In consumer class action against Walmart, Eighth Circuit holds that right to enforce arbitration agreement was waived by Walmart’s litigation conduct

Here's how the Eighth Circuit, in its brand-new decision, McCoy v. Walmart, described the merits of the consumer class action before it: "Debbie McCoy purchased Walmart gift cards as Christmas presents. The cards turned out to be worthless, however, because one had been deactivated and the other had no balance remaining. McCoy, seeking to represent a nationwide class of disgruntled gift-card purchasers, sued Walmart."

After many months of defending the case on its merits, Walmart then invoked an arbitration agreement, saying that, under the Federal Arbitration Act, the case didn't belong in court at all. The question was whether by “substantially invok[ing] the litigation machinery rather than promptly seeking arbitration," Walmart had waived any right it had to arbitrate. The answer, according to the Eighth Circuit, was "yes."

Our readership may find the opinion worth reading, as it contains a compact discussion of the considerations for determining waiver by litigation conduct. Note also that the Eighth Circuit's opinion cements that court's earlier rulings that the waiver question should be decided by the court not an arbitrator.

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