In every jurisdiction in the country, the general rule is that a party to litigation waives arbitration rights by "substantially invok[ing] the judicial process to the detriment or prejudice of the other party." Subway Equip. Leasing Corp. v. Forte, 169 F.3d 324, 328 (5th Cir. 1999).
Despite this general rule, in 2016, the Eleventh Circuit found that a defendant "did not waive the right to arbitrate the state law claims raised in the second amended complaint because those claims were not in the case when it waived by litigation the right to arbitrate the [federal] claim." Collado v. J &
Last month, the Fifth Circuit adopted the same rule. In Forby v.
Later in the case, Forby amended her complaint to add a federal law claim and
On appeal, the Fifth Circuit reversed the district court and adopted the reasoning of the Eleventh Circuit in Collado. The Fifth Circuit held that "[f]or waiver purposes, 'a party only invokes the judicial process to the extent it litigates a specific claim it subsequently seeks to arbitrate.'" Forby, 2021 WL 4167262, at *3 (quoting Subway, 169 F.3d at 328). The Fifth Circuit further found "that waiver of arbitral rights is claim specific...." Thus, a plaintiff wishing to remain in a judicial forum after waiver of arbitration rights by a defendant, had best not amend her complaint to add new claims or causes of action. After Forby, doing so will trigger a new arbitration right for the defendant.
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