Blawgletter wrote in April about a Fifth Circuit decision that, to our surprise, made a big deal about its — the court's – greater openness to the same argument by one side (the defense side) than by the other side. The issue concerned whether a party waived a right to arbitrate a dispute.
The panel in the April case found that the plaintiff, by asking for a ruling on a legal issue before demanding arbitration, (a) did a "substantial invocation of the judicial process" and ergo (b) committed a waiver thingy. Their Honors asked their readers to accept 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."
We didn't believe it, in part because we thought it glossed over the fact that the court saw "prejudice" to defendants often but to plaintiffs seldom. We fussed:
[B]y making the prejudice question pivot on whether the arbitration-opposing party would lose a "legal" right or advantage by having to go to arbitration, the analysis again tends to favor defendants. Courts seem to view plaintiffs' rights as boiling down to the right to ultimate affirmative relief, but they also think that defendants would "lose" rights simply by virtue of foregoing the benefit of a court's pre-trial rulings that went their way. Because plaintiffs still may have a shot at winning in arbitration, their losses (from having to arbitrate after defendants engaged in merely tactical invocation of the judicial process) appear to weigh less. But they don't.
But last week the court held that a defendant waived its right to arbitrate by waiting to demand arbitration until after the trial judge pretty much said he would rule against the defendant on the merits. Wowser. Petroleum Pipe Americas Corp. v. Jindal Saw Ltd., No. 08-20461 (5th Cir. July 9, 2009).
Let's not dwell on the differences. Things like the entirely different panels; the panel's failure to mention the two-months earlier decision; the procedural issue that the previous decision turned on versus the merits question that decided the new one. We like progress in any form it takes.
