Debbie McCoy v. Walmart, Inc., 13 F.4th 702

Debbie McCoy bought Walmart gift cards as Christmas presents that were worthless; she sued Walmart entities in Missouri state court seeking to represent a nationwide class.
Walmart removed the case to federal court and, over ~15 months, filed two motions to dismiss (seeking dismissal of all counts and later dismissal on multiple grounds), answered, participated in discovery, filed initial disclosures, submitted a joint scheduling order, and had a trial date set—without asserting arbitration.
After McCoy served interrogatories and document requests, Walmart moved to amend its answer to add arbitration as an affirmative defense and moved to compel arbitration.
The district court allowed the amendment but denied the motion to compel, finding Walmart had waived its arbitration right by substantially invoking the litigation machinery.
The court cited McCoy’s incurred litigation costs and delay (over $170,000 in fees) and the likely duplication of efforts if the case were sent to arbitration; the Eighth Circuit affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Walmart waived its right to arbitrate by litigating in court	Walmart waited 15 months and actively litigated, so it waived arbitration	Walmart can assert arbitration later and should be sent to arbitration now	Waiver: yes. Walmart substantially invoked litigation (motions to dismiss, discovery, scheduling), so arbitration was waived
Whether McCoy was prejudiced by the delay	Delay forced McCoy to litigate merits, incur significant fees, and caused duplicative work	No meaningful prejudice; arbitration remains appropriate	Prejudice: yes. McCoy incurred substantial delay and expense and duplication of efforts would result
Who decides waiver and standard	Court should decide waiver when conduct occurs in court	Defendant might prefer arbitrator decide	Judge decides waiver; review de novo for legal conclusions and clear-error for factual findings; doubts favor arbitration but not here

Lewallen v. Green Tree Servicing, L.L.C., 487 F.3d 1085 (8th Cir. 2007) (articulates waiver test for arbitration by substantial invocation of litigation machinery)
Ritzel Commc’ns, Inc. v. Mid-Am. Cellular Tel. Co., 989 F.2d 966 (8th Cir. 1993) (three-part waiver test: knowledge, inconsistent acts, prejudice)
Dumont v. Saskatchewan Gov’t Ins., 258 F.3d 880 (8th Cir. 2001) (doubts about waiver resolved in favor of arbitration)
Hooper v. Advance Am., Cash Advance Ctrs. of Mo., Inc., 589 F.3d 917 (8th Cir. 2009) (single attempt to seek total victory can waive arbitration)
Kelly v. Golden, 352 F.3d 344 (8th Cir. 2003) (raising arbitration only after adverse court rulings can show waiver)
Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394 (1981) (dismissal for failure to state a claim is a judgment on the merits)
AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (noting efficiencies of arbitration and preemption of certain state-law rules that impede arbitration)