Eleventh Circuit Rules that the Plaintiff’s Act of Amending its Complaint May Allow a Defendant to Resurrect its Previously-Waived Right to Arbitrate

In Krinsk v. Suntrust Banks, Inc., No. 10-11912 (11th Cir. Sept. 7, 2011) the defendant had participated in the case for nine months without enforcing its right to arbitrate the class action claims.

In response to the court’s ruling on the motion to dismiss, the plaintiff amended the complaint and expanded the definition of the putative class from one that covered hundreds of members to one that potentially covered tens of thousands of members. It was at that point that the defendant moved to compel arbitration pursuant to an arbitration agreement governed by the Federal Arbitration Act. The district courtdenied the motion, concluding that the defendant had waived its contractual right to arbitrate by participating in the litigation. The defendant now appeals.

The Eleventh Circuit concluded that when an amended complaint “unexpectedly changes the scope or theory of the plaintiff’s claims,” the defendant may revive its right to compel arbitration. The court stated that “[I]n limited circumstances, fairness dictates that a waiver of arbitration be nullified by the filing of an amended complaint.”

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