Healy v. Cox Communications, Inc.
790 F.3d 1112
10th Cir.2015Background
- Cox Enterprises fights a class-action antitrust suit related to its cable service and set-top boxes.
- Cox moved to compel arbitration shortly before trial after extensive discovery and class-certification activity.
- The district court held Cox waived its right to arbitrate due to its litigation conduct.
- Cox failed to disclose arbitration agreements during Rule 23 analysis, delaying the issue.
- The court found Cox’s simultaneous summary-judgment and arbitration motions and other conduct inconsistent with arbitration.
- On appeal, the Tenth Circuit affirmed the waiver finding and declined to compel arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver under Peterson six-factor test | Healy argues Cox waived by delaying and manipulating litigation. | Cox contends waiver did not apply, or that its arbitration rights could be asserted later. | Waiver established under six-factor test. |
| Prejudice and manipulation of the judicial process | Cox’s omissions caused prejudice by altering numerosity and class certification. | Cox argues no prejudice from timing, only procedural. | Prejudice found; conduct inconsistent with arbitration. |
| Arbitration against absent class members before certification | Absent members could have arbitration defenses raised earlier. | Arbitration against unnamed absentees was not yet decisionally appropriate before certification. | Waiver affirmed; not necessary to decide against absent-member arbitration. |
Key Cases Cited
- Peterson v. Shearson/Am. Express, Inc., 849 F.2d 464 (10th Cir. 1988) (six-factor test for waiver of arbitration rights)
- Hill v. Ricoh Ams. Corp., 603 F.3d 766 (10th Cir. 2010) (arb. waiver factors not mechanical; focus on fairness and conduct)
- Reid Burton Constr., Inc. v. Carpenters Dist. Council of S. Colo., 614 F.2d 698 (10th Cir. 1980) (waiver can arise from inconsistent conduct and delaying tactics)
- Metz v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 39 F.3d 1482 (10th Cir. 1994) (waiver when defense delayed arbitration for months)
- MidAmerica Fed. Sav. & Loan Ass’n v. Shearson/Am. Express, Inc., 886 F.2d 1249 (10th Cir. 1989) (support for timing and prejudice considerations in waiver)
- Khan v. Parsons Global Servs., Ltd., 521 F.3d 421 (D.C. Cir. 2008) (recognizes that delaying arbitration can support waiver)