VICKIE FORBY, individually and on behalf of all others similarly situated in Illinois, Plaintiff - Appellant
ONE TECHNOLOGIES, L.P., ONE TECHNOLOGIES MANAGEMENT, L.L.C.; ONE TECHNOLOGIES CAPITAL, L.L.P., Defendants - Appellees
from the United States District Court for the Northern
District of Texas
GRAVES and COSTA, Circuit Judges, and BENNETT, District
H. BENNETT, DISTRICT JUDGE
Vicky Forby ("Forby") appeals the district
court's grant of Defendant-Appellee One Technologies,
L.P.'s ("One Tech") motion to compel
arbitration. Forby contends that the district court erred in
finding she was not prejudiced by One Tech's substantial
invocation of the judicial process. For the reasons set forth
below, we conclude that the district court erred when it
found One Tech had not waived its right to arbitration
because Forby had not demonstrated that she was prejudiced.
Accordingly, we reverse the district court's judgment.
April 24, 2015, Forby filed a class action in Illinois state
court that was later removed to the United States District
Court for the Southern District of Illinois on July 14, 2015.
Forby brought claims against One Tech for violation of the
Illinois Consumer Fraud and Deceptive Business Practices Act
("ICFA") and unjust enrichment under Illinois law.
In the notice of removal, One Tech did not reference
arbitration but rather argued that Forby's claims were
baseless, and that no class should be certified. On July 21,
2015, One Tech filed a motion to dismiss for failure to state
a claim and, in the alternative, moved to transfer the case
for forum non conveniens, arguing that Forby's claims
were subject to arbitration in Texas and that an Illinois
district court could not compel arbitration outside of the
confines of its district. On September 4, 2015, One Tech
filed an opposed motion to stay discovery until the Illinois
district court ruled on the motion to dismiss. On March 25,
2016, the Illinois district court issued a Memorandum and
Order transferring the case to the Northern District of
the case was transferred, One Tech retained new counsel, who
filed an unopposed extension of time to answer the complaint
to "investigate [Forby's] claims and prepare an
appropriate response." On May 9, 2016, One Tech filed a
12(b)(6) motion to dismiss, asking the Texas district court
to dismiss all of Forby's claims with prejudice. The
motion to dismiss did not mention arbitration. Forby filed
her response to One Tech's motion to dismiss. In its
reply to Forby's response, One Tech once again did not
mention compelling arbitration. On March 31, 2017, the
district court denied the motion to dismiss with respect to
Forby's ICFA claim concerning the deceptiveness of One
Tech's website and granted the motion as to the unjust
enrichment claim-dismissing that claim with prejudice.
April 17, 2017, four days after attending a Rule 26(f)
conference and receiving Forby's requests for production,
One Tech finally filed its motion to compel arbitration.
Additionally, that same day, One Tech filed an expedited
motion to stay all discovery pending the resolution of the
motion to compel. On April 24, 2017, the district court
conducted a hearing and granted the motion to stay.
7, 2017, the district court issued an order granting One
Tech's motion to compel arbitration and dismissed the
case with prejudice. The district court found that One Tech
had substantially invoked the judicial process but that Forby
had not suffered prejudice. Specifically, the district court
stated that Forby had "suffered some prejudice" but
not to "the extent required by existing precedent in the
Fifth Circuit," concluding that "the only prejudice
that Forby has adequately demonstrated is delay, and delay
alone is insufficient . . . ." Forby now appeals the
decision of the district court.
review the district court's determination of a motion to
compel arbitration de novo, but review any factual findings
underlying that determination for clear error. Janvey v.
Alguire, 847 F.3d 231, 240 (5th Cir. 2017).
waiver of arbitration is a disfavored finding," the
right to arbitrate-like all contract rights-is subject to
waiver. Nicholas v. KBR, Inc., 565 F.3d 904, 907
(5th Cir. 2009). "[A] party waives its right to
arbitrate if it (1) 'substantially invokes the judicial
process' and (2) thereby causes 'detriment or
prejudice' to the other party." Al Rushaid v.
Nat'l Oilwell Varco, Inc., 757 F.3d 416, 421 (5th