As we have said in the past, determining when a party waives its right to arbitrate is never easy and the nuanced standards vary among the circuits. Now a case that has come to the U.S. Court of Appeals for the Fifth Circuit a second time confirms our belief. The Fifth Circuit opinion in Forby v. One Technologies, L.P. (No. 20-10088, decided Sept. 14, 2021) (Forby II), arises from a class action asserting that One Technologies, L.P. (One Tech), deceived customers into signing up for purportedly “free” credit reports that weren’t. In the first Forby decision, reported at 909 F. 3d 780, 784 (5th Cir. 2018) (Forby I), the appellate court ruled that One Tech waived its ability to arbitrate plaintiffs’ state law claims when it filed a motion to dismiss rather than seeking arbitration. See our Dec. 4, 2018 blog article on the Forby I decision.
The Forby I panel declared, “One Tech was fully aware of its right to compel arbitration when it filed its 12(b)(6) motion to dismiss, it pursued and partially obtained a dismissal with prejudice, showing a desire to resolve the dispute in litigation rather than arbitration.”