Court Opinion

ID: 4710659
Source: CourtListenerOpinion
Date Created: 2021-08-11 21:01:28.616741+00
Date Added: 2024-06-11T08:07:04.573338
License: Public Domain

United States Court of Appeals
                      For the First Circuit
No. 20-1550

                   TODDLE INN FRANCHISING, LLC,

                       Plaintiff, Appellee,

                                v.

 KPJ ASSOCIATES, LLC; KATHIE L. MURPHY; PATRICK M. MURPHY; JAMES
  O. HASKELL; KENNEBUNK CHILDREN'S ACADEMY, LLC; MURPHY-HASKELL
                         PROPERTIES, LLC,

                      Defendants, Appellants.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                    FOR THE DISTRICT OF MAINE

              [Hon. Jon D. Levy, U.S. District Judge]

                              Before

                       Howard, Chief Judge,
                     Thompson, Circuit Judge,
                       and Katzmann, Judge.*

     Seth W. Brewster, with whom Micah A. Smart, John S. Bjorn,
and Eaton Peabody were on brief, for appellants.
     Timothy J. Bryant, with whom Benjamin S. Piper and Preti
Flaherty were on brief, for appellee.

                          August 11, 2021

     * Of the United States Court of International Trade, sitting
by designation.
            THOMPSON, Circuit Judge.

                               Stage-Setting

            This case is about a business relationship gone sour.1

            Starting in July 2006, KPJ Associates, LLC ("KPJ") ran

a daycare in Kennebunk, Maine as a franchisee of Toddle Inn

Franchising, LLC ("Toddle").         The contract between them covered

many topics — not a surprise, given the realities of today's

complex commercial world.       A few illustrations suffice to make the

point:

  •   The   contract,    for   example,   let   KPJ   use   Toddle's    system

      (identified by the federally-registered trademark "TODDLE

      INN"),   which     involved    uniform    standards,       methods,   and

      procedures for the daycare's operation.

  •   The contract also imposed a bunch of "don'ts" and "dos" on

      KPJ, to kick in when the agreement ended.                  The "don'ts"

      included not continuing to run the daycare under the contract;

      not   continuing    to   use   Toddle's    system     or    confidential

      material (the latter term broadly defined to cover things

      like competitively-sensitive information); and not continuing

      1Because today's appeal emanates from a motion to compel
arbitration and stay federal-court proceedings, "we draw the
relevant facts from the operative complaint and the documents
submitted to the district court in support of" that "motion." See
Cullinane v. Uber Techs., Inc., 893 F.3d 53, 55 (1st Cir. 2018).
                                     - 2 -
          to    hold    itself     out    to    the    public    (either     directly    or

          indirectly) as a Toddle franchisee. The "dos" included paying

          Toddle all sums owed, specifically listing damages, costs and

          expenses, and reasonable attorneys' fees.

     •    And the contract provided that all disputes be resolved by

          arbitration under the Federal Arbitration Act ("FAA"); that

          Toddle       could     sue     for    injunctive       relief,     despite    the

          arbitration          provision;      and     that     Toddle     could   recover

          reasonable attorneys' fees and costs incurred in any legal

          action or other proceeding if a dispute arose.2

                 One Friday in July 2018, KPJ notified Toddle that it was

ending the franchise agreement effective 6 p.m. and that it would

open another daycare at the same site the following Monday.                              A

none-too-pleased Toddle filed a federal complaint against KPJ that

Tuesday, charging unfair competition under the federal Lanham Act,

plus breach of contract and trade-secret misappropriation under

Maine law.3           Among other requests, Toddle asked for an injunction

to       stop   KPJ     from     infracting      the    contract's       post-termination

provisions, for payment of "all sums owing to Toddle," and for

reasonable attorneys' fees and costs.                    Toddle simultaneously moved

       We will quote the key parts of the contract as we move along
          2

(removing any excess capitalization, however).
       Toddle also sued KPJ's guarantors to the contract.
          3                                                                        But for
simplicity, we refer only to KPJ.
                                               - 3 -
for    a    temporary    restraining      order   ("TRO").       And    one   of   the

arguments made in opposing the motion was that Toddle's Lanham Act

claim could not succeed, because of Dastar Corp. v. Twentieth

Century Fox Film Corp. ("Dastar"), 539 U.S. 23 (2003).                        After a

hearing that same day, the judge denied the TRO motion, without

discussing Dastar.             (We, however, will have much to say about

Dastar momentarily.)

                 Toddle moved a few weeks later to compel arbitration and

stay court proceedings, arguing that the dispute came within the

contract's        arbitration     clause.     KPJ     opposed,   contending        most

relevantly that Toddle waived its right to compel arbitration by

filing its action in federal court and asking for what amounts to

damages, instead of pushing for arbitration from the get-go.                        KPJ

also answered Toddle's complaint, raising as one of its affirmative

defenses that Dastar barred "each and every" claim by Toddle.                      And

KPJ counterclaimed for breach of contract, fraud, and unjust

enrichment (among other claims), alleging (in part) that Toddle

never gave it "any operating manual or training."

                 The   judge    ultimately    compelled      arbitration,       after

pertinently concluding that Toddle had not acted inconsistently

with       its   arbitration    rights,     because    the   contract    explicitly

authorized Toddle to seek injunctive relief; and that KPJ would

not be unfairly prejudiced by having to arbitrate, seeing how the

                                       - 4 -
sides had not yet participated in any formal discovery.                 The

arbitrator eventually found for Toddle, finding (for example) that

KPJ had "misappropriated" parts of Toddle's system (including "its

forms and policies," and "the distinctive look and feel of the

Toddle . . . facility") and "made it appear that it was a seamless

continuation from the prior Toddle . . . franchise."            Rejecting

KPJ's counterclaims, the arbitrator awarded Toddle $79,000 in

compensatory damages and $145,852 in attorneys' fees and expenses.

Back in federal court, Toddle then moved the judge to confirm the

award, asking as well to recover additional attorneys' fees and

expenses incurred in pressing this motion.      KPJ objected, but only

"insofar" as the motion sought extra attorneys' fees and expenses

"not included in the arbitration award."        And long story short,

the judge confirmed the award, awarded the additional attorneys'

fees and expenses, and entered judgment accordingly.

            Which brings us to today, with KPJ's brief raising three

legal    theories   for   reversal.   The   first   is   that   the   judge

(supposedly) lacked subject-matter jurisdiction because Toddle

presented a frivolous Lanham Act claim, given Dastar.4          The second

     4 Subject-matter jurisdiction means the power to resolve the
parties' dispute. See, e.g., Reyes-Colón v. United States, 974
F.3d 56, 58 (1st Cir. 2020). And one of the ways a federal court
can get subject-matter jurisdiction over a case is through what is
known as federal-question jurisdiction.     See 28 U.S.C. § 1331
(granting federal district courts original jurisdiction over "all
                              - 5 -
is that Toddle (supposedly) waived its right to arbitrate by opting

to litigate before demanding arbitration.    And the third is that

the judge (supposedly) had no right to award additional attorneys'

fees and costs.   Toddle finds none of these theories persuasive.

Neither do we, for reasons we now explain.

                           Jurisdiction

          We start (as we must) with subject-matter jurisdiction,

see Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94

(1998), considering the issue with fresh eyes ("de novo," in judge-

speak), see Woo v. Spackman, 988 F.3d 47, 50 (1st Cir. 2021), and

seeing if "a federal claim is made manifest within the four corners

of [Toddle's] complaint," see Viqueira v. First Bank, 140 F.3d 12,

17 (1st Cir. 1998) — all while also accepting the complaint's facts

as true and construing them in the light most sympathetic to

Toddle, see Royal v. Leading Edge Prods., Inc., 833 F.2d 1, 1 (1st

Cir. 1987).   See generally Lawless v. Steward Health Care Sys.,

LLC, 894 F.3d 9, 17 (1st Cir. 2018) (underscoring that "the

propriety of federal-question jurisdiction must be assayed based

on 'what necessarily appears in the plaintiff's statement of [its]

civil actions arising under the Constitution, laws, or treaties of
the United States").
                              - 6 -
own claim'" (quoting Franchise Tax Bd. v. Constr. Laborers Vacation

Tr., 463 U.S. 1, 10 (1983))).5

          Toddle's     complaint         invoked      federal-question

jurisdiction via the Lanham Act (and supplemental jurisdiction

over the state claims6) — as the parties agree, the FAA does not

independently provide federal jurisdiction.        See, e.g., Hall St.

Assocs. v. Mattel, Inc., 552 U.S. 576, 581-82, 582 n.2 (2008).      At

the risk of oversimplification, the Lanham Act (so far as pertinent

to this case) protects against consumer confusion over the source

or sponsorship of goods or services.      See, e.g., Dastar, 539 U.S.

     5  Caselaw distinguishes between "facial" and "factual"
subject-matter-jurisdiction attacks. See Torres-Negrón v. J & N
Records, LLC, 504 F.3d 151, 162 (1st Cir. 2007). A facial attack
contests jurisdiction based on well-pleaded allegations in the
complaint — which a court takes as true. Id. A factual attack
contests jurisdiction in fact, regardless of what the complaint
says — and a court (broadly speaking, and according to "substantial
authority") need not accept the plaintiff's allegations as true
but can "weigh the evidence and satisfy itself as to the existence
of its power to hear the case." Id. at 163 (quoting Lawrence v.
Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990)). KPJ's attack is a
facial challenge, what with its opening brief referencing the well-
pleaded-complaint rule — which provides that a claim arises under
federal law only if the federal question appears on the face of a
properly pleaded complaint. See Viqueira, 140 F.3d at 17. KPJ's
lead brief cites and quotes Viqueira, by the way (a case we cited
above).
     6 A statute — 28 U.S.C. § 1367 — outlines "the supplemental
jurisdiction of the federal courts, which is to say their
jurisdiction over matters related to matters over which federal
jurisdiction is explicitly conferred." Lefkovitz v. Wagner, 395
F.3d 773, 782 (7th Cir. 2005) (Posner, J., for the court).
                                 - 7 -
at 31 n.4.    And section 43(a) of the Lanham Act does that by

creating a federal cause of action for anyone damaged by another's

          use[] in commerce any word, term, name,
          symbol, or device, or any combination thereof,
          or any false designation of origin, false or
          misleading description of fact, or false or
          misleading representation of fact, which . . .
          is likely to cause confusion, or to cause
          mistake, or to deceive as to the affiliation,
          connection, or association of such person with
          another person, or as to the origin,
          sponsorship, or approval of his or her goods,
          services, or commercial activities by another
          person . . . .

See 15 U.S.C. § 1125(a)(1) (also known as § 43(a) of the Act).

          Trying to fit its case into the Lanham Act, Toddle's

complaint alleged that KPJ deceived consumers by letting the public

think it is not involved with Toddle, when actually it still used

Toddle's system.   Just consider these choice quotes, all lifted

from Toddle's complaint:

  •   "KPJ has been informing customers that it would no longer be

      operating under the name TODDLE INN but stating that its

      services would otherwise remain the same."

  •   KPJ has told "parents . . . that all Toddle . . . contracts

      are carrying forward" and that KPJ "would keep all the same

      policies in place" at the Kennebunk locale, with "the name"

      being "the only thing changing."

                               - 8 -
  •   "Since termination, KPJ has competed unfairly with Toddle

      . . . at its TODDLE INN Kennebunk daycare center by holding

      itself out to the public as unaffiliated with Toddle . . .,

      when in fact it continues to use the Toddle . . . [s]ystem in

      providing daycare services" — as shown "by [KPJ's] carrying

      on   the    same   manner   of   operations   as   [it]   did   prior   to

      termination, in the same location, and with the same staff."

  •   "In so doing KPJ has confused, misled, and deceived the public

      as to the origin and affiliation of its services as a means

      of generating or retaining business."

            Critically for our purposes, just because a complaint

alleges a federal claim does not automatically mean that the

district court has subject-matter jurisdiction.                  And that is

because    a     court   cannot   consider     "wholly   insubstantial        and

frivolous" claims.       See Bell v. Hood, 327 U.S. 678, 682-83 (1946);

see also Lawless, 894 F.3d at 18.          One way a claim can get tagged

wholly insubstantial and frivolous is if it is "foreclosed by"

Supreme Court precedent — i.e., if the precedent "leave[s] no room

for the inference that the questions sought to be raised" by the

claim "can be the subject of controversy."           See Hagans v. Lavine,

415 U.S. 528, 543 (1974) (quotation marks omitted); see also Hatch

v. Town of Middletown, 311 F.3d 83, 84 n.2 (1st Cir. 2002).                   But

— and it is a big "but" — the flipside is that Supreme Court

                                       - 9 -
precedent    "that   merely   render[s]"   a   "claim   of   doubtful   or

questionable merit" does not affect jurisdiction.        See Hagans, 415

U.S. at 538 (emphasis added).

            Put this all together, and only the most extreme cases

will flunk this substantiality test.           See Duke Power Co. v.

Carolina Envtl. Study Grp., 438 U.S. 59, 70 (1978) (explaining

that "the test is whether the cause of action alleged is so

patently without merit as to" preclude jurisdiction (quotation

marks omitted); see generally Boothby v. Soc. Sec. Admin. Comm'r,

132 F.3d 30, 1997 WL 727535, at *1 (1st Cir. 1997) (table)

(collecting cases and stating that raising a colorable federal

claim is hardly an "onerous" task).        To again quote our judicial

superiors:

            [T]he district court has jurisdiction if "the
            right of the petitioners to recover under
            their complaint will be sustained if the
            Constitution and laws of the United States are
            given one construction and will be defeated if
            they are given another," unless the claim
            "clearly appears to be immaterial and made
            solely   for   the   purpose    of   obtaining
            jurisdiction or where such a claim is wholly
            insubstantial and frivolous."

Steel Co., 523 U.S. at 89 (citation omitted and quoting Bell, 327

U.S. at 682-83, 685).    And given how charitable the substantiality

standard is, it should come as no surprise that a plaintiff can

successfully invoke federal jurisdiction and yet later lose on

some other basis — like, say, failure to state a claim on which
                                 - 10 -
relief may be granted.        See Shapiro v. McManus, 577 U.S. 39, 45

(2015); see also Bell, 327 U.S. at 682.

            KPJ pins its reversal hopes on the idea that Dastar

"directly and unequivocally" forecloses Toddle's Lanham Act claim.

Call us unconvinced.

            Dastar copied, edited, and sold a video series that

relied entirely on footage from an older series whose copyright

had expired — oh, and Dastar peddled the series as its own.              See

539 U.S. at 25-27.     The question presented was whether Dastar made

a "false designation of origin . . . which . . . is likely to cause

confusion . . . as to the origin . . . of [Dastar's] goods."             Id.

at   31   (emphasis   added   and   quoting   15   U.S.C.   § 1125(a)(1)).

Answering "no," the Supreme Court held that the italicized phrase

— "origin of goods" — "refers to the producer of the tangible goods

that are offered for sale, and not to the author of any idea,

concept, or communication in those goods."          Id. at 37-38.    Reduced

to its essence, the Court's reasoning ran this way:                 Congress

passed the Lanham Act "to make 'actionable the deceptive and

misleading use of marks,' and 'to protect persons engaged in

commerce against unfair competition.'"             Id. at 28 (quoting 15

U.S.C. § 1127).       Because the Act was "not designed to protect

originality" like patent and copyright laws, the Court thought

that "hold[ing] otherwise would be akin to finding that § 43(a)

                                    - 11 -
created a species of perpetual patent and copyright, which Congress

may not do."    Id. at 37.    So "Dastar," as one court aptly put it,

          thus had the right (so far as the Lanham Act
          is concerned) to incorporate into its videos
          footage taken and edited by others, provided
          that it manufactured the finished product and
          did not mislead anyone about who should be
          held responsible for shortcomings.

Bretford Mfg., Inc. v. Smith Sys. Mfg. Corp., 419 F.3d 576, 580

(7th Cir. 2005).

          Trying to shoehorn our case into Dastar, KPJ argues that

Toddle is the "author" of the Toddle system — a "concept (or

method) of running a daycare business," to quote KPJ's appellate

papers.   And, the argument continues, KPJ (emphasis ours) "took

and   used"    the   system   Toddle   "allegedly"   developed,   "made

modifications . . . and produced its own materials, ideas, and

programs" — much like Dastar did when it modified the original

footage and produced its very own video series.        Which means, at

least in KPJ's mind, that Toddle's claim is essentially the same

claim the Supreme Court rejected in Dastar.

          The short and simple response, however, is that Toddle's

complaint alleges nothing at all about KPJ's modifying the system.

Not one word.    Actually, the complaint alleges the exact opposite:

that (for example, and as noted above) KPJ is running its new

daycare with the same Toddle system, providing the same services

at the same location and using the same staff.             Given this
                                 - 12 -
distinction between Toddle's Lanham Act claim and Dastar's, we

cannot say that Dastar "inescapably render[s]" Toddle's "claim

frivolous."           See Hagans, 415 U.S. at 538 (emphasis added).                So

even       if   we    had    some    doubts     about   Toddle's   theory,   Toddle's

allegations are not such nonsense that they fail to raise a

colorable            federal      claim       under     the    not-difficult-to-meet

substantiality standard.               After all (and to use slightly different

words than before), a "federal claim need not have merit . . . for

the court to assume jurisdiction" — rather, the claim need only be

"seemingly           valid   or     genuine,"    and    not   "wholly   insubstantial,

immaterial, or frivolous."                See Lawless, 894 F.3d at 18 (quotation

marks and citations omitted, plus emphasis added).                           And that

definition fits this situation exactly.

                The bottom line then is that KPJ's Dastar-based theory

does not help its cause.7                 And that is that for the jurisdiction

issue.

       KPJ's opening brief seemingly faults the judge for not
       7

"independent[ly]" checking his "own subject-matter jurisdiction"
before sending the dispute to arbitration — though KPJ admits that
it "did not raise the [jurisdiction]     issue" below.   A judge's
subject-matter-jurisdiction determination may be implicit as well
as explicit, however. See United Seniors Ass'n, Inc. v. Philip
Morris USA, 500 F.3d 19, 23 (1st Cir. 2007) (citing Baella-Silva
v. Hulsey, 454 F.3d 5, 10 (1st Cir. 2006)). Conceding as much in
its reply brief, KPJ asks us to "make an independent [i.e., de
novo] determination of whether federal subject matter jurisdiction
exists" — a job we have just done.
                                            - 13 -
                        Waiver of Right to Arbitrate

           We next address KPJ's charge that the judge erred in

concluding that Toddle did not waive its right to arbitrate through

its litigation conduct, giving fresh-eyed review both to the

judge's "interpretation of the arbitration agreement" and to his

"decision . . . to compel arbitration."              See Ouadani v. TF Final

Mile LLC, 876 F.3d 31, 36 (1st Cir. 2017).

           The    FAA    backs   "a     liberal     federal    policy   favoring

arbitration agreements," see Moses H. Cone Mem'l Hosp. v. Mercury,

460 U.S. 1, 24 (1983), recognizing that arbitration provides a

more   simple    and    less   costly   way    of   resolving     disputes     than

litigation, see Joca-Roca Real Estate, LLC v. Brennan ("Joca-

Roca"), 772 F.3d 945, 949 (1st Cir. 2014).               Like any other contract

right, the right to arbitrate may be waived either explicitly or

through an implicit course of conduct.                   But there is a strong

presumption      against   inferring      waiver     —    so   strong   that    any

"reasonable doubts as to whether a party has waived the right to

arbitrate should be resolved in favor of arbitration."                  See In re

Tyco Int'l Ltd. Sec. Litig. ("Tyco"), 422 F.3d 41, 44 (1st Cir.

2005).

           As the party arguing waiver by conduct, KPJ bears the

burden of showing more than a "mere delay," see Joca-Roca, 772

F.3d at 948 (quoting Creative Sols. Grp. v. Pentzer Corp., 252

                                      - 14 -
F.3d 28, 32 (1st Cir. 2001)) — it must show at least a "modicum of

prejudice" too, see Tyco, 422 F.3d at 44 (quoting Rankin v.

Allstate Ins. Co., 336 F.3d 8, 12 (1st Cir. 2003)).                       Factors to

consider (though no single factor is controlling) include the

extent of Toddle's "delay" in demanding arbitration, the degree to

which       Toddle     "participated        in    the     litigation,"       whether

significant "discovery and other litigation-related activities"

occurred, the "proximity" of Toddle's demand "to an anticipated

trial date," and whether the arbitration referral "prejudiced"

KPJ.       See Joca-Roca, 772 F.3d at 948.          So — and it (almost) goes

without saying — this is an individualized inquiry, particular to

each case's circumstances.              See Tyco, 422 F.3d at 46.

              Toddle moved to compel arbitration 27 days after filing

suit.      During that less-than-a-month stretch, Toddle sparred a bit

with KPJ over the TRO issue8 and asked KPJ to preserve evidence in

KPJ's possession. These hardly seem like the kind of foot-dragging

delay      tactics    that    are   inconsistent        with   Toddle's    right   to

arbitrate.           Just    consider    Joca-Roca.        The   plaintiff     there

"commenced a civil action, vigorously prosecuted it, and then —

after many months of active litigation — tried to switch horses

midstream to pursue an arbitral remedy."                  Joca-Roca, 772 F.3d at

       8   FYI, the TRO hearing lasted 47 minutes.
                                         - 15 -
948.       We used "vigorously" and "active" as shorthand to describe

how "[d]uring the . . . pretrial proceedings, the parties conducted

sixteen depositions, propounded and answered interrogatories, and

produced and exchanged thousands of pages of documents" — with a

magistrate      judge   also   holding   "no   fewer   than   four   telephone

conferences       to    resolve   discovery     disputes      and    scheduling

conflicts."       Id. at 947.     And given all this, we had no trouble

concluding that "the plaintiff's conduct evidenced a clear intent

to forgo arbitration and resolve the disputed matter through

litigation."      Id. at 949.9

              KPJ spends time arguing that Toddle waived its right to

arbitrate by pursuing injunctive relief in court.             True, as KPJ is

quick to observe, the contract provides that "all disputes" will

be arbitrated.10        But the contract also provides (our emphasis)

       While Joca-Roca was an "open-and-shut" case of waiver and
       9

is not "alone . . . determinative," as KPJ notes, its analysis
guides us — and KPJ offers no persuasive reason why Joca-Roca
cannot help illuminate the path to decision.
       10   The arbitration clause pertinently says that
              [a]ll disputes between or among the parties
              whether now existing or arising in the future,
              including without limitation, any and all
              claims,   defenses,    counterclaims,    cross
              claims, third party claims and intervenor
              claims, whether or not arising from or related
              to the negotiation, execution and performance
              of this agreement or the transaction to which
              this agreement relates shall be settled by
              arbitration under the [FAA] . . . .        The
              arbitrator may also award attorney[s'] fees as
                                  - 16 -
that        Toddle   may   pursue     injunctive     relief   in   court,

"notwithstanding the arbitration clause."11         KPJ still urges us to

find    ambiguity,    because   the   arbitration    clause   covers   "all

disputes."      The gaping hole in this argument is — as just noted —

that the injunctive-relief clause unambiguously carves out an

exception for injunctive relief.

              Somewhat relatedly, KPJ accuses Toddle of impermissible

forum shopping — taking the case to court and then asking for

arbitration after losing on its TRO request.          But once again, the

contract expressly permitted Toddle to seek injunctive relief in

court before seeking arbitration.            Cf. Teradyne, Inc. v. Mostek

Corp., 797 F.2d 43, 51 (1st Cir. 1986) (holding that a district

judge "can grant injunctive relief in an arbitrable dispute pending

arbitration," and explaining that "the congressional desire to

enforce arbitration agreements would frequently be frustrated if

the courts were precluded from issuing preliminary injunctive

              set forth in [the attorneys' fees/costs
              clause]. The arbitrator shall have continuing
              jurisdiction to implement his/her decision.
       11   The injunctive-relief clause states that
              [n]otwithstanding   the  arbitration   clause
              . . ., [Toddle] may bring an action for
              injunctive   relief   in  any  court   having
              jurisdiction to enforce [Toddle's] non-
              competition[,] trademark, and/or propriety
              rights, in order to avoid irreparable harm.
                                    - 17 -
relief to preserve the status quo pending arbitration and, ipso

facto, the meaningfulness of the arbitration process").

          KPJ fares no better in arguing that Toddle waived its

arbitration right by including a damages request in its complaint

for injunctive relief. And that is because KPJ's lead brief offers

no on-point case support for this theory.      Which makes this claim

a nonstarter, because "developing a sustained argument out of . . .

legal precedents" is a party's job, not this court's.          See Town of

Norwood v. FERC, 202 F.3d 392, 405 (1st Cir. 2000); accord Díaz-

Alarcón v. Flández-Marcel, 944 F.3d 303, 313 (1st Cir. 2019); see

also Joca-Roca, 772 F.3d at 948 (highlighting that "[t]he party

advocating waiver has the burden of demonstrating prejudice").

          Undeterred,   KPJ   insists   that   it   suffered    prejudice

because it had "to direct counsel to research and respond to

[Toddle's] motion for temporary restraining order at an emergency

hearing on the same day that motion was filed."          Of course, if

Toddle had asked for injunctive relief in arbitration, KPJ would

have done exactly the same thing it did in the district court —

"direct[ed] counsel . . . to respond."    And KPJ's lead brief cites

no authority suggesting that it can carry its prejudice burden

through defense costs it would have suffered in any forum.

          KPJ also argues that it was prejudiced because it was

"forced to address informal written requests for discovery from

                               - 18 -
Toddle . . . while before the [d]istrict [c]ourt" and had to file

an answer and counterclaims "tailor[ed]" to that forum.   What KPJ

complains about is simply the reality of dispute resolution,

whether in arbitration or litigation.       And KPJ's lead brief

supplies no caselaw indicating that it can satisfy its prejudice

burden by showing it had to do certain things in response to a

suit Toddle had every right to file.

          Nor does KPJ's claim that it was "required to operate

[its] business under the specter of a public court case" change

our minds — a claim that strikes us as odd, given that it is KPJ

that is insisting that the case be tried in "public court."

Anyway, KPJ's argument fails because Toddle had the right to seek

injunctive relief in court.12

     12 KPJ's reply brief cites Rankin v. Allstate Ins. Co., 336
F.3d 8 (1st Cir. 2003), Cornell & Co. v. Barber & Ross Co., 360
F.2d 512 (D.C. Cir. 1966) (per curiam), and In re Citigroup, Inc.,
Capital Accumulation Plan Litig. ("Citigroup"), 376 F.3d 23 (1st
Cir. 2004), as if they are silver bullets in its appeal.        But
unlike here, in Rankin a party did not invoke an arbitration clause
"until after discovery had closed and the long-scheduled trial
date had almost arrived." See 336 F.3d at 13. And unlike here,
in Cornell & Co. "the litigation machinery had been substantially
invoked" when a party tried to exercise its arbitration rights.
See 360 F.2d at 513. And also unlike here, in Citigroup "[t]hree
full years had elapsed between the filing of the complaint" and
the motion to stay and compel arbitration — with lots of
depositions taken and case-management conferences held. See 376
F.3d at 27.    Put simply then, these cases are not difference-
makers for KPJ.
                                - 19 -
          So the judge did not err in ruling that Toddle did not

waive its right to demand arbitration.

                Additional Attorneys' Fees and Costs

          We last consider KPJ's complaint that the judge slipped

in awarding Toddle attorneys' fees and costs it incurred getting

the arbitration award confirmed.      Ordinarily, we review such an

issue for abuse of discretion — mindful that a material error of

law is always an abuse of discretion.       See Spooner v. EEN, Inc.,

644 F.3d 62, 66 (1st Cir. 2011); see also Janney Montgomery Scott

LLC v. Tobin, 571 F.3d 162, 164 (1st Cir. 2009).      But KPJ disputes

whether the judge had any discretion at all.       As KPJ sees it, only

the arbitrator had the power "to determine whether, and in what

amount, to award attorneys' fees and costs," and thus the judge's

award of "additional fees and costs" cannot stand.             As framed,

KPJ's attack is a legal issue that we review anew ("de novo," in

legalese) — with us giving no deference to the district judge's

views.   See Rivera-Rosario v. U.S. Dep't of Argric., 202 F.3d 35,

36-37 (1st Cir. 2000).

          KPJ starts off talking up some nonbinding cases that say

things like:

  •   "Absent   statutory   authorization   or   contractual    agreement

      between the parties, the prevailing American rule is that

      each party in federal litigation pays his own attorneys'

                                - 20 -
      fees."     Menke v. Monchecourt, 17 F.3d 1007, 1009 (7th Cir.

      1994) (emphasis added).     (The significance of "contractual

      agreement" lingo will be clear shortly.)

  •   And "there is nothing in the [FAA] itself that would authorize

      a district court to go beyond confirming an arbitrator['s]

      award and independently award additional attorneys' fees."

      Id.

             The problem for KPJ, however, is that the "contractual

agreement" here says that Toddle's right to recover attorneys'

fees and costs is not limited to arbitration proceedings, but

extends to "any legal action or other proceeding" — including

"appeals" and "post judgment proceedings."13     Menke, unlike here,

did not involve a contract provision supporting an attorneys' fees

      13   To quote the attorneys' fees/cost clause in full:
             If [Toddle] brings any legal action or other
             proceeding for the enforcement of this
             [a]greement, or is forced to defend itself
             because of an alleged dispute, breach, default
             or misrepresentation in connection with any
             provision of this [a]greement, it shall be
             entitled to recover reasonable attorneys'
             fees, court costs and all expenses even if not
             taxable as court costs (including, without
             limitation, all such fees, costs and expenses
             incident to arbitration, appeals, bankruptcy
             and post judgment proceedings), incurred in
             that action or proceeding, in addition to any
             other relief to which [Toddle] may be
             entitled. Attorneys['] fees include paralegal
             fees, administrative costs and all other
             charges billed by the attorney.
                                 - 21 -
and cost award — at least there is nothing to indicate that it

did.

             And the same goes for Schlobohm v. Pepperidge Farm, Inc.,

806 F.2d 578 (5th Cir. 1986), Hannibal Pictures v. Les Films De

L'Elysee, No. CV 12-6434 CAS (JCGx), 2012 WL 6608595 (C.D. Cal.

Dec. 18, 2012), and Harkin v. G.W. Sargent-Builder, Inc., No. CV-

03-233, 2005 WL 2727088 (Me. Super. May 18, 2005) — three other

cases KPJ relies on.         And Crossville Med. Oncology, P.C. v.

Glenwood Sys., LLC (Crossville), 610 F. App'x 464 (6th Cir. 2015)

— another of KPJ's supposedly favorable cases — does not improve

KPJ's prospects for reversal.      The contract there declared "that

the prevailing party [in the arbitration] be awarded costs and

attorneys' fees and the award be entered as a judgment."              Id. at

468    (emphasis   added).      Convinced     that   that    clause     only

"authorize[d] an arbitrator to award attorneys' fees and costs

during arbitration, and authorize[d] the district court to enter

the award as a judgment," Crossville said that the "[a]greement"

there did "not anticipate an award of post-arbitration attorneys'

fees   for   subsequent   proceedings   and   litigation."     Id.     (last

emphasis added). But our contract does "anticipate" that scenario,

because (to repeat what we wrote moments ago, adding our emphasis)

that document says that if Toddle "brings any legal action or other

proceeding" to enforce the contract, "it shall be entitled to

                                 - 22 -
recover reasonable attorneys' fees, court costs and all expenses

even if not taxable as court costs (including, without limitation,

all such fees, costs and expenses incident to arbitration, appeals,

bankruptcy,    and    post   judgment    proceedings),    incurred   in   that

action or proceeding."       And even Crossville suggests that contract

language like "'any action at law . . . necessary to enforce the

terms   of   this    agreement'"   —    which   substantially   mirrors   the

language in play here — indicates "that the parties' contract

anticipated the payment of costs incurred to confirm an arbitration

award."      See id.    at 468-69 (discussing and quoting            Sailfrog

Software, Inc. v. Theonramp Grp., Inc., No. 97-7014, 1998 WL 30100

(N.D. Cal. Jan. 20, 1998)).        So the decisions KPJ plays up are not

game-changers (at least not for KPJ).

             Still searching for a winning argument, KPJ contends

(our emphasis) that because the contract forced the parties to

arbitrate "[a]ll disputes," Toddle's "fee requests must likewise

be submitted to the arbitrator."            KPJ then circles back to the

nonbinding Menke and Harkin decisions.             In both cases, the at-

issue contract said something like "the entire dispute was subject

to arbitration," thus making any award of attorneys' fees and costs

necessarily submitted to arbitration as well.            See Harkin, 2005 WL

2727088, at *2 (emphasis added; discussing Menke).              Also in both

cases, the trial court found the FAA did not allow judges "to add

                                   - 23 -
attorney[s'] fees to the award as part of a judgment confirming an

award," because "do[ing] so would be to modify the award beyond

the limited areas where modification is permitted by" section 11

of the FAA, see id. — which "allows a federal court to correct

'evident'   and   'material'   arithmetic   or   descriptive   errors   in

arbitral awards," see Cytyc Corp. v. DEKA Prods. Ltd. P'ship, 439

F.3d 27, 33 n.3 (1st Cir. 2006) (quoting 9 U.S.C. § 11).            From

there, KPJ notes (quoting the contract) that the arbitration clause

provides that "[t]he arbitrator may also award attorney[s'] fees

as set forth in [the attorneys' fees/costs clause]."            And this

mention, according to KPJ (emphasis ours), "makes clear that an

award pursuant to the [attorneys' fees/costs clause] is to be

submitted to arbitration and is within the arbitrator's sole

authority to decide."

            But there is a flaw in KPJ's analysis.             While the

contract here does let the arbitrator make an award of attorneys'

fees and costs, it does not say only the arbitrator can make such

an award.    Instead (and as we have been at pains to stress — at

the risk of becoming tedious), the contract broadly provides (our

emphasis) that Toddle "shall" recover attorneys' fees and costs in

"any legal action or other proceeding for the enforcement of this

[a]greement," listing as examples proceedings ("appeals," "post

judgment proceedings," etc.) that are clearly judicial in nature

                                 - 24 -
— without intimating even a possible hint of a suggestion that

only the arbitrator can make such an award.   Which distinguishes

the present case from the ones KPJ hypes.

         The end result here is that the judge did not reversibly

err in the way KPJ claims.

                             Final Words

         We affirm the district judge in all respects and award

Toddle its appellate costs under Fed. R. App. P. 39(a)(2).

                               - 25 -