Opinion ID: 477852
Heading Depth: 2
Heading Rank: 1

Heading: Waiver of Arbitration

Text: 8 Letizia argues that defendants waived any right they may have had to arbitrate the dispute because they did not seek arbitration from the earliest point in the federal litigation. Arbitration, Letizia argues, must be asserted as an affirmative defense when a defendant first answers a complaint. See Fed.R.Civ.P. 8(c). It is undisputed that defendants did not seek arbitration until after the close of discovery, nine months after their answer was filed. Defendants reply, however, that they did not seek arbitration initially because such a move was futile under the then-prevailing law in this circuit. 9 Under facts quite similar to this case, we recently held that there had been no waiver of the right to arbitrate. Fisher v. A.G. Becker Paribas, Inc., 791 F.2d 691 (9th Cir.1986). We stated in Fisher that, although it is certainly possible to waive contractual rights to arbitration, such waivers are not favored. Id. at 694. We stated, A party seeking to prove such a waiver must demonstrate: (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. Id. 10 As our Fisher decision makes clear, there could be no waiver here because there was no existing right to arbitration. After our decision in DeLancie v. Birr, Wilson & Co., 648 F.2d 1255, 1259 n. 4 (9th Cir.1981), the intertwining doctrine was, for all practical purposes, the law of this circuit. See Fisher, 791 F.2d at 694-95. As in Fisher, defendants here correctly perceived that a motion to compel arbitration would have been futile because of the apparent intertwining of arbitrable and nonarbitrable claims. 2 See id. at 695. Clearly, then, there was no existing right to arbitrate when this suit was filed. Thus, there could have been no waiver. See id. at 697. 3 11