Opinion ID: 758731
Heading Depth: 2
Heading Rank: 1

Heading: Propriety of District Court Deciding Issue of Waiver

Text: 13 At the outset, petitioners argue that the district court should not have decided the issue of waiver itself, but rather should have referred the matter to the arbitrator. The district court, relying on Doctor's Assocs., Inc. v. Distajo, 66 F.3d 438 (2d Cir.1995), and other cases, held that it could decide the waiver issue in light of petitioners' active participation in the litigation for 15 months. In Distajo, the court reviewed the existing case law and determined that, although ordinarily a defense of waiver brought in opposition to a motion to compel arbitration under § 4 is a matter to be decided by the arbitrator, the district court could properly decide the question when the party seeking arbitration had already participated in litigation on the dispute. 14 Petitioners rely on the Distajo court's statement that it was bound ... by our most recent precedent to allow a district court to decide the issue of waiver, 66 F.3d at 456, to argue that Distajo is not binding precedent because in so holding it misinterpreted the prior cases. This argument is without merit. Even assuming the Distajo court was not required to decide the way it did, once it did so, its decision became binding precedent. See Jones v. Coughlin, 45 F.3d 677, 679 (2d Cir.1995) (per curiam ) (A decision of a panel of this Court is binding unless and until it is overruled by the Court en banc or by the Supreme Court.). Distajo has not been overturned (indeed, it has been followed in recent cases, see, e.g., PPG Indus., Inc. v. Webster Auto Parts Inc., 128 F.3d 103, 107-08, 109 (2d Cir.1997); Doctor's Assocs., Inc. v. Jabush, 89 F.3d 109, 113-14 (2d Cir.1996)), and petitioners identify no Supreme Court case that puts its validity into question. 15 Petitioners also argue that, even if Distajo applies, there nevertheless had not been sufficient litigation to justify the district court's deciding the issue. This argument fails as well. Distajo did not predicate a district court's ability to decide the issue of waiver on the condition that the party had engaged in substantial litigation. Rather, the court expressly held that a district court could decide the issue whenever the party seeking arbitration had engaged in any prior litigation. Distajo, 66 F.3d at 456 n. 12. Such a rule saves judicial resources and prevents needless line-drawing. It makes little sense to require a court to first determine whether a party has engaged in substantial litigation before it can reach the issue of waiver, which itself requires determination of the same question. We find that the district court properly concluded that it could decide the issue of waiver in light of petitioners' active participation in the litigation.