The start of a new month – and the near end of summer – is a good time to reinstitute ADR Highlights.  I hope you, again, find it useful.  In that light, today’s cases, even those from the Courts of Appeals, center on practical tips for litigators, rather than nuanced arbitral law.

Litigation Waiver

It is black letter law that, even if a party has the right to resolve a dispute through arbitration, it may waive that right by engaging in extensive litigation.  Both the Fifth Circuit and the Eastern District of Pennsylvania remind counsel who want to arbitrate to say so early, loudly, and often.

Litigating in the Face of “Potential” Arbitrability

Jones v. CVS Health Corp, 2025 U.S. Dist. LEXIS 144551 (E.D. Pa. July 29, 2025)(Younge, J.), arises from a putative class action alleging that defendants “conspired with select drug manufacturers to prevent Medicare beneficiaries from accessing cheaper generic versions of said manufacturers’ drugs.”  The plaintiffs filed the action on April 23, 2024.  Defendants, sometimes in conjunction with plaintiffs, requested various stays of discovery, including one which sought “a stay of discovery pending resolution of Defendants’ motion to dismiss . . . ”  On March 7, 2025, Defendants served Requests for Production and Interrogatories on Plaintiff Jones, requesting her membership ID number and other identifying information.  Defendants maintain that, based on that information, they learned for the first time that Jones enrolled for benefits under an employee program, rather than another program (“SilverScript”) which was addressed in the complaint.  They also became award that Jones signed up for an account on a CVS website through which she agreed to arbitration.  Defendants then filed a motion to compel.[1]  The court addresses whether, since the defendants did not receive definitive knowledge that Jones had signed an arbitration agreement until about a year into the litigation, their motion to compel was timely.

Judge Younge says “No,” and his opinion is a reminder to counsel that arbitration can be waived by litigating even if the moving party is not sure whether arbitration applies. Relying upon the Third Circuit’s opinion in White v. Samsung Electronics America, Inc., 61 F. 4^th 334 (3^rd Cir. 2023), the court holds that a party may waive arbitration if it fails to file a motion to compel when it “knew from the outset that there was a possibility that [plaintiff’s] claims were subject to an arbitration agreement.” (Emphasis added). Elsewhere, the court opines that defendants waived the arbitral alternative when they sought a resolution on the merits “knowing that arbitration was potentially available.” (Emphasis added).   Judge Younge particularly leans into on-going discovery in the case through which defendants could “ascertain the additional information that they needed to be certain that Jones’ claims were arbitrable.” In other words, definitive knowledge of the right to arbitrate a claim is not the triggering event; cautious counsel should move to compel as soon as they have any basis to believe that the claim asserted or the identity of the parties making the claim could invoke an arbitration clause.

Jones, along with White, is an important read to remind counsel of a basic principle – when it comes to arbitration, use it or lose it.  If you think that there is any set of facts under which a claim might be arbitrable and you want to avail yourself of that option, speak up right away.

Litigation of an Unrelated Claim Does Not Waive the Right to Arbitrate

Barnett v. American Express National Bank, 2025 U.S. App. LEXIS 19038 (5^th Cir. July 29, 2025)(Judges Southwick, Oldham and Ramirez, per curiam), addresses when litigation in one court might waive the right to arbitrate in a separate case.

Amex sued the Plaintiff, Michelle Barnett, in state court for her alleged failure to pay credit charges.  That case was dismissed.  Barnett then brought this action alleging violation of the Fair Credit Reporting Act.  Amex moved to compel arbitration pursuant to the terms of its credit card agreement; Barnett countered that, by suing her in state court, Defendant waived any arbitral rights.  The District Court denied Amex’s motion; the Court of Appeals here reverses and remands.  Quoting Forby v. One Technologies, LP, 13 F. 4^th 460, 465 (5^th Cir. 2021), the Court opines that “[f]or waiver purposes, a party only invokes the judicial process to the extent that it litigates a specific claim that it subsequently seeks to arbitrate.” (Emphasis in quoted opinion).  American Express’s state court suit for “a generic breach of contract claim” is not the same as the claims made in this FCRA action.  Waiver does not occur even when “both claims arise from the same facts. . . . Just because the two claims involved the same factual predicate – Barnetts’ debt – does not mean they are the same.”  In short, at least in the Fifth Circuit, there is no waiver unless the identical claim is asserted in both pieces of litigation.  Otherwise, sue away.

Timeliness of a Motion to Vacate under the FAA

Two cases on Tuesday are reminders to counsel of the importance of serving a motion to vacate within three months of the date of the arbitrator’s award, 9 U.S.C. § 12.

In Valentini v. StoneX Financial, Inc., 2025 U.S. Dist. LEXIS 144736 (S.D. Tex. July 29, 2025)(Hanks, J.), the arbitrators issued their award on April 22, 2024.  Plaintiffs, perhaps acting pro se, acted quickly by filing a petition to vacate on April 29, 2024 – a week after the decision.   However, they did not serve StoneX or its counsel until August 2, 2024 – over 102 days after the award. Therefore, the District Court denies the motion to vacate as being untimely.  Further, the court rejects the Valentinis’ attempt to end run the time limits by filing a declaratory judgment action seeking a declaration that the award should be vacated; “’Section 10 of the FAA provides the exclusive statutory grounds’ for vacatur of an arbitration award.” (Citation omitted; emphasis in opinion). Note – the court points out in a footnote that “[t]he Valentinis agree that the FAA controls.”  What if there were no such concession?  Could the parties, then, look to the time limits under any applicable state arbitration statute to determine the applicable vacatur period?

In Sheet Workers, Local 25 v. Jansons Associates, Inc., 2025 U.S. App. LEXIS 18942 (3^rd Cir. July 29. 2025)(Krause, J. for herself and Judges Matey and Phipps), treats the Plaintiff’s request to review a grievance award as a motion to vacate that award under the FAA, rather than as a separate action under Section 301 of the Fair Labor Management Relations Act.  Accordingly, the plaintiff had to serve the petition to vacate pursuant to FAA Section 12, and his motion – filed about nine months after the issuance of the award – was not timely.  While it is not the court’s focus, the case also highlights that responding to a petition to confirm an award with a request to vacate will not protect any challenge to the award, unless the vacatur request itself complies with the timing of FAA Section 12.

Since I’ve been away a while, let me restate a basic principle underlying ADR Highlights. I am a working arbitrator.  My goal in this blog is to highlight recent cases and lay out any practice tips that they might show.  I am not expressing an opinion as to whether the decision is right or wrong. My job as a neutral in cases before me is to decide them based on what counsel provides, so please don’t read anything into these summaries on where I might come out in a given case.

Have a good weekend.  It’s going to cool down here in the Northeast.

David Reif, FCIArb

Reif ADR

Dreif@reifadr.com

[1] The LEXIS print of the opinion states that the motion to compel arbitration was filed on “June 24, 2024,” but, in context, this seems to be a typo.