Joe Solo v. United Parcel Service Co., 947 F.3d 968

Solo and BleachTech paid for "declared value" insurance on UPS shipments sent before December 30, 2013 and allege UPS unlawfully charged $0.85 per $100 including the first $100 despite language they read as exempting the first $100.
The controlling contract at the time of the shipments (Original UPS Terms) did not include an arbitration clause; UPS later adopted Amended UPS Terms (effective Dec. 30, 2013) that impose mandatory individual arbitration "regardless of the date of accrual."
The district court originally granted UPS’s motion to dismiss on its contractual interpretation; this Court reversed, holding the contract was at least ambiguous and remanded.
On remand UPS answered invoking arbitration as an affirmative defense, sought discovery, and then—after six months of full discovery and more than two years of litigation and an appeal—moved to compel arbitration under the Amended UPS Terms.
The district court denied the motion, concluding (1) the Amended Terms do not apply to shipments made before they took effect because the Terms state that the version in effect at the time of shipping controls, and (2) UPS waived its arbitration right by litigating the merits and delaying invocation to plaintiffs’ prejudice. The Sixth Circuit affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Amended UPS Terms’ arbitration clause applies to disputes based on shipments made before the Amended Terms took effect	Solo: the arbitration clause applies "regardless of the date of accrual," so it reaches pre-effective disputes	UPS: the Amended clause is broadly worded and applies to disputes "regardless of the date of accrual" including pre-effective claims	Held: No — the Terms expressly state the version in effect at the time of shipping governs shipments; that language shows no intent to apply arbitration retroactively.
Whether UPS waived the right to arbitrate by litigating in court first	Solo: UPS litigated the merits, appealed, and delayed; those actions are inconsistent with preserving arbitration	UPS: it reserved the right to compel arbitration in its initial motion to dismiss and lacked sufficient info initially to determine arbitrability	Held: UPS waived arbitration — it acted inconsistently by seeking merits dismissal, litigated for years, then sought arbitration after an unfavorable appeal; reservation language was insufficient.
Whether plaintiffs suffered prejudice from UPS’s delay	Solo: yes — extensive litigation, appeal, and discovery caused actual prejudice	UPS: the delay and litigation were justified; it only sought arbitration when facts warranted	Held: Yes — more than two years of litigation, extensive discovery, and appellate briefing constituted actual prejudice supporting waiver.

Hergenreder v. Bickford Senior Living Grp., LLC, 656 F.3d 411 (6th Cir. 2011) (federal policy favors arbitration; standards for enforcing arbitration agreements)
Watson Wyatt & Co. v. SBC Holdings, Inc., 513 F.3d 646 (6th Cir. 2008) (broad arbitration language can reach disputes predating the clause)
Russell v. Citigroup, Inc., 748 F.3d 677 (6th Cir. 2014) (present/future-tense arbitration language suggests intent to cover future disputes only)
Sec. Watch, Inc. v. Sentinel Sys., 176 F.3d 369 (6th Cir. 1999) (later-contract arbitration clauses require clear evidence to apply to prior contracts)
Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468 (1989) (parties must have agreed to arbitrate; FAA does not create agreement)
Hurley v. Deutsche Bank Tr. Co. Ams., 610 F.3d 334 (6th Cir. 2010) (waiver test: actions inconsistent with arbitration plus actual prejudice)
Johnson Assocs. Corp. v. HL Operating Corp., 680 F.3d 713 (6th Cir. 2012) (raising arbitration in the answer is an approved means to preserve the right)
Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213 (1985) (FAA promotes efficient and speedy arbitration; supports interlocutory appeal of denial to compel arbitration)