Proof of Prejudice and the Delayed Arbitration Demand

February 8, 2022

During the week of March 21, 2022, the United States Supreme Court is scheduled to hear arguments in two cases that will affect arbitration. As previously reported, during that week, the Supreme Court will address the split between the Circuits regarding the breadth of 9 U.S.C §1782.

The additional Circuit split to be addressed is whether a party is required to prove prejudice when opposing arbitration based on the other party’s delay in demanding arbitration.

As detailed in the Petition for Writ of Certiorari filed in Robyn Morgan v. Sundance, Inc., No. 21- 328, the courts are divided on this issue. Most courts require a finding of prejudice. Central to the Petitioner’s position is that waiver in the contractual context does not require proof of prejudice. Consequently, requiring proof of prejudice in the context of opposing an delayed arbitration demand violates the Supreme Court’s directive in AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) that lower courts must “place arbitration agreements on an equal footing with other contracts”

The petition has attracted five amici curiae all in favor of the Petitioner.  The Brief of Amicus Curiae American Association for Justice in Support of Petitioner details the lengthy delays in demanding arbitration that have occurred in various Circuits and urges the Supreme Court to adopt the rule of the D.C. Circuit that a party forfeits the right to arbitration when its fails to exercise that right at the earliest available opportunity.

The Supreme Court will hear oral argument on March 21, 2022.