Opinion ID: 3064630
Heading Depth: 4
Heading Rank: 1

Heading: Waiver of Right to Arbitrate

Text: The United States first contends that the award was in manifest disregard of the law because Park Place waived its right to arbitration under the JVA. The United States raised the waiver issue before the arbitration panel in its response to Park Place’s arbitration demand and before the district court in its motion to vacate. The panel rejected the United States’ argument without explanation and the district court held it need not revisit the issue. Although the United States asserts that waiver is a question for courts, not arbitrators, we need not address this question because no matter the appropriate decision-maker, our review under 9 U.S.C. § 10 is the same. Because the United States now raises this argument as part of its motion to vacate, we review the arbitration award for whether it exhibits a manifest disregard of the law of waiver. [5] The right to arbitration, like any other contract right, can be waived. See Van Ness Townhouses v. Mar Indus. Corp., 862 F.2d 754, 758-59 (9th Cir. 1988). However, we have emphasized that “waiver of the right to arbitration is disfavored because it is a contractual right, and thus ‘any party arguing waiver of arbitration bears a heavy burden of proof.’ ” Id. at 758 (quoting Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir. 1982)). To demonstrate waiver of the right to arbitrate, a party must show: “(1) knowledge of an existing right to compel arbitration; (2) acts inconsistent with that existing right; and (3) prejudice to the party opposing arbitration resulting from such inconsistent acts.” Fisher v. A.G. Becker Paribas Inc., 791 4686 UNITED STATES v. PARK PLACE ASSOCIATES F.2d 691, 694 (9th Cir. 1986).10 The United States cannot satisfy the second or third Fisher requirements. We find no evidence that Park Place abandoned its right to arbitrate. Park Place first sought arbitration in 1997 in Florida. The United States opposed that effort and prevailed in part. Park Place subsequently asked the AAA to hold the matter in abeyance to pursue suit, first in California and then in the Court of Federal Claims. It then renewed its arbitration demand in 2003. As the United States knows well, Park Place has vigorously pursued its remedies, and the United States has just as vigorously resisted its efforts at every step. Park Place has not abandoned its arbitration rights; it has only moved the battle from one venue to another. [6] In any event, the United States has not shown it has been prejudiced by the delay. Its sole assertion of prejudice rests on an observation by the Court of Federal Claims, of “the extreme burdens of discovery, which were disproportionately imposed on [the United States].” This statement, made when considering Park Place’s motion to stay litigation pending arbitration, is insufficient to establish prejudice. See, e.g., Fisher, 791 F.2d at 697 (holding that even extensive discovery into both arbitrable and non-arbitrable claims before mov10 Waiver of a right is distinct from forfeiture of a right. As we have explained, “[w]aiver is ‘the intentional relinquishment or abandonment of a known right,’ whereas forfeiture is ‘the failure to make the timely assertion of [that] right.’ ” United States v. Jacobo Castillo, 496 F.3d 947, 952 n.1 (9th Cir. 2007) (en banc) (alteration in original) (quoting United States v. Olano, 507 U.S. 725, 733 (1993)). Park Place asserts that a waiver argument may not be raised after an arbitration award has been entered. We do not find any such limitation in the FAA. Although § 10 does not specifically refer to waiver as grounds for vacatur, it does not discuss any specific legal grounds for vacatur. Instead, its general language encompasses any way in which “the arbitrators exceeded their powers.” 9 U.S.C. § 10(a)(4). Presumably an arbitration panel exceeds its power by entering an award in manifest disregard of law where the prevailing party plainly waived its right to arbitration in a way that prejudiced an opposing party. UNITED STATES v. PARK PLACE ASSOCIATES 4687 ing to compel arbitration is insufficient prejudice for a waiver if that discovery is available for trial of the non-arbitrable claim in federal district court). Moreover, the costs of discovery referred to by the Court of Federal Claims were sunk costs, not marginal costs, and have no bearing on the prejudice the United States would suffer by proceeding through arbitration. It is far from clear that the arbitration panel was wrong, much less that the award exhibits a manifest disregard of law. In light of the deference we afford the arbitrators, we decline to accept this basis for vacatur.