Key Takeaways
Recent decisions reaffirm courts’ willingness to reject arguments that a defendant waived arbitration rights by participating in litigation. Defendants may also pursue sanctions against parties who attempt to circumvent valid arbitration agreements through misrepresentation.
Federal courts continue to provide support for motions to compel arbitration in a variety of contexts and reject waiver arguments based on a defendant’s participation in litigation. For example, in Valli v. Avis Budget Group, Inc., the Third Circuit held that a car rental company did not waive its right to arbitrate claims involving a traffic fine policy when it moved to compel after a decade of litigation and following class certification. 162 F.4th 396, 410–13 (3d Cir. 2025). The defendant’s pre-certification conduct “did not evince a preference for litigation over arbitration” because the defendant raised arbitration as an affirmative defense and “asserted its prospective arbitration rights in opposing certification.” Id. at 401, 412. The court cautioned that when arbitration enforceability “hinges on the occurrence of a foreseeable procedural event” like class certification, a party must provide “record notice of its intent” to arbitrate and promptly move to compel arbitration once the event occurs. Id. at 410.
Similarly, in Agyenim-Boateng v. T-Mobile Northeast LLC, the court held that informal settlement negotiations did not waive arbitration rights because such participation “did not amount to acting inconsistently with [the] right to arbitrate.” 2025 WL 3277336, at *4 (E.D.N.C. Oct. 10, 2025).
A recent Central District of California decision similarly rejected waiver arguments while offering a cautionary tale for plaintiffs who fail to disclose material facts. See Golikov v. Walmart Inc., 2025 WL 1766345, at *3 (C.D. Cal. June 10, 2025). The plaintiff in Golikov brought a class action alleging a retailer misrepresented its avocado oil as pure. Id. at *1. After class certification, discovery revealed the plaintiff had first purchased the product online rather than in-store as alleged, requiring arbitration under the retailer’s online Terms of Use. Id. at *3. This led the court to compel arbitration, id., decertify the class, 2025 WL 2884728 (C.D. Cal. Aug. 12, 2025), and impose sanctions of $620,000 in attorneys’ fees against plaintiff’s counsel for “fail[ure] to verify a material fact.” 2025 WL 3190642, at *2 (C.D. Cal. Nov. 6, 2025); 2025 WL 3760635 (C.D. Cal. Dec. 19, 2025).
