t w a s f

o rm e d , an d a n a f

ter -th e -f a c t o f f e r to w ai ve ce r t ai n contr actpr ovi s i ons can ha ve no effect on o ur anal y si s. Par i l l a, 368 F. 3d at285 ( emphasi s i n or i gi nal )

. A n arbi t r at i on agr eement i n an empl oym ent contr act does not , i n t he cont extof l i t i ga t i o n , b e c o me t h e e mpl o y e r ’ s o p e n i n g b i d i n a n e g o t i a t i on w ith the e m p loy ee o r th e c o u rto v er the ag ree m en t’ s uncons ci onabl e t erm s . A s w e have expl ai ned, “[b] eca us e the e m p lo y e r d ra f

ted th e a rb itratio n a g re e m e n t, th e e m p lo y e r is s a d d le d w ith th e c o n s e q u e n c e s o f th e p ro v i s i o n a s d ra f

te d .” S p in e tti , 3 2 4 F .3 d a t 2 1 7 -1 8 n .2 (c itatio n o m itt e d ). D I’s e f f o rts t o d e f e n d t h e a rb i t r a t o r s e l e c t i o n c l a u s e a r e u n a v a i l i n g , a n d we concl ude thatt he cl aus e, l i ke t he fi ve- day fi l i ng w i ndow and the pr ovi s i on r equi r i ng par t i es t o b earthei row n fee s , cos t s , and expens es , i s s ubs t ant i vel yuncons ci onabl e. 5undul yunfavor abl e t o D I

. N i no l i kew i s e ar gues t hata pr ovi s i on i n t h e a g r e e me n t r e q u i r i n g t h e p a r t i e s t o e v e n l y s h a r e t he arbi t r at or ’ s and s t enogr apher ’ s fee s i s uncons ci onabl e. I n or der t o ch all enge s uch a pr ovi s i on, a pl ai nt i ff musts how w hatthe arbi t r at or ’ s fee s w oul d l i kel yamount t o, and N i no m ade no s uch s how i ng. See A l exande r , 341 F. 3d at 269. Fi nal l y , N i no t akes is s u e w ith th e a g re e m e n t’ s re q u ir e m e n t th a t “[ t] h e a rb itr a to r . .

. i nterpret , app l yand be b ou nd by t he E m ploy er’ s rules , re g u latio n s, p o licie s a n d p ro c e d u re s a s w e ll as a p p lica b le fede r al , s t at e, l ocal and comm on l aw . ” ( J

. A

. at 82. ) N i no s ugges t s t hatt hi s pr ovi s i on r equi r es t he arb i t r at ort o enfor ce D I ’ s rul es , even i f thos e rul es ar e unl aw ful. W e do not a g re e

— th e a g re e m e n t d o e s n o t su g g e st th a t th e a rb itrato r w o u ld b e b o u n d to e n f

o rc e a n u n la w f

u l e m p lo ym e n t p o lic y .

- 24- D. O u r f in a l tas k in a d d re ss in g N in o ’s u n c o n sc io n a b ili ty chal l enge t o t he arbi t r at i on agre em enti s t o det erm i ne w hether t he uncons ci onabl e t erm s m ay be s ever ed fr om t he ag ree m ent s uch thatt he r emai nderof i t s t erm s m aybe enf or ced. A s the R es t at em en t ( S ec o n d ) of C o n tr ac ts ex p lai n s, w h ere asp ect s of an agr eement ar e unenfor cea bl e, “a cour t m ay nevert hel es s enfor ce t he re s t of the agr eementi n favorof a pa r t yw ho di d notengage i n s erious m i s conducti f the per form ance as t o w hi ch the agr eementi s unenfor cea bl e i s not an ess ent i al partof the agr eed e x c h a n g e . ” R e s t a t e m e n t( S e c o n d ) o f C o n t r a c t s § 1 8 4 ( 1 )

. We have f r equent l yemphasi zed t hat det erm i ni ng w hetherornott he uncons c i o n ab l e p r o v i s i ons of an a rbi t r at i on agr eements houl d be se v e re d “ re q u ire s m o re th a n a c o u n t o f th e u n c o n sc io n a b le- 25- p ro v isio n s,” a n d in ste a d c a lls f o r an e x a m in a tio n o f

th e sp e c if

ic “natur e of t he pr ovi s i ons ” t hemsel ves . Par i l l a, 368 F. 3d at286. A s w e r eco g n ized mostr ece nt l yi n Par i l l a, t w o l i nes of i nqui r yar e r el evantt o t he ques t i on of s ever abi l i t y . T he fi r s tof t hes e i s w hethert he uncons ci onabl e as pect s “of the empl oym ent arbi tr ati o n ag ree m en t con sti tute[] ‘an esse n ti al pa rto f th e agr eed excha nge’ of promi s es ” bet w een the part i es . Spi net t i , 324 F. 3d at 21 4 (qu o ti n g R estatem en t ( S ec o n d ) of C o n tr ac ts § 1 8 4 (1)). I f the uncons ci onabl e as pect s of t he cl aus e do notcompri s e an es s ent i al as pectof the arbi t r at i on agr eementas a w hol e, t hen the uncons ci onabl e pr ovi s i ons m ay be seve r ed and t he r emai nderof t he arbi t r at i on ag ree m entenfor ced. See i d. “W hethert he per form ance i s an ess ent i al par t of t he agr eed e xchange depends on i t s r elati v e impor t ance i n t he l i ghtof the ent i r e agr eement betw een the par t i es . ” R es t at ement ( Second) of C ontr act s § 184, cmt

. a. T h e s e c o n d c o n s i d e r a t i o n f o rth e q u e s tio n o f

s e v e r a b i l i t y, w hi ch w e di s cus s ed i n A l exande rand el abor at ed upon i n Par i l l a, i s w hethe rt he un c on s c i on a bi l i t yof t he a rbi t r a t i on c l a us e demon s t r a t e s “ a s y s t e ma t i c e f f o r t t o i mpo s e a rb i t r a t i o n o n an empl oy ee, nots i m pl yas an al t ernat i ve t o l i t i gat i on, butas an i nfer i orforum t hatw or ks t o t he em pl oy er ’ s advant age. ” Par i l l a, 36 8 F. 3d at 28 8 ( qu oti ng F erguson v. C ou ntryw i de C re d it Indus. , Inc. , 29 8 F

. 3 d 77 8, 78 7-88 (9t h C i r. 20 02 )) ; see al so A l exande r , 341 F. 3d at271. Putdi ffe r ent l y , “a mul t i tude of u n c o n sc io n a b le p ro v isio n s in a n a g re e m e n t to a rb itrate w ill pr ecl ude s ever ance and en for cementof arbi t r at i on i f they evi dence a del i ber at e att empt byan em p loy er t o i m pos e an arb itrati o n sch em e d esig n ed to d isco u rag e a n em p loy ee ’s reso rt to arb itrati o n o r t o p rod u ce resu lt s b iased in the em p loyer’s- 26- favor

. ” Par i l l a, 368 F

. 3d at289; s ee a l s o, e. g. , N agr ampa v. M ai l C oups , I nc. , 469 F. 3d 1257, 129 3 -94 ( 9th C i r . 2006) ( en b a n c ) ; Ho o t e r s , 1 7 3 F

. 3 d a t9 3 9

- 4 0 ; Gr a h a m Oi l Co

. v . ARCO P r o d u c t s C o . , 4 3 F

. 3 d 1 2 4 4 , 1 2 4 8

- 4 9 ( 9 t h C i r . 1 9 9 4 )

. As we expl ai ned i n Pa ri l l a, the pr i nci pl e of f or ecl os i ng s ever ance w h e re th e c o n tra c tu a l term s d e m o n stra te a sy ste m a tic e f f o rt to cr eat e a one- s i ded, empl oy er - fr i endl y forum i s der i ved fr om t he “equi t abl e overr i de pr ovi s i on of the R es t at ement

. ” 368 F. 3d at 288. U ndert hatpr ovi s i on, even i f “‘ di s r egar d of [i l l egal p ro v is io n s ] w ill n o t d e f e a t th e p ri m a ry p u rp o s e o f th e b a rg a in ,’ enfor cementof the bar gai n w i l l be deni ed i f the per s on s eeki ng i thas been ‘gu i l t yof s er i ous m or al turpi tude, ’ R es t at ement ( Fi r s t ) of C ont r act s § 603, or ‘ s er i ous m i s conduct , ’ R es t at ement (S e c o n d ) o f

C o n tr a c ts § 1 8 4 (1 ).” Id . a t 2 8 9

. T hes e tw o cons i der at i ons pr ovi de s epar at e and in d e p e n d e n t b a se s f

o r d e c lin in g to se v e r th e u n c o n sc io n a b le pr ovi s i ons fr om an arbi t r at i on agre ement

. T hati s , i f the uncons ci onabl e pr ovi s i ons compri s e es s ent i al as pect s of the agr eement as a w hol e, or i f t he agr eement demonstr at es t hatthe empl oy ers oughtt o i m pos e arbi t r at i on on the empl oy ee a s an inf erior, on e -s ided fo rum that w o rke d to the em p loy er’s a d v a n tag e , th e n se v e ra n c e o f th e u n c o n sc io n a b le p ro v isio n s is notcal l ed for , an d the courts houl d decl i ne t o enfor ce the arb itrati o n ag ree m en t in i ts en ti rety

. S ee id. at2 8 8 ; A lexa n d er, 3 4 1 F .3 d a t 2 7 0 -7 1

. W e n e e d n o t d isc u ss w h e th e r th e u n c o n sc io n a b le pr ovi s i ons of the pa rt ies ’ arbi t r at i on agr eementcompri s e an e s s e n t i a l a s p e c to f

t h e a g r e e me n ta s a who l e , b e c a u s e we concl ude thatt he one- s i ded natur e of t he arbi t r at i on agr eement r evea l s unm i s t aka b ly t hatD I “w as nots eeki ng a bona f i de- 27- m e c h a n ism for di spute r esol uti on , bu trather soug ht t o im po se a sc h e m e th a t itk n e w o r sh o u ld h a v e k n o w n w o u ld p ro v id e it w i t h an i mpe r mi s s i b l e a d v a n t a g e . ” Pa r i l l a , 3 6 8 F. 3 d a t2 8 9. T he pr o v isi o n s i n ques t i on do nots i m pl yacc or d an adva nt age u p o n D I in d ire c tly o r b yh a p p e n sta n c e . In ste a d , the ya re b a ld ly o n e -sid e d , w ith o n lyo n e d isc e rn a b le p u rp o se

— to c re a te advant ages fort he employ erthatar e notaff or ded t o t he empl oy ee. O f the fourm ember s of the arb it rati on panel , t he agr eementperm i t s D I t o s t r i ke tw o and the empl oy ee t o s t r i ke j us tone. T he empl oy ee i s r equi r ed t o gi ve not i ce t o D I of the cl ai m s he i nt ends t o arb it r at e, w hi l e D I i s underno s uch obl i gat i on t o pr ovi de anynot i ce t o the empl oy ee. T he empl oy ee m u st f il e a d e taile d g rie v a n c e re g a rd in g th e m a tter h e se e k s to arbi t r at e w i t hi n fi ve day s of the under l y i ng event s orl os e the ri gh tt o g o to arbitrat i on al t og et her, w hil e D I i s i nsulat ed ag ai nst t he r i s k of de fa ul tforanyfai l ur e t o adher e t o i t s ow n fi l i ng deadl i nes . T hes e pr ocedur es pr ovi ded D I w it h an “i mpermi s s i bl e a dv a nt a ge , ” Pa r i l l a , 36 8 F. 3d a t28 9, be c a us e th e y “ u n re a so n a b ly f

a v o r [D I] t o th e se v e re d isa d v a n tag e o f [ its empl oy ees ]

. ” A l exande r , 341 F. 3d at27 1

. W hen the uncons ci onabl e arbi t r at i on pr ovi s i ons “ar e s o one- s i ded that t hei r onl y pos s i bl e purpos e i s t o underm i ne the neutr al i t yof the p roc ee d ing , ” H o o ters, 1 7 3 F

. 3 d at 93 8 (e m p h asis ad d ed ), s ever ance of t hos e provi s i ons and enfor cement of the r emai nder of the arbi t r at i on agr eement i s notappr opr i at e. See Par i l l a, 368 F. 3 d at 2 8 9; A l exande r , 341 F. 3d at271; G r aham O i l , 43 F. 3d at1248- 49. T h e onl yconce i vabl e purpos e of the arbi t r at i on ag ree m en t’ s o n e-side d p rov isi o n s is t o sta c k th e d ec k in D I’s f a v o r , ma k i n g s e v e r a n c e o f t h e u n c o n s c i o n a b l e t e r msW e ar e unpersu aded byD I ’ s ar gum entthatthe 6 agr eement ’ s unr eas onabl e ter m s s houl d be s ever ed. D I l i kens t hi s cas e t o Par i l l a, i n w hi ch w e expl ai ned thata thi r t y - dayfi l i ng p ro v isio n a n d a r e q u ire m e n t th a t ar b itratin g p a rties b e a r th e ir ow n fee s and cos t s w er e uncons ci onabl e. 368 F. 3d at277- 79. A s D I n o tes , rath e r th a n d e c li n in g to e n f o rc e th e a g re e m e n t in Par i l l a, w e r emanded forfur t herpr ocee di ng s as t o w hether addi t i onal t erm s w er e uncons ci onabl e and w hethers ever ance of t he uncons ci onabl e pr ovi s i ons w as appr opr iat e. I d. at289. H ere, w e no ton l yhav e a great er num ber of u nco nscio n a b le t e r ms t h a n i n P a r i l l a , b u t , mu c h mo r e s i g n i f i c a n t l y , t h o s e t e r ms demonstr at e that D I cr eat ed a one

- s i ded arbi t r at i on s y s t em t hat gave i tu n f

a i ra d v a n t a g e s a n d t h a tu n r e a s o n a b l yr e s t r i c t ed em p loy ee s’ ac ce ss to a rbitrati o n . A s w e e x p lai n ed in A lexa n d er, al t houg h “a di s t r i ctcour ts houl d or di nar i l ybe ac cor ded the oppor tuni t y t o rul e on the i s s ue of s ever ance bas ed on a s uffi ci ent l ydevel oped r ecor d, ” gi ven t he i nes capa bl yone- s i ded n a tu re o f th is a g re e m e n t, “n o re a so n a b le f in d e r o f f a c t co u ld concl ude thats ever ance i s appr opr i at e. ” A l exande r , 341 F. 3d at 271 n. 13.

- 28- i nappr opr i at e. 6 W e con cl ud e, i n s um , t hat t he arbitrat i on agreem e n t is pr ocedur al l yand s ubs t ant i vel yuncons ci onabl e, and tha tthe pervas i vel y o n e-si ded natur e of the agr eementfor ecl os es any pos s i bi l i t yof s ever i ng t he unfa i rpr ovi s i ons fr om the r emai nder o f th e a g ree m en t. S ee A lexa n d er, 34 1 F

. 3 d at 27 1 (“[ W ]e canno t gi ve e ff

e c t t o a n a gr e e ment t o a rbi t r a t e a ff l i c t e d by so m uch funda m ent al and pervas i ve unfa i r nes s. ”) W e w i l l t husI n gr ant i ng D I ’ s m o ti o n , the D i s t r i ctC our tdi s m i s s ed 7 N in o ’s c laim s, ra th e r th a n sta y in g lit ig a tio n p e n d in g th e re su lts of arbi t r at i on. W e not e thati f t h e u n co n s ci onabl e t erm s had b ee n sev era b le fro m the a rbitrati o n ag ree m en t, the D i s tr i ctC o u rt s houl d have st ay ed l i t i gat i on i n thi s cas e r athert han di s m i s s i ng N in o ’s c la im s . S e e 9 U .S .C . § 3 ; L lo y d v . H O V E N S A , L L C ., 3 6 9 F .3 d 2 6 3 , 2 6 8 -6 9 (3 d C ir. 2 0 0 4 ) (ex p lain in g th a t § 3 d ire c ts co u rt s to stay , n o t d ism iss, ca ses w h en co m p ell ing arb itrati o n ).

- 29- re v e rse th e D istric t C o u rt’s d e c isio n to se v e r th e u n c o n sc io n a b le cl aus es fr om t he arbi t r at i on agr eement and enfor ce the re m a in d e r o f

th e a g re e m e n t. 7 I V. A s w e now expl ai n, w e fur t her concl ude t hat t he D i s t r i ct C o u rt e rre d in d e ter m in in g th a t D I d id n o t w a iv e its rig h t to com pel arbitrat i o n a f

ter l i t i gati ng t his case for fi ft een m on t hs. “C ons i s t entw i t h t he s t r ong pr efe r ence forarbi t r at i on i n fede r al c o u rts, w a iv e r is n o t to b e lig h tlyin f e rre d , an d w a iv e r w ill n o r ma l l y b e f

o u n d o n l y wh e r e t h e d e ma n d f o ra rb i t r a t i o n c a me l ong af ter the s ui tcomm ence d and w hen both par t i es had e n g a ged i n ex t ens iv e d isc o v e ry .” P a in e W e b b e r In c . v . F a ra g a lli , 61 F. 3d 1063, 1068- 69 ( 3d C i r . 1995) ( i nt ernal quot at i ons and ci tat i ons om i t t ed)

. N otw i t hs t andi ng t he pr efe r ence for arbi t r at i on, how ever , “a cour tm ayr efus e t o enfor ce a n arbi t r at i on agre ementw her e, forexampl e, ‘ t he al l eged d e f a u lti n g p a rty h a s a c ted in c o n sis ten tlyw ith th e rig h t to arbi t r at e, ’ ” D oct or ’ s A s s ocs . , I nc. v. Stuar t , 85 F. 3d 975, 981 ( 2d C i r . 1996) ( quot i ng St

. M ary ’ s M edi cal C t r . v. D i s co A l um i num Pr ods

. C o. , 969 F. 2d 585, 588 ( 7th C i r . 1992) ) , and- 30- “w e w i l l nothes i t at e t o hol d t hatthe r i ghtt o arbi t r at e has been w ai ved w her e a suf

fi ci ents how i ng of pr ej udi ce ha s been made by t he par t y s eeki ng t o avoi d arbi t r at i on. ” E hl ei t er , 482 F. 3d at 2 2 3 (i n te rn a l q u o ta tio n s a n d c ita tio n s o m itte d ). I n H oxw or t h v. B l i nder , R obi ns on & C o. , I nc. , 980 F. 2d 9 1 2 (3d C ir

. 1 9 9 2 ), w e se t fo rth “a n o n ex clus ive listo f f ac tors r el e v a n t t o t h e p r e

j u d i c e i n q u i r y . ” Eh l e i t e r , 4 8 2 F. 3 d a t222. T he H oxw or t h fac t or s ar e: [ 1 ] th e tim e lin e ss o r la c k th e re o f o f a m o tio n to a rb it r a te . . . [; 2 ] th e d e g re e to w h ich th e p a rty s eeki ng t o compel arbi t r at i o n has cont es t ed the m er i t s of i t s opponent ’ s cl ai m s ; [3] w hethert hat par t yhas infor m ed i t s adver s aryof the i nt ent i on t o s e e k a rb i t r a t i o n e v e n i f i t h a s n o t y e t f i l ed a m ot i on t o s t aythe di s tr ictcourtpr ocee di ngs ; [4] th e e x ten t o f

its n o n -m e rits m o tio n p ra c tice ; [ 5 ] its as s entt o t he court ’ s pr etr i al o rder s ; and [6] t he e x te n t to w h ich b o th p a rties h a v e e n g a g e d in d i s c o v e r y.

Ho x wo r t h , 9 8 0 F

. 2 d a t9 2 6

- 2 7 ( i n t e r n a l c i t a t i o n s o mi t t e d )

. As i s evi den tbyou r r epeated charact eri zat i on of these factor s as a n o n e x c l u s i v e l i s t , n o ta l l t h e f a c t o r s n e e d b e p r e s e n t t o j u s t i f y a fi ndi ng of w ai ver , and “[t ] he w ai verdet erm i nat i on m us tbe b a s e d o n th e c ir c u m s ta n c e s a n d c o n te x t o f th e p a rt ic u la r c a s e .” D o c to r’ s A s s o c s ., 8 5 F .3 d a t 9 8 1

. W e have , m or eover , cons i s t ent l yemphasi zed t hat

“ p re ju d ice is th e to u c h sto n e f o r d e ter m in in g w h e th e r th e rig h t to- 31- arbi t r at e has been w ai ved by l i t i gat i on conduct

. ” Ehl ei t er , 482 F .3 d a t 2 2 2 (q u o tatio n s an d c itatio n s o m itt e d ). A s th e H o x w o rth fac t or s t hemsel ves m ake c l ear , t he conc eptof pr ej udi ce i ncl udes n o t o n ly“ su b sta n tiv e p re ju d ice to th e leg a l p o sitio n o f th e p a rty cl ai m i ng w ai ver , ” but al s o ext ends t o “pr ej udi ce r es ul t i ng fr om t he unnec es s ary del ay and expens e i ncurr ed byt he pl ai nt i ffs as a re su lt o f th e d e f

e n d a n ts’ b e late d in v o c a tio n o f th e ir rig h t to a rb itrate .” Id

. a t 2 2 4

. F o r ex a m p le, w e sta ted in H o x w o rth th a t: [W ] her e a pa r t y fai l s t o demand arbi t r at i on dur i ng pr etr i al pr ocee di ngs, and, i n t he meant i m e, engage s i n pr etr i al act i vi t yi n co ns i s t entw i t h an i nt entt o arbi t r at e, t he part yl at eroppos i ng arbi t r at i on m aym or e eas i l y s how t hat i t s pos i t i on has bee n co m prom i sed, i

. e. , prej ud i ced, because undert hes e cir cumst ance s w e ca n r eadi l yi nfer t h a tt h e p a r t yc l a i mi n g wai v e rh a s a l r e a dy in v e ste d c o n sid e ra b le tim e a n d e x p e n se in l i t i gat i ng t he ca s e i n cour t , and w oul d be r equi r ed to d u p lica te its e f

f o rts, to a t lea st s o m e d e g re e , if t he ca s e w er e now t o pr ocee d i n t he arbi t r al forum . Pr ej udi ce of

t hi s s or ti s notm i t i gat ed by t he abs ence of s ub stant i ve pr ej udi ce t o the l egal p o sit ion o f th e p artyclaim ing w aive r. Id. (i nternal qu otat i on s and ci t at i on s om i t t ed). In ot her w ords, t he invest m ent of con si derabl e t i m e and m on eyl i t i gati ng a case m ayamount t o s uffi ci entpr ej udi ce t o bar a l at er - as s ert ed r i ght t o arbi t r at e. T hi s r ecogni t i on t hatthe r i ghtt o arbi t r at e maybe w ai ved un der such cir cum st ances i s co nsi st ent w i t h the purpo se behi nd arbi t r at i on i t s el f— arbi t r at i on i s m eantt o s t r eaml i ne the pr ocee di ngs , l ow ercos t s , and c o n serve pr i vat e and j udi ci al- 32- re so u rc e s, a n d it fu rth e r s n o n e o f th o se p u rp o se s w h e n a p a rty a c tiv e ly lit ig a tes a c a se f o r an e x ten d e d p e rio d o n lyto b e late d ly as s er tt hat t he di s put e shoul d have be en arbi t r at ed, notl i t i gat ed, i n t he fi r s tpl ace . I n r ej ect i ng N i no’ s ar gum ent t hat D I had w ai ved i t s r i ght t o enfor ce the arbi t r at i on cl aus e, the D i s t r i ctC our tfocus ed al m os texcl us i vel yon tw o of t he s i x H oxw or t h fac t or s : t he fa ct t hat , b yi ncl udi ng m andat oryarbi t r at i on among t he t en aff i r m at i ve def

ens es as s ert ed i n the ans w er , D I had “infor m ed i t s adver s ary o f the i nt ent i on t o s eek a rbi t r at i on, ” and the fa ct th a t D I h a d n o t f

iled a d isp o sitiv e m o tio n p rio r to m o v in g to enfor ce the arbi t r at i on agr eement

. H oxw or t h, 980 F. 2d at926- 27. As we n o w ex p l a i n , i n e mph a s i z i n g th e s e f a c t o r s , the D i s t r i ctC our tgave i ns uffi ci entcons i der at i on t o t he r emai ni ng H oxw or t h fa ct or s , and, cons equent l y , t o the more pr act i cal ques t i on of w hether D I has “ac t ed i ncons i s t ent l yw i t h t he r i ght to arb itrate. ” S t. M ary ’s, 9 6 9 F

. 2 d at 58 8

. W e co n clud e that D I, t hr ough i t s l i t i gat i on conduct , w ai ved i t s r igh t t o compel arbi t rat i on of N i no ’s cl ai m s. W e add res s the si x H ox w orth f a c to rs in tu rn b e lo w .

A . T he T i m el i nes s of

D I ’ s M ot i on T he fi r s tH oxw or t h fac t orr equi r es thatw e cons i der w hether D I m oved t o compel arbi t r at i on on a t i m el ybas i s . 980 F. 2d at926- 27. A l t hough “the l ength o f the t i m e per i od i nvol ved al one i s notdet erm i nat i ve, ” Z i m m er , 523 F. 3d at232 ( ci t at i on om i t t ed) , and al t hough w e have addr es s ed i ns t ance s of m or e s er i ous unt i m el i nes s , s ee E hl ei t er , 482 F. 3d at223 ( c h a r a c t e r i z i n g a f

o u r - y e a rd e l a ya s e s p e c i a l l y“ e g r e g i o u s ” ) , DI m a n if e stlyd id n o t m o v e to c o m p e l ar b itratio n in a tim e ly- 33- m a n n e r, an d th is f

a c to r w e ig h s f

irm lyin f a v o r of w a iv e r. A s in E h leite r, th e f

if tee n -m o n th d e lay i n th is c a se su b s ta n tia lly “exc eeds t he el even mont h t i m e l aps e ati s s ue i n H oxw or t h, and dw ar fs t he del ayi nvol ved i n cas es w h ere w e have found no w a iv e r. S e e P a lck o (3 8 d a y s); W o o d (1 1 /2 m o n th s); F a ra g a lli , 61 F. 3d at 1069 ( t w o m ont hs ) ; G avl i k ( defe ndant m oved fors t ay p e n d in g a rb itratio n “ im m e d iate ly ” a f ter re m o v in g th e a c tio n to f e d e ra l c o u rt ).” E h le ite r, 4 8 2 F .3 d a t 2 2 3

. M o reo v er, t o the e x tent that o u r rev iew o f th e m o ti o n ’s tim e lin e ss sh o u ld c o n sid e r th e m o v a n t’s e x p lan a tio n f o r its d e lay, D I’s sta ted ra tio n a le f o r h a v in g w a ited so lo n g to se e k to e n f o r c e t h e a rb i t r a t i o n a g r e e me n ti s u t t e r l yu n c o n v i n c i n g . DI expl ai ns t hati t del ay ed fi l i ng a m ot i on t o enfor ce the arbi t r at i on a g r e e me n tb e c a u s e Ni n o ’ s c o mp l a i n ta l l e g e d th a tNi n o a n d DI h ad sign ed a n ew co n tr ac t up d ati n g the te rm s o f N ino ’s compensa t i on; “D I had di ffi cul t yi n l ocat i ng t h is document ”; a n d i twa s n o tu n t i l Ni n o ’ s J u l y2 5 , 2 0 0 7 d e p o s i t i o n t h a t DI un derst oo d thatt he com plai nt’ s reference t o a new con t ractw as, i n fac t , a r efe r ence t o a l ett erof u n d erst andi ng t hatamended N ino ’s prior c o n tr ac t. (D I B r. 2 4

. ) N o a sp e c t o f th is e x p lan a tio n w ith sta n d s sc ru tin y . F irst, w hi l e the compl ai nti ndeed r efe r s t o a M ay 22, 2002 agr eement betw een N i no and D I t o m odi fyt he t erm s of hi s compensa t i on, t he compl ai ntcert ai nl ydoes nots ugges tt hatt hi s s ubs equent agr eementi n anyw ayaddr es s ed orm odifi ed the or i gi nal contr act ’ s arbi t r at i on agr eement

. D I ’ s cont ent i on thatthe compl ai ntl ed i t t o bel i eve t hat t he par t i es had s om ehow al t er ed t hei rarbi t r at i on agr eementi s unconvi nci ng, as not hi ng i n the c o mp l a i n t ’ s l a n g u a g e s u p p o r t s s u c h a n i n f e r e n c e . S e c o n d , i f

DI h a d in f a c t ex p e rie n c e d d if

f icu ltyin lo c a tin g th e c o n tra c t itT he compl ai nts t at es t hatD I r efus ed t o pr ovi de N i no 8
w i t h a c o p y o f t h i s a g r e e me n t , a n d s o DI a d mi t t e d l y c o u l d not a s k th a t N in o p ro d u c e th e a g re e m e n t d u ri n g d is c o v e ry.

- 34- dr aft ed and i n as s es s i ng i t s i m pactupon t he part i es ’ arbi t r at i on agr eement , i tcoul d (an d pr es um abl yw oul d) have pr opounded i nt err ogat or i es t o N i no t o cl ar i fy w hi ch contr actthe c o m pl ai nt r efe r r ed t o and w hethert hatcontr acthad, i n fac t , aff ect ed the arbi t r at i on agr eement ; D I ’ s i nt err ogat or i es do notm ent i on the 8 c o n t r a c ti n q u e s t i o n , u n d e r c u t t i n g D I ’ s e x p l a n a t i o n f o ri t s d e l a y. T h ir d , o n N o v em b er 2 0 , 2 0 0 6 , as p art o f it s d isco v ery pr oduct i on i n t hi s cas e, D I pr oduced the verydocument i tnow cl ai m s nott o have been abl e t o l ocat e. Fi nal l y , notw i t hs t andi ng it s ex pl anat i on t hati tw as notunt i l N i no’ s J ul y25, 2007 depos i t i on t hatD I under s t ood w hi ch contr actt he compl ai ntw as r efe rri n g to, D I s t i l l di d notm ove t o enfor ce the arbi t r at i on a g re e m e n t f

o r a n o th e r tw o m o n th s a f ter th e d e p o sitio n . In sh o rt, D I’s de layw as sig n ifi ca n t, an d it s ex p lana ti o n s fo r th e d elayare u n p e rsu a siv e . T h e f

irst H o x w o rth f

a c to r th u s w e ig h s h e a v ilyin f a v o r o f a f in d in g o f w a iv e r. B. W h e t h e r DI Co n t e s t e d t h e M e r i t s o f Ni n o ’ s Cl a i ms W e nextcons i der“the degr ee t o w hi ch t he part ys eeki ng to com p el arb itrati o n h as c o n test ed the m erit s o f it s o p p o n en t’ s c laim s. ” H ox w orth, 98 0 F

. 2d at92 6. D I i s corr ectt hat th is f a c to r w e ig h s a g a in st a f

in d in g o f w a iv e r, a s it d id n o t en g a g e in m ot i on pr act i ce on the mer i t s pr i orto m o v ing t o compel a rb itr a tio n . A lth o u g h N in o a rg u e s th a t th is f a c to r tilt s in h is favorbeca us e D I fi l ed a mot i on t o di s m i s s one of hi s cl ai m s at t he s ame t i m e t hat i t fi l ed i t s m ot i on t o compel arbi t r at i on, and- 35- t h a tN i n o ’ s c o u n s e l r e c e i v e d t h e d i s m i s s a l m o t i o n tw o d a ys befor e r ece i vi ng t he m ot i on t o compel arbi t r at i on, N i no w as not s e r i o u s l yp r e

j u d i c e d b yh a v i n g r e c e i v e d t h e d i s mi s s a l mot i on ju s t tw o d a y s b e f

o re th e m o tio n to c o m p e l a rb itr a tio n . C . W het her D I I nf

orm ed N i no of

i t s I nt ent t o Seek A rbi t rat i on T he thi r d H oxw or t h fac t ori s w hetherthe part ysee k i ng arbit rati o n “has i nform ed i t s adver s aryof the i nt ent i on t o s eek arbi t r at i on even i f i t has not y et fi l ed a m ot i on t o s t ayt he di s t r i ct c o u rt p roc ee d ing s. ” 9 8 0 F

. 2 d at 92 6 -27

. T h e D istri ct C o u rt r el i ed primar i l yupon thi s fac t ori n i t s anal y s i s , r eas oni ng that beca us e D I i ncl uded m andat oryarbi t r at i on among t he t en aff i r m at i ve def

ens es as s ert ed i n i t s ans w er , i thad pr ovi ded N i no w i t h adequa t e n o ti ce of the fa ctthati tw oul d eventual l ym ove t o enfor ce t he arbi t r at i on agr eement

. A ccor di ng t o t he D i s t r i ct C our t , “[a ] ft ert he def

endant s r ai s ed t he aff

i r m at i ve def

ens e of arbit rati on i n t hei rans w er , N i no w as on not i ce thatarbi t r at i on m a yb e f

o rth c o m in g a n d h a d th e o p p o rtu n ityto p lan h is litig a tio n s tr a te g ya c c o rd in g ly.” ( J .A . a t 2 3 .) W hi l e D I i s corr ectt hatt hi s fac t or w ei ghs i n i t s favor , t he D i s t r i ctC our t ’ s anal y s i s over s t at es i t s s i gni fi canc e i n thi s cas e. It is u n d o u b ted lytru e th a t D I’s a n sw e r d isc lo se d th e p o ss ib ili ty that it w o u ld see k to co m p el a rbitrati o n , an d that this disclosu re i s an i m po rt ant consi derat i on , a l t ho ug h iti s byno m eans a di s pos i t i ve one, fort he w ai ver anal y s i s . H oxw or t h, 980 F. 2d at 926- 27. H ow ever , t he s i gni fi canc e, forpurpos es of t he w ai ver anal y s i s , o f

DI ’ s i n v o c a t i o n o f

a rb i t r a t i o n i n i t s a n s wer decr eas ed the l ongerD I par t i ci pat ed i n thi s l i t i gat i on w i t houtIt is w ell rec o g n ized that “d isco v eryg en era ll yis m o re 9 li m it ed in arb itrati o n than in li ti g ati o n , ” In re C o tt o n Y arn A nt i t rus tL i t i g. , 505 F. 3d 274, 286 ( 4th C i r . 2007) , and that , as an “i m por t ant count erw ei ght [, ]

. . . arbi t r at or s ar e notbound by th e ru le s o f e v id e n c e ,” G ilm e r v . In te rs ta te /J o h n s o n L a n e C o rp ., 500 U

. S. 20, 31 ( 1991)

. C ons equent l y , a part y ’ s evi dent i aryand di s covery needs w i l l be s ubs t ant i al l ydi ffe r entdependi ng upon w h e th e r a c a s e is to b e litig a te d o r a rb itr a te d

.

- 36- fur theri nvoki ng oreven ment i oni ng t he pros pectof arbi t r at i on. C o n tra ryto th e D istr ict C o u rt’s r e a so n in g th a t N in o c o u ld s t r at egi ze ar ound t he i ni t i al l y di s cl os ed pr os pectof arbi t r at i on, a p a rty ’s c a p a c ityto d e v e lo p a lit ig a tio n stra teg yw ith re g a rd to th e lik e lih o o d o f

a rb itratio n d im in ish e s th e lo n g e r th e c a se is l i t i gat ed w i t h no fur th er ind i cat i on t hata mot i on t o compel arbi t rat i on i s forthco m in g. C f. T hy ssen, Inc. v. C al ypso Sh i p p i n g Corp . , S. A. , 3 1 0 F. 3 d 1 0 2 , 1 0 5 ( 2 d Ci r . 2 002) ( “ [ W ] a i v e ri s mor e l i k e l yt o b e f o u n d t h e l o n g e rt h e l i t i g a t i on g o e s on , t he m ore a party avail s i t sel f of t he opp ortun ityto l i t i gat e, and the m or e t hat par t y ’ s l i t i gat i on r es ul t s i n pr ej udi ce t o t he oppos i ng par t y [. ] ”)

. A par t y ’ s appr oach t o di s covery , for i ns t ance , w i l l di ffe rbas ed upon w het h er the ca s e i s t o be l i t i gat ed orarbi t r at ed. L i kew i s e, al t hough w e have c oncl uded 9 t he arbi t r at i on cl aus e’ s ban on att orney ’ s fee s i s uncons ci onabl e, N i no coul d not have know n t hatout come as t he ca s e w as bei ng li ti g a te d , an d h is liti g a tio n stra teg yw a s th u s a lm o st c e rta in to d iffe r ba sed u p o n w h ethe r th e c ase w as b eing li ti g ated in co u rt ( w her e an aw ar d of att orney ’ s fee s w as avai l abl e) orarbi t r at ed (w h ere , o n p ap er a t l ea st, su ch an aw a rd w a s u n av ail ab le). In t he w ai vercont ext , w here p rej udi ce t o t he non- m ovanti s theP u t m o re su c c in c tly , at s o m e p o in t a p a rtyse e k in g to 10 e n f o rc e a n a rb itratio n a g re e m e n t m u st u se it o r lo se it.

- 37- key , an i ni t i al i nvocat i on of t he def ens e of a rbi t r at i on becomes l es s s ign ifi ca ntt he l ongerand more act i vel ya part yl i t i gat es af t e rh a v i n g ma d e t h a ti n i t i a l i n v o c a t i o n wi t h o u tma k i n g a ny further m enti on of arbitrat i on . In short , the af fi rm at i ve d efen se 10 cont ai ned i n D I ’ s ans w ert o the compl ai nt “i nform ed [N i no] of t he i nt ent i on t o s eek arbi t r at i on, ” H oxw or t h, 980 F. 2d at926- 27, b u tt h e s i g n i f

i c a n c e o f

t h i s n o t i c e d i mi n i s h e d t h e l o n g e rDI d e la y e d in m o v in g to c o m p e l a rb itr a tio n . D . E x t ent of

N on- M eri t s M ot i on P ract i ce Und e rHox worth , we a l s o cons i derthe non- m er i t s m ot i on p ra c tice th a t tran sp ire d in th is c a se d u rin g th e f if tee n -m o n th per i o d b etw een w hen D I w as s erved w i t h t he compl ai ntand w h e n i tf i l e d i t s m o t i o n t o c o m p e l a rb i t r a t i o n . I d

. S i g n i f i c a n t l y, h e re th e n o n -m e rits m o tio n p ra c tic e is e q u iv a len t to th a t in H o x w o rth , in w h ich th e d e f e n d a n t w a s f

o u n d to h a v e w a iv e d its rig h t to c o m p e l a rb itratio n

— a s in H o x w o rth , D I “ in a d e q u a tely a n sw e re d [ N in o ’s] d isc o v e ryre q u e sts ,” re q u irin g N in o to f ile t hr ee de t ai l ed mot i ons t o compel , w hi ch D I oppos ed. I d. at925. A nd as in H oxw or t h, t he cons equenc e of the part i es ’ m ot i on p ra c tice o v e r th e se d isc o v e ryd isp u tes w a s to re q u ire N in o to

“ dev ote[] subst anti al am ou nts of t i m e, effo rt , and m on ey in p ro se c u tin g th e a c tio n .” Id . a t 9 2 6 T h is f a c to r w e ig h s s tro n g ly in f av o r of a f ind ing o f w aive r. E . D I ’ s A s s ent t o t he C ourt ’ s P ret ri al O rders A l s o s i g n i f

i c a n ti s t h e f

a c tt h a tDI “ a s s e n t [ e d ] t o t he- 38- [t ri al] cour t ’ s pr etr i al or der s , ” i d. at926- 27, an i m por t ant c o n sid e ra tio n th a t th e D ist r ic t C o u rt f a iled to a d d re ss in its r es ol ut i on of the w ai veri s s ue. In t he fi ft een mont hs betw een J une 2006 and Sept ember2007, t he magi s t r at e j udge conve ned n o f e w e r th a n te n p r e tr ial c o n f e re n c e s. D I d o e s n o t d isp u te N i no’ s cont ent i on t hati tdi d noteven menti o n the pr os pectof arbi t r at i on atanyof thes e conf er ence s , nordi d i tobj ectt o any o f th e m a g istra te ju d g e ’s p re trial o rd e rs b a se d u p o n its in ten t to com pel arbitrat i on . W hil e t he case-speci fi c w ai ver analy si s is n o t susc ep ti b le t o p rec ise l ine-d raw ing , ce rt ainlyD I’s part ici pat i on i n t en pr etr i al confe r ence s overt he cour s e of f if tee n m o n th s s h o w s u n m ista k a b ly th a t it“ a c ted in c o n sis ten tly w i t h t h e r i ghtt o arbi t r at e. ” St

. M ary ’ s , 969 F. 2d at588; s ee R e s to ra tio n P re s e rv a tio n M a s o n r y , In c . v . G ro v e E u ro p e L td ., 32 5 F

. 3 d 54 , 61 (1stC i r. 20 03 ) ( no t i ng , i nteral i a, the ex pen se pl ai nt i ffs i ncurr ed i n part i ci pat ing i n thi r t een pr etr i al confe r ence s i n c o n c l u d i n g th a td efe ndantw ai ved r i ghtt o compel arb itrati o n ). T h e a u th o rities u p o n w h ich D I re lie s d o n o t co m p e l a c o n tr a ry c o n c lu s io n . D I d ra w s o u r a tte n tio n to M a x u m F o u n d ., In c . v . S a lu s C o rp ., 7 7 9 F .2 d 9 7 4 , 9 8 3 (4 th C ir. 1 9 8 5 ), an d , in par t i cul ar , t o t hatcourt ’s o b servat i on that“the part ys eeki ng a rb itratio n d o e s n o t lo se its c o n tra c tu a l r ig h t b yp ru d e n tly p u r s u i n g d i s c o v e r y i n t h e f a c e o f a c o u r t

- o r d e r e d d e a d l i n e . ” DI appea r s t o over l ook the cont exti n w h ic h t he courtm ade the ci t ed s t at em en t. I n M axum, the pl ai nt i ff a r gued thatthe defe ndantw ai ved i t s r i ghtt o s eek a rbit rati on beca us e the defe ndantpar t i ci pat ed i n di s coveryand pr etr i al confe r ence s aft er i thad fi l ed i t s m ot i on t o compel arbi t r at i on, butbefor e the t r i al cour trul ed o n the m o ti on. I d. at982- 83. T her e w as noA m er i can Recover yC orp. v. C om put er i zed Therm al 11 Im a g in g , In c ., 9 6 F .3 d 8 8 (4 th C ir

. 1 9 9 6 ), als o c ited b yD I, is li k ew ise re a d ilyd ist ing u isha b le fro m the f ac ts of o u r ca se. In th a t ca se , the d e f

e n d a n t in v o k in g a rb itratio n p a rticip a ted in di s co v erydur i ng the tw o- m onth per i od betw een the co m m en ce m en t of

the law su itan d the f

il ing o f th e d ef

en d an t’ s m ot i on t o compel arbi t r at i on. D I l i t i gat ed thi s cas e and a s s ent ed t o t he tr i al cour t ’ s pr etr i al or der s for t hi r t een m ont hs l ongert han d i d t h e d e f

e n d a n ti n A m e r i c a n R e c o v e r y.

- 39- in c o n sis ten c yb e tw e e n th e d e f e n d a n t’s litiga tio n c o n d u c t an d its in ten t to a rb itrate in th a t c a se , b e c a u se th e lit ig a tio n c o n d u c t in questi o n t r ans pi r ed af t erthe def

endanthad demanded a rb itratio n . In o u r c a se , b y c o n tra st, D I p a rticip a ted a c tiv e lyin t he l it igat i on forw el l overa y earbefor e movi ng t o compel arbi t r at i on, m eani ng t h at its pur s ui tof di s coveryand i t s as s ent t o p r e t r i a l o r d e r s i s n o t r e mot e l y c o mpa r a b l e t o t h e c o n d uct at iss u e in M a x u m . D I’s lo n g -te rm a s s e n t to th e m a g istra te 11 j ud g e ’ s p r e tr i a l o r d e r s wei g h s h e a v i l yi n f a v o ro f a f i n d i n g of w a iv e r. F . E x t ent t o W hi ch B ot h P art i es E ngaged i n D i s cover y F inally , th e p arti es e n g ag ed in sign ifi ca n t disco v ery d u rin g th e f

if tee n -m o n th p e rio d b e f

o re D I f iled its m o tio n to compel arbi t r at i on. D ur i ng t hi s t i m e the part i es confe r r ed and pr epar ed a pr opos ed ca s e managementor derwhi c h cont ai ned no m ent i on of arbi t r at i on, pr opounded i nt err ogat or i es , s erved and s up pl ement ed di s cl os ur es , excha nged r eques t s fordocument produ ct i on , and at t end ed th e dep osi t i on s of fo ur w i t nesses. A dd i t i onal l y , as w as not ed s upr a, N i no expende d addi t i onal- 40- reso u rce s o n d isco v ery -relat ed m att ers a s a re su lto f D I’s i nadequa t e r es pons es t o hi s di s coveryr eques t s , w hi ch r es ul t ed i n s i gni fi cantdi s covery - r el at ed mot i on pr act i ce. W hi l e the s cope of t he par t i es ’ di s covery dur i ng t he fi ft een- m onth per i od ati s s ue i n t hi s cas e w as notas ext ensi v e as t he di s coveryat i s s ue i n H oxw or t h and Ehl ei t er , the di s covery i n thi s cas e w as byno m eans de m i nim i s. D I , i n ar guing that the p arti es’ d isco v ery -rela t ed ac t i vi t i es d o n o t d e m o n stra te th a t ite n g a g e d in p re trial a c tiv ity i nco nsi st ent w ith an int ent t o arbi t rat e, no t es that the p art i es’ arb itrati o n agr eementauthor i zes th e p arti es to co n d u ct disco v ery

“ p u rs u a n t to th e F e d e ra l R u le s o f C iv il P ro c e d u re .” (J .A . a t 8 1 .) I n l i ght of H oxw or t h’ s fi ndi ng t hat t he pl ai nt i ffs i n t hat cas e had b e e n p r e ju d ic e d b yth e f

a c t th a t, i n lit ig a tin g th e c a se in c o u rt, t he “de fenda nt s w er e abl e t o u se t he Feder al R ul es t o conduct di s cove ryn o tavai l abl e i n t he arbi t r at i on forum , ” H oxw or t h, 980 F .2 d a t 9 2 6 , D I c o n ten d s th a t th e re c o u ld b e n o p re ju d ice in th is cas e, s i nce di s coveryw oul d have be en ava i l abl e i n t he arbi t r al f o ru m . T he for ce of

t hi s ar gum entis u n derm i ned, how ever , by t he arbi t r at i on agr eement ’ s fi r m r equi r ementt hatt he arbi t r at i on t ake pl ace “i n no eventm or e than thi r ty( 30) day s aft ert he sel ect i on of an arbi t rat or h as b een m ade.” (J

. A

. at 81

. ) T hat i s, w h ile th e p a rties w o u ld u n d o u b ted lyh a v e h a d so m e o p p o rtu n ity f o r d isc o v e ryh a d th e a rb itratio n c lau se b e e n in v o k e d o n a tim e ly b a sis , the ti m e c o n stra in ts p lac e d u p o n su c h d isc o v e ryw o u ld have be en much m or e r es t r i ct i ve, a n d , bycons equenc e, the reso u rce s ex p en d ed o n d isco v eryw o u ld h av e b ee n m u ch m o re l i m i t ed. See R es t or at i on Pr es ervat i on M as onr y , 325 F. 3d at61. T h e m e re f

a c t th a t so m e d isc o v e ry w o u ld h a v e b e e n a v a ilab le in- 41- arbi t r at i on does not m ean t hat N i no w as not pr ej udi ce d by h a v in g to p a rticip a te in f if te e n m o n th s’ w o rth o f

d isc o v e ryin fede r al cour tbefor e D I el ect ed t o m ove t o compel arbi t r at i on. T he ext entof the part i es ’ di s coverybetw een Ju n e 2006 and S ep tem b er 2 0 0 7 w eigh s firm lyin f av o r of a f ind ing o f w aive r. G . Sum m ary I n s um m ary , four of the H oxw or t h fac t or s

— t he unt i m el i nes s of D I ’ s m ot i on, the ext entof non-mer i t s m ot i on practice, D I’ s ass ent t o the m agis t rat e j ud ge’s pr et ri al orders , and t he ext entof the part i es ’ di s covery

— w ei gh fi r m l yi n favor o f a f in d in g o f w a iv e r . O f

th e tw o f

a c to rs th a t d o n o t ti p deci s i vel yagai ns tD I ’ s r i ght t o bel at edl yi nvoke the arbi t r at i on cl aus e— t he fa ctt hat D I di d not engage i n m er i t s - bas ed mot i on pr act i ce a nd t he fact t hat D I l i s t ed arbi t r at i on as an af fi r m at i ve defe ns e— t he D i s t r i ctC our tr el i ed mostheavi l yupon D I’s i n c l u s i o n o f a r b i t r a t i o n i n i t s a n s we rt o t h e c o mp l a i n t

. As we have e xpl ai ned, how ever , t he sig n i fi canc e of thi s fac t or di m i ni s hed the l onger D I l i t i gat ed t hi s cas e w i t houtr ai s i ng t he p ro s p e c t o f

a rb itr a tio n . T he fi ft een- m ont h del aybetw een the s ervi ce of t he compl ai ntand D I ’ s i nvocat i on of arbi t r at i on w as s i gni fi cant , s ee E hl ei t er , 482 F. 3d at223, and D I ’ s del ay “c aused [ N i no] t he exp e n s e o f l i t i g a t i n g i n c o u r t , a s wel l a s . . . ma k i ng [N i no] en d u re [fiftee n m o n ths] o f w h at w o u ld hav e be en (ha d [ D I] s ucce eded) w as t ed l i t i gat i on. ” St

. M ary ’ s , 969 F. 2d at591; s ee a lso E h leite r, 4 8 2 F .3 d a t 2 2 2 (su c h e x p e n se a n d d e lay co n stitu te pr ej udi ce)

. W hi l e w e ar e m i ndful of t he factthat“w ai veri s not t o be l i ght l yi nferr ed, ” i t i s not appr opr i at e t o compel arbi t r at i on w her e, as her e, “the demand forarbi t r at i on came l ong aft ert he- 42- s ui t comm ence d and w hen bot h par t i es had engage d i n ext ens i ve di s covery . ” Pai neW ebberI nc. , 61 F. 3d at1068- 69 ( i nt ernal q u o ta tio n s a n d c ita tio n s o m itte d ). V. Fort h e fore goi ng r eas ons , w e w i l l r ever s e the D i s t r i ct C our t ’ s or dercompel l i ng arbi t r at i on and r emand forfur t her p ro c e e d in g s .