Opinion ID: 65385
Heading Depth: 2
Heading Rank: 1

Heading: Invocation of the Judicial Process

Text: In the vast majority of cases involving the question of waiver, it is the party being sued that belatedly seeks arbitration. Here, in contrast, it is the plaintiff, who, despite filing suit and pursuing her claims in court for more than ten months, now seeks to compel arbitration. The district court concluded that Nicholas substantially invoked the judicial process by filing suit and pursuing her claims for over ten months before invoking her right to arbitrate. We agree. Although this circuit has not expressly drawn a distinction between the waiver analysis when applied to a plaintiff and that applied to a defendant, we have recognized that the decision to file suit typically indicates a disinclination to arbitrate. Joseph Chris Pers. Servs. Inc. v. Rossi, 249 Fed.Appx. 988, 991 (5th Cir.2007) (unpublished); see also Miller, 781 F.2d at 497 (concluding that a party revealed a disinclination to resort to arbitration by, among other things, filing suit in state court without mentioning its desire to arbitrate). We have not, however, gone as far as the Seventh Circuit on this issue, and we do not do so here, as we continue to require a showing of prejudice, even if there is a substantial invocation of the process. See Cabinetree of Wis., Inc. v. Kraftmaid Cabinetry, Inc., 50 F.3d 388, 390 (7th Cir.1995) (holding that a party's election to proceed before a nonarbitral tribunal for the resolution of a contractual dispute is a presumptive waiver of the right to arbitrate.). [3] We conclude that the act of a plaintiff filing suit without asserting an arbitration clause constitutes substantial invocation of the judicial process, unless an exception applies. Indeed, short of directly saying so in open court, it is difficult to see how a party could more clearly evince[ ] a desire to resolve [a] . . . dispute through litigation rather than arbitration, Gulf Guar., 304 F.3d at 484, than by filing a lawsuit going to the merits of an otherwise arbitrable dispute. We emphasize that the legal standard for waiver is the same regardless of which party is the party alleged to have waived arbitration. Differences between the two sides arise from the voluntariness and timing of their actions, not the legal standard. That is not to say there can be no exceptions. There are lawsuits that can be filed that would not be inconsistent with seeking arbitration. For example, a plaintiff might file suit solely to obtain a threshold declaration as to whether a valid arbitration agreement existed. See Republic Ins. Co. v. Paico Receivables LLC, 383 F.3d 341, 345 (5th Cir.2004) (determining that party's decision to file suit to determine whether a valid arbitration clause existed did not indicate a disinclination to arbitrate because filing suit for this purpose is not inconsistent with the right to arbitrate). A plaintiff might also have to file suit to obtain injunctive relief pending arbitration. See Joseph, 249 Fed.Appx. at 991 (refusing to conclude that filing suit in that case indicated a disinclination to arbitrate because plaintiff filed suit solely to obtain injunctive relief pending arbitration and both state law and the parties' contract permitted filing suit for this limited purpose). Other situations may arise justifying an exception; the list here should not be seen as exhaustive. This case presents no situation that would constitute an exception. Rather, as the district court concluded, Nicholas had no reason to file suit other than to litigate the claims she now seeks to arbitrate. Under these circumstances, we find that Nicholas's decision to file suit on her otherwise arbitrable claims constitutes substantial invocation of the judicial process as to those claims. Other evidence supports the district court's conclusion that Nicholas engaged in substantial litigation activity before asserting her right to arbitration. She filed a motion to remand following removal, arguing that ERISA did not completely preempt her state law claims; the district court disagreed and denied that motion. Nicholas's belated decision to seek arbitration is particularly troubling given that it came on the heels of this adverse ruling. [4] See Cabinetree, 50 F.3d at 391 (expressing particular concern with plaintiffs that want to test the waters in litigation before deciding whether they would be better off in arbitration). Moreover, after the district court denied the motion to remand, Nicholas filed an amended complaint, made initial disclosures, engaged in a meet-and-confer, and responded to KBR's discovery requests. The motion to compel arbitration also arrived shortly after a counsel change. Before this court, Nicholas now argues as an excuse for her substantial invocation of the judicial process that neither she nor her lawyers had a copy of the Agreement when she filed suit, and thus she claims that she sued KBR in ignorance of her right to arbitrate. However, Nicholas failed to raise this point in the district court. KBR specifically argued in its response to Nicholas's motion to compel arbitration that Nicholas was aware of the Agreement's arbitration clause when she filed her original petition in January 2007. Yet, Nicholas chose not to file a reply and respond to that argument. Indeed, a review of the record reveals that Nicholas nowhere sought to contravene KBR's claim that she waived arbitration in the court below. Thus, we need not address Nicholas's arguments concerning her lack of knowledge of an agreement to arbitrate or her need to authenticate it for the first time on appeal. See, e.g., LeMaire v. Louisiana, 480 F.3d 383, 387 (5th Cir.2007) ([A]rguments not raised before the district court are waived and cannot be raised for the first time on appeal.). Even if we reached this question for the first time on appeal, the result would not be different. Despite Nicholas's claims in the brief, the evidence from her deposition does not support her claim of ignorance. Indeed, it is a somewhat curious argument to claim ignorance of an agreement upon which one sues. As stated above, the deposition shows that she had the Agreement all along in her husband's files and may have seen a copy of it before the spring 2007 time frame when she found the original. She admits discussing the issue of arbitration with a KBR employee before she filed suit, which at least put her on notice of the need to inquire. Nicholas substantially invoked the judicial process. Accordingly, we agree with the district court's resolution of this prong.