The Eleventh Circuit has ruled that the plaintiff’s act of amending its complaint may allow a defendant to resurrect its previously-waived right to arbitrate.  “[I]n limited circumstances, fairness dictates that a waiver of arbitration be nullified by the filing of an amended complaint.”  Krinsk v. Suntrust Banks, Inc., __ F.3d ___, 2011 WL 3902998, at *5 (11th Cir. Sept. 7, 2011). 

In Krinsk, the defendant had participated in the court case for nine months without enforcing its right to arbitrate the putative class action claims.  The defendant’s actions included: filing a Rule 12 motion to dismiss without mentioning arbitration; expressly opposing arbitration of the claims in a case management report; agreeing to a discovery plan; and opposing class certification without ever asserting its intent to arbitrate.  

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.  At that point, the defendant “raised its right to arbitration for the first time since the litigation began,” and moved to compel arbitration.  The district court denied the defendant’s motion to compel arbitration, concluding it had waived that right. 

The Eleventh Circuit vacated the district court’s decision.  Despite having little authority in the arbitration realm to cite in support of its decision, the circuit court 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 supported its decision by referring repeatedly to “fairness” considerations and to the strong federal policy in favor of enforcing arbitration agreements. 

This may prove to be an important decision for parties who, intentionally or inadvertently, waived their right to arbitrate and want to resurrect it at a later point.  If there is an argument that a pleading has unexpectedly changed the scope or theory of the case, this case may provide authority for a belated assertion of the right to arbitrate.