In the 

United States Court of Appeals 

For the Seventh Circuit ____________________

No. 18‐1361

FRANCINA SMITH,

Plaintiff‐Appellee,

v.

GC SERVICES LIMITED PARTNERSHIP,

Defendant‐Appellant.

____________________

Appeal from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

No. 16‐cv‐01897 — Richard L. Young, Judge.

____________________

ARGUED SEPTEMBER 17, 2018 — DECIDED OCTOBER 22, 2018

____________________

Before EASTERBROOK, KANNE, and BRENNAN, Circuit

Judges.

KANNE, Circuit Judge. Synchrony Bank hired GC Services

Limited Partnership to collect a debt Francina Smith purport‐

edly owed on her Sam’s Club credit card. In response, Smith

sued GC Services for alleged violation of the Fair Debt Collec‐

tions Practices Act (“FDCPA”), 15 U.S.C. § 1601 et seq. Eight

months later, GC Services notified Smith that she signed an
2 No. 18‐1361

arbitration agreement with Synchrony Bank when she ob‐

tained the credit card. GC Services demanded arbitration.

Smith promptly refused. Another five months passed before

GC Services filed a motion to compel arbitration. The district

court denied the motion after holding that GC Services could

not enforce the arbitration agreement on Synchrony Bank’s

behalf and finding that GC Services waived any right to arbi‐

tration. Because of GC Services’ gratuitous delay in seeking

arbitration, we affirm the district court’s decision.

I. BACKGROUND

In 2014, Francina Smith applied for and received a Sam’s

Club credit card from Synchrony Bank. The credit card con‐

tract included an agreement to arbitrate all disputes arising

from the account. The arbitration agreement also contained a

waiver of the right to seek class action relief. In March 2016,

Synchrony Bank hired GC Services to collect an allegedly un‐

paid balance on the credit card. GC Services informed Smith

that it would commence collection proceedings unless she

disputed the debt in writing.  

On July 15, 2016, Smith brought a class action suit against

GC Services, alleging that the company violated the FDCPA

when it required her to dispute the debt in writing. She con‐

currently requested class certification. In August 2016, GC

Services filed a motion to dismiss for failure to state a claim,

lack of standing, and lack of personal jurisdiction. The motion

to dismiss did not mention the arbitration agreement.  

Smith subsequently sought and received leave to file an

amended complaint, thus resolving the personal jurisdiction

wdeficiencies. At the same time, Smith renewed her motion

for class certification. GC Services filed a second motion to
No. 18‐1361 3

dismiss. In that motion, the company again argued that Smith

lacked standing to sue and that she failed to state a claim be‐

cause the FDCPA requires consumers to dispute alleged debts

in writing. GC Services also opposed the class certification

motion. But the company did not mention the arbitration

agreement in any of its briefing.

While these motions were pending, several discovery dis‐

putes arose. On February 17, 2017, Magistrate Judge Debra

McVicker Lynch scheduled a discovery conference and di‐

rected the parties to file a joint report listing their discovery

disputes. In that report, the parties identified five points of

contention. The magistrate judge held the status conference

and directed GC Services to produce the account histories for

the putative class members. Several weeks later, GC Services

requested a second status conference to decide an unresolved

discovery dispute, but the company later withdrew its re‐

quest after reaching an agreement with Smith.  

On March 10, 2017, GC Services sent Smith a letter notify‐

ing her of the arbitration agreement and demanding arbitra‐

tion. Three days later, Smith unequivocally refused to pro‐

ceed to arbitration. This correspondence was not filed on the

docket, and the district court was not notified that GC Ser‐

vices had demanded arbitration. GC Services filed an answer

to the amended complaint on April 19, 2017. In the answer,

the company denied all factual allegations and listed its af‐

firmative defenses. Moreover, GC Services did not mention

the newly discovered arbitration agreement.

Months passed, and GC Services made no attempt—on the

docket or off—to compel arbitration. On June 19, 2017, the dis‐

trict court denied GC Services’ motion to dismiss. The court

found both that Smith had standing to sue and that
4 No. 18‐1361

§ 1692g(a)(3) “plainly does not” impose a writing require‐

ment. Smith v. GC Servs. Ltd. P’ship, No. 1:16‐cv‐01897‐RLY‐

DML, 2017 WL 2629476, at *4 (S.D. Ind. June 19, 2017) (quot‐

ing Clark v. Absolute Collection Serv., Inc., 741 F.3d 487, 490 (4th

Cir. 2014)). Approximately one month later, the district court

granted Smith’s motion to certify the class.  

On August 7, 2017, thirteen months after the suit began,

GC Services moved to compel arbitration. The district court

denied the motion on two independent grounds. First, the

court held that, as a nonsignatory, GC Services could not en‐

force the arbitration agreement. Second, the court found that

GC Services had waived any right to arbitrate by not dili‐

gently asserting that right. This appeal followed.

II. ANALYSIS

GC Services frames this appeal as one involving the

“novel issue” of whether GC Services can bind Smith to the

arbitration agreement as a nonsignatory. (Appellant’s Br. at

1.) But that question of state law need be reached only if the

district court erred in finding that the company waived any

right to arbitrate.  

Before we reach the merits, we must address an initial

question of terminology. In the criminal context, we distin‐

guish between “forfeiture” and “waiver.” See United States v.

Woods, 301 F.3d 556, 560 (7th Cir. 2002) (explaining that

waiver of an argument precludes review, while mere forfei‐

ture of an argument permits plain error review). Forfeiture “is

the failure to make the timely assertion of a right,” while

“waiver is the ‘intentional relinquishment or abandonment of

a known right.’” United States v. Olano, 507 U.S. 725, 733 (1993)

(quoting Johnson v. Zerbst, 304 U.S. 458, 464 (1938)). Our prior
No. 18‐1361 5

cases discussing the loss of a right to arbitrate uniformly con‐

sider whether “waiver” occurred. But the concept encom‐

passes both intentional relinquishments and implicit aban‐

donments of the right. See, e.g., Kawasaki Heavy Indus., Ltd. v.

Bombardier Recreational Prod., Inc., 660 F.3d 988, 994 (7th Cir.

2011) (explaining that waiver can occur explicitly or be in‐

ferred from inconsistent actions). For consistency’s sake, we

will consider whether GC Services “waived” any right to ar‐

bitration. But that analysis necessarily includes the concept of

forfeiture as defined above.

Like any other contractual right, the right to arbitrate can

be waived. St. Mary’s Med. Ctr. of Evansville, Inc. v. Disco Alu‐

minum Prod. Co., 969 F.2d 585, 590 (7th Cir. 1992). In this case,

the arbitration agreement also included a waiver of the right

to bring a class action suit. If GC Services waived any right to

arbitrate, the company necessarily waived any right to oppose

class certification premised on the agreement. See A.D. v.

Credit One Bank, N.A., 885 F.3d 1054, 1065 n.17 (7th Cir. 2018).

“The factual determinations that a district court predicates a

finding of waiver upon are reviewed for clear error, while the

legal question of whether the conduct amounts to waiver is

reviewed de novo.” Ernst & Young LLP v. Baker O’Neal Holdings,

Inc., 304 F.3d 753, 756 (7th Cir. 2002) (citing Iowa Grain Co. v.

Brown, 171 F.3d 504, 509 (7th Cir. 1999)). If the district court

applied “the applicable law” in weighing the evidence, the re‐

sult turns on “whether the district court clearly erred in its

assessment” that waiver occurred. Iowa Grain Co., 171 F.3d at

509.  

Smith does not contend that GC Services expressly waived

any right to arbitrate. The question is whether we should infer

that forfeiture occurred, which requires us to “determine that,
6 No. 18‐1361

considering the totality of the circumstances, a party acted in‐

consistently with the right to arbitrate.” Kawasaki, 660 F.3d at

994. Many factors are relevant to this analysis, but diligence

or the lack thereof is particularly important. Id. Did “the party

seeking arbitration ... do all it could reasonably have been ex‐

pected to do to make the earliest feasible determination of

whether to proceed judicially or by arbitration?” Cabinetree of

Wisconsin, Inc. v. Kraftmaid Cabinetry, Inc., 50 F.3d 388, 391 (7th

Cir. 1995). We also consider “whether the allegedly defaulting

party participated in litigation, substantially delayed its re‐

quest for arbitration, or participated in discovery.” Kawasaki,

660 F.3d at 994. We need not find that the nonmoving party

was prejudiced by the delay in seeking arbitration. See St.

Mary’s, 969 F.2d at 590 (“[W]here it is clear that a party has

forgone its right to arbitrate, a court may find waiver even if

that decision did not prejudice the non‐defaulting party.”).

“[A]n election to proceed before a nonarbitral tribunal for the

resolution of a contractual dispute is a presumptive waiver of

the right to arbitrate.” Cabinetree, 50 F.3d at 390.

A. GC Services Acted Inconsistently with the Right to Arbi‐

trate

The district court found that GC Services did not act dili‐

gently because the company did not mention the arbitration

agreement in its answer, provided an inadequate explanation

for the five‐month delay in seeking arbitration after learning

of the agreement, and prejudiced Smith by (unsuccessfully)

engaging in motions practice.  

GC Services did not privately demand that Smith arbitrate

her claim until eight months after she filed suit. After Smith’s

prompt refusal, the company waited another five months be‐
No. 18‐1361 7

fore moving to compel. GC Services’ explanation for these de‐

lays is entirely inadequate. The company contends that the in‐

itial eight‐month delay occurred because the arbitration

agreement was in Synchrony Bank’s possession and so “GC

Services was unaware of [its] existence.” (Appellant’s Reply

Br. at 8.) The initial suggestion that GC Services—a sophisti‐

cated debt collection agency—would be unaware that credit

card agreements routinely include arbitration agreements is

suspect. Such provisions are commonplace, and GC Services

should have investigated whether Smith’s contract contained

one. What’s more, federal regulations require credit card is‐

suers to post their credit card agreements online. See 12 C.F.R.

§ 1026.58(d). Even if Synchrony Bank was nonresponsive to

inquiries, GC Services could have found the agreement

through a routine internet search.

But set aside the initial eight‐month dalliance. Even as‐

suming that GC Services could not have reasonably discov‐

ered the existence of the arbitration agreement until March

2017, the company’s actions from that point were unjustified

and manifestly inconsistent with an intention to arbitrate.

Several weeks later, GC Services filed its answer, but made no

mention of the arbitration agreement. The company’s motion

to dismiss and Smith’s motion for class certification were

pending, but GC Services made no effort to supplement its

briefing.  

When finally submitted, that motion was accompanied by

two declarations and a copy of the credit card agreement.

Each declaration was less than four pages. One declaration

was given by a GC Services employee. The credit card agree‐

ment was, as already stated, available online. GC Services has

not provided any information regarding its efforts to obtain
8 No. 18‐1361

this minimal documentation from Synchrony Bank. Did GC

Services request it once or many times? When was the infor‐

mation first requested?  We can only guess.  

Setting aside the inexplicable delay in obtaining a three‐

page declaration, GC Services has not explained why it never

notified the district court that it intended to move to compel

arbitration. At the time the company demanded that Smith

consent to arbitration, a motion to dismiss and motion for

class certification were pending. Arbitration would have

mooted both motions before the district court. But GC Ser‐

vices never requested that consideration of the motions be

stayed or even mentioned the arbitration agreement in its

briefing.  

GC Services also argues that Smith—not the company—is

the “primary, and in many respects, sole cause of any delay.”

Appellant’s Reply Br. at 9. This perplexing argument has no

merit. The arbitration agreement here was elective. Accord‐

ingly, GC Services had the obligation to discover and assert

any right to arbitration. See Kawasaki, 660 F.3d at 997 n.6 (ex‐

plaining that a party to an elective arbitration clause may pro‐

ceed in court unless the opposing party has affirmatively in‐

voked the clause). On these facts, the district court’s conclu‐

sion that GC Services waived its right to arbitration was not

erroneous.  

B. Smith Would be Prejudiced by Arbitration

The company attempts to buttress its inadequate explana‐

tions for the delay by asserting that the district court erred in

finding that Smith would be prejudiced by proceeding to ar‐

bitration.  
No. 18‐1361 9

As an initial matter, GC Services incorrectly argues that

waiver can occur only if there was prejudice. GC Services re‐

lies upon cases from the First and Fifth Circuits for that prop‐

osition. See MicroStrategy, Inc. v. Lauricia, 268 F.3d 244, 249

(4th Cir. 2001); Creative Sols. Grp., Inc. v. Pentzer Corp., 252 F.3d

28, 32 (1st Cir. 2001). But we have repeatedly held that preju‐

dice is not necessary to a finding of waiver. See Kawasaki, 660

F.3d at 994; St. Mary’s, 969 F.2d at 590.  

Nevertheless, prejudice is a relevant factor. See St. Mary’s,

969 F.2d at 590 (“If prejudice is relevant, even if not disposi‐

tive, the district court should consider it just as it should con‐

sider any other relevant factor.”). GC Services argues that the

district court erred—as a matter of law—when it partially re‐

lied upon the company’s filing of a motion to dismiss in con‐

cluding that prejudice existed. “A party does not waive its

right to arbitrate a dispute by filing a motion to dismiss or a

motion to transfer venue.” Faulkenberg v. CB Tax Franchise Sys.,

LP, 637 F.3d 801, 807 (7th Cir. 2011) (quoting Halim v. Great

Gatsby’s Auction Gallery, Inc., 516 F.3d 557, 562 (7th Cir. 2008)).

However, we have never held that the filing of a motion to

dismiss is irrelevant to the waiver analysis.  

When a motion to dismiss raises jurisdictional or proce‐

dural arguments for dismissal, the party has not “submit[ed]

the case to the court for a decision that resolves the dispute.”

Kawasaki, 660 F.3d at 995; accord Sharif v. Wellness Int’l Net‐

work, Ltd., 376 F.3d 720, 727 (7th Cir. 2004). On the other hand,

a motion seeking a determination that the plaintiff’s legal the‐

ory does not state a claim is evidence of waiver because suc‐

cess by the defendant ends “the case just as surely as a judg‐

ment entered after a trial.” St. Mary’s, 969 F.2d at 589.
10 No. 18‐1361

In this case, GC Services’ motion to dismiss framed an in‐

tegral—perhaps dispositive—issue: whether 15 U.S.C.

§ 1692g(a)(3) requires that debts be disputed in writing. The

Third Circuit has held that a written dispute is required; the

Second, Fourth, and Ninth Circuits have held that no writing

requirement exists. Compare Graziano v. Harrison, 950 F.2d

107, 112 (3d Cir. 1991), with Clark, 741 F.3d at 490–91; Hooks v.

Forman, Holt, Eliades & Ravin, LLC, 717 F.3d 282, 285–87 (2d

Cir. 2013); Camacho v. Bridgeport Fin., Inc., 430 F.3d 1078, 1080–

82 (9th Cir. 2005). District courts within the Seventh Circuit

have decided the issue both ways. See, e.g., Jolly v. Shapiro, 237

F. Supp. 2d 888, 895 (N.D. Ill. 2002) (finding a writing require‐

ment); Campbell v. Hall, 624 F. Supp. 2d 991, 1000 (N.D. Ind.

2009) (finding no writing requirement).  

If the district court had rejected Smith’s fundamental legal

theory, GC Services would have both prevailed on the merits

and strengthened the intra‐circuit precedent supporting an

interpretation of § 1692g(a)(3) favorable to debt collectors. GC

Services’ decision to submit that question to the district court

was “not consistent with a desire to arbitrate.” St. Mary’s, 969

F.2d at 589. And an attempt to compel arbitration after losing

on a central legal issue is suspect because “[a] party may not

normally submit a claim for resolution in one forum and then,

when it is disappointed with the result in that forum, seek an‐

other forum.” Id.  

Thus, the district court’s determination that Smith was

prejudiced when GC Services sought arbitration after Smith

had defeated a motion to dismiss, obtained class certification,

and litigated several discovery issues was not erroneous. In

essence, GC Services sought to erase Smith’s successes—in‐

cluding her victory on the pivotal legal issue of whether
No. 18‐1361 11

§ 1692g(a)(3) contains a writing requirement. This attempt to

“play heads I win, tails you lose” is “the worst possible reason

for delay.” Cabinetree, 50 F.3d at 391. GC Services’ argument

that Smith would suffer no prejudice from proceeding to ar‐

bitration is not only wrong but beside the point.  

III. CONCLUSION

GC Services did not discover the existence of the arbitra‐

tion agreement for eight months, and then the company did

not notify the court or move to compel arbitration for another

five months. None of the explanations offered for the delays

are adequate. And GC Services’ decision to litigate the merits

of Smith’s legal theory and request for class certification was

inconsistent with a desire to arbitrate. Because we affirm the

district court’s conclusion that GC Services waived any right

to arbitrate, we need not explore whether GC Services could

have enforced the arbitration agreement as a nonsignatory.  

For these reasons, we AFFIRM the district court’s denial

of GC Services’ motion to compel arbitration.