Tiffany Hill v. Xerox Business Services, LLC ( 2023 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
TIFFANY HILL, individually and on No. 20-35838
behalf of all others similarly situated,
D.C. No. 2:12-cv-
Plaintiff-Appellee, 00717-JCC
v.
OPINION
XEROX BUSINESS SERVICES,
LLC; LIVEBRIDGE INC, an Oregon
Corporation; AFFILIATED
COMPUTER SERVICES INC, a
Delaware Corporation; AFFILIATED
COMPUTER SERVICES LLC, a
Delaware Limited Liability Company,
Defendants-Appellants.
Appeal from the United States District Court
for the Western District of Washington
John C. Coughenour, District Judge, Presiding
Argued and Submitted August 12, 2021
Seattle, Washington
Filed February 3, 2023
2 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
Before: Carlos T. Bea, Daniel A. Bress, and Lawrence
VanDyke, Circuit Judges.
Opinion by Judge Bea;
Dissent by Judge VanDyke
SUMMARY *
Arbitration
The panel affirmed the district court’s order denying
Xerox Business Services, LLC (“XBS”)’s motion to compel
arbitration pursuant to a 2002 Dispute Resolution Plan
(“2002 DRP”), arising from a putative class action brought
by XBS call center agents alleging Washington state law
employment compensation claims based on diversity
jurisdiction.
Appellee Tiffany Hill worked at an XBS call center and
was compensated according to a proprietary system of
differential pay rates known as Achievement Based
Compensation (“ABC”). Section 4 of the 2002 DRP
required XBS and its agents to submit “all disputes” to
binding arbitration for final and exclusive resolution. Hill
never signed the 2002 DRP. XBS issued an updated DRP
(“2012 DRP”). Following a long course of litigation, XBS
filed a motion to compel individual arbitration by 2,927 class
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 3
members who had signed the 2002 DRP. The district court
found that XBS had waived its right to compel arbitration.
The panel noted that following Morgan v. Sundance, 142
S. Ct. 1708 (2022), this Circuit’s test for waiver of the right
to compel arbitration consists of two elements: (1)
knowledge of an existing right to compel arbitration; and (2)
intentional acts inconsistent with that existing right. XBS
challenged both prongs of the test.
XBS argued that until after class certification had been
granted, and completion of the notice and opt-out period,
there was no existing right to compel arbitration. XBS
maintained that it lacked knowledge of an existing right to
compel arbitration, and therefore it could not be charged
with waiver of a non-existent right. The panel held that XBS
was correct that the district court could not compel
nonparties to the case to arbitrate until after a class had been
certified and the notice and opt-out period were
complete. However, XBS failed to appreciate that waiver
was a unilateral concept. A finding of waiver by XBS
looked only to the acts of XBS, and bound only
XBS. Explicit relinquishment is not the only way to waive
a right to arbitrate. The panel held that further undercutting
XBS’s position was its own actions throughout the course of
the litigation, in which XBS raised the 2012 DRP as to
putative class members before the class had been certified
and before it had the ability to move to enforce that
agreement against them. The panel concluded that it was
clear that XBS had knowledge of and knew how to assert its
right to compel arbitration under the 2012 DRP well before
class certification and notice was complete. XBS similarly
possessed knowledge of the right to compel arbitration as
against the signatories of the 2002 DRP sufficient to satisfy
the first prong of the waiver test.
4 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
Concerning the second prong of the test for arbitration
waiver – acts inconsistent with the right to arbitrate – the
panel considered the totality of the parties’ actions. The
panel held that here, there was little doubt that XBS acted
inconsistently with its right to compel arbitration under the
2002 DRP. First, XBS many times explicitly asserted as a
ground for obligatory arbitration the 2012 DRP without
asserting the same for the 2002 DRP. Second, XBS further
sought to take advantage of litigation in federal court by
requesting extensive discovery on unnamed parties to the
case—discovery which necessarily included signatories to
the 2002 DRP. That Hill may not have been directly
prejudiced by XBS’s requests concerning 2002 DRP
signatories was immaterial after Morgan. XBS’s discovery
behavior further substantiates the inferences drawn from the
record suggesting that XBS was more interested in resolving
this litigation, which included the 2002 DRP signatories’
claims, in court rather than in arbitration. Third, XBS
actively litigated this case through filing a motion for partial
summary judgment on the issue whether unnamed class
members subject to XBS’s ABC pay scheme were
“piecemeal” workers under Washington’s Minimum Wage
Act. The panel rejected XBS’s argument that the language
in the class notice itself demonstrated that it had not acted
inconsistently with respect to the 2002
signatories. Considering the totality of the circumstances,
the panel concluded that the district court properly found that
XBS acted inconsistently with its right to compel arbitration
under the 2002 DRP.
Finally, the panel rejected XBS’s contentions that it
would have been futile for it to have filed a motion to compel
arbitration sooner than it did, and that, accordingly, its
otherwise clear waiver of the right to compel arbitration
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 5
should be excused. First, XBS argued that it would have
been futile to file a motion to compel arbitration until after
class certification because only then would unnamed class
members be brought into the case, and only then would the
district court have jurisdiction over those individuals. The
panel held that waiver did not require a court to have
jurisdiction over the beneficiaries of the waiver, it did not
even require a lawsuit to have been filed. Second, XBS
argued that it would have been futile to compel arbitration
under the 2002 DRP before the Supreme Court decided
Lamps Plus v. Varela, 139 S. Ct. 1407 (2019), because
before Lamps Plus, it would not have been guaranteed
individual arbitration under the 2002 DRP. The panel held
that regardless whether arbitration were to be conducted
individually or as a class, XBS would have had a valid right
to compel arbitration under the 2002 DRP. In addition, XBS
could not rely on Lamps Plus as establishing any new law
with respect to arbitration agreements that are silent
regarding class arbitration because that issue was decided
nearly a decade earlier by Stolt-Nielsen S.A. v. AnimalFeeds
Int’l Corp., 559 U.S. 662 (2010). The panel concluded that
it would not have been futile for XBS to assert the 2002 DRP
throughout the course of the litigation below in the same
manner as it did the 2012 DRP.
Judge VanDyke dissented. He wrote that under this
court’s precedents, a defendant may waive a right to compel
arbitration only by intentionally relinquishing it. That
intention can be express or implied, but this court has refused
to find implied waiver unless a defendant completes concrete
acts inconsistent with the right to arbitrate. Here, XBS never
took a single act inconsistent with its intent to arbitrate the
claims of its call-center employees who had signed
arbitration agreements, and this fact alone should end the
6 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
analysis in this case. In addition, XBS advised named
plaintiff Hill and the district court of its intent to compel
arbitration against those employees should the putative class
be defined to include them. During the extended litigation
against Hill, XBS took no action that uniquely targeted class
members and not Hill. Finally, XBS moved to compel
arbitration against every class member with whom it had an
arbitration agreement on literally the first day after it could
do so.
Judge VanDyke wrote further that the majority avoids
the outcome these facts require by transforming this court’s
clear waiver rule into an opaque forfeiture rule. This break
from precedent is premised on the majority’s
misunderstanding of how much it may rely on its own
preferences and instincts instead of on concrete acts to find
waiver. None of the three purported “acts” of XBS the
majority points to supports a conclusion of waiver because
each “act” intentionally related to Hill, with whom XBS had
no right to arbitrate. Further, the majority’s new forfeiture
rule fails even on its own terms. XBS did nothing in this
case to evince that it affirmatively intended to waive its right
to arbitrate—it merely litigated against the named plaintiff
Hill and opposed her attempts to certify a class. That should
not be enough to intentionally waive a merits defense wholly
inapplicable to the named plaintiff.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 7
COUNSEL
Todd L. Nunn (argued), Daniel P. Hurley, Ryan D.
Redekopp, and Patrick M. Madden, K&L Gates LLP,
Seattle, Washington, for Defendants-Appellants.
Daniel F. Johnson (argued), Breskin Johnson & Townsend
PLLC, Seattle, Washington; Toby J. Marshall, Terrell
Marshall Law Group PLLC, Seattle, Washington; for
Plaintiff-Appellee.
OPINION
BEA, Circuit Judge:
We are called on to decide whether the district court
correctly determined that the actions of Appellant Xerox
Business Services, LLC constituted a waiver of its right to
compel arbitration as against unnamed parties to the class
action below. The Supreme Court’s recent decision in
Morgan v. Sundance, 142 S. Ct. 1708 (2022), has removed
prejudice to the non-moving party as an element of waiver
in the context of arbitration contracts. Accordingly, we take
occasion to restate this Circuit’s rule of waiver of the right
to arbitrate, which is nothing more than the general rule of
waiver of a contractual right: a party waives its right to
compel arbitration when (1) it has knowledge of the right,
and (2) it acts inconsistently with that right. Moreover, the
body of caselaw in this Circuit applying these two elements
remains good law following Morgan, which by its own terms
decided only “a single issue” and held that federal courts
cannot “condition a waiver of the right to arbitrate on a
8 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
showing of prejudice.” Morgan, 142 S. Ct. at 1712–13.
Thus, relying on established Ninth Circuit precedent, we
affirm the district court’s order which denied Appellant’s
motion to compel arbitration.
I. BACKGROUND
Appellant Xerox Business Services, LLC (“XBS”)
operated call centers in Washington State and elsewhere that
responded to customer calls on behalf of third-party clients
such as phone companies, airlines, and hotels. 1 XBS
compensated its call center agents according to a proprietary
system of differential pay rates known as Achievement
Based Compensation (“ABC”). Under the ABC plan, XBS
agents received different rates of pay for each task
performed. “Productive” tasks (e.g., handling incoming
calls for clients) were compensated at a variable per minute
rate that trended higher or lower based on customer
satisfaction and efficiency metrics. “Non-productive” tasks
(e.g., waiting for calls) were not independently
compensated. “Additional Pay” compensated employees at
minimum wage for mandatory activities such as trainings
and meetings. XBS totaled “productive” and “non-
productive” minutes at the end of the week to determine an
employee’s “ABC Pay” and offered “Subsidy Pay” when
necessary to ensure an employee’s overall hourly pay rate
met or exceeded Washington’s minimum wage. 2
1
Defendant Affiliated Computer Services, Inc. (“ACS”) became
defendant Affiliated Computer Services, LLC, which became XBS.
Defendant LiveBridge, Inc. was a wholly owned subsidiary of XBS.
Collectively, we refer to all defendants as “XBS.”
2
To illustrate: In 2012, Washington’s minimum wage was $9.04 per
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 9
Beginning in 2002, most, but not all, XBS call center
agents signed the company’s Dispute Resolution Plan
(“2002 DRP”). Section 4 of the 2002 DRP required XBS
and its agents to submit “All Disputes” to binding arbitration
for final and exclusive resolution. 3 “Disputes” included “all
legal and equitable claims, demands, and controversies, of
whatever nature or kind, whether in contract, tort, under
statute or regulation, or some other law.”
A. Initiation of the Suit
Appellee Tiffany Hill worked at an XBS call center
under an ABC compensation plan from September 2011
until April 2012. All agree that Hill never signed the 2002
DRP and never agreed to submit disputes with XBS to
arbitration or to waive her right to bring claims against XBS
in court.
On April 24, 2012, Hill brought Washington state law
employment compensation claims against XBS based on
diversity jurisdiction in the U.S. District Court for the
Western District of Washington on behalf of herself and a
putative class of current and former call center agents
hour. Under the ABC plan for that year, agents earned $9.04 per hour in
“Additional Pay” for trainings, meetings, and breaks and $0.15 to $0.25
per minute in “ABC Pay” (“productive” work less “non-productive”
work). That means an agent who attended one half-hour meeting ($9.04
per hour), took a half-hour lunch ($9.04 per hour), managed calls at an
average quality for six hours ($0.20 per minute / $12.00 per hour), and
was non-productive for one hour ($0.00 per hour) would earn an average
wage of $10.13 per hour and receive no “Subsidy Pay.”
3
Section 4 of the 2002 DRP provides:
All Disputes not otherwise settled by the Parties shall
be finally and conclusively resolved under this Plan
and the Rules, by binding arbitration.
10 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
compensated under the ABC plan. Hill made minor changes
in a first amended complaint filed several weeks later. On
June 1, 2012, in its answer to the first amended complaint,
XBS denied the allegations of the amended complaint and
asserted several affirmative defenses against all of Hill’s
claims, one of which is relevant here: “Failure to exhaust
administrative and contractual remedies.”
In September 2012, and perhaps independent of this
litigation, XBS issued an updated DRP (“2012 DRP”). The
2012 DRP provides that “each Dispute . . . shall be arbitrated
on an individual basis” and barred the initiation of or
participation in “a class, collective, consolidated or
representative Dispute.” 4
On January 22, 2013, Hill filed her operative second
amended complaint. Hill asserted six claims against XBS
for allegedly violating Washington’s state law wage,
4
Section 4(c)(i) of the 2012 DRP provides in full:
To the extent allowed under the law, each Dispute not
otherwise resolved by the Parties shall be arbitrated on
an individual basis. Except for Disputes asserted by
named plaintiffs or putative plaintiffs in a class,
collective, consolidated or representative action
pending in court before the Effective Date, neither an
Employee nor the Company may initiate or participate
in a Dispute on a class, collective, or consolidated
basis, or in a representative capacity on behalf of other
persons or entities that are claimed to be similarly
situated. An Applicant may not participate in a class,
collective, consolidated or representative Dispute that
has been filed against the Company before the
Applicant’s first day of employment. The arbitrator
shall have no authority to arbitrate a Dispute as a
consolidated class, collective or representative action.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 11
overtime, and consumer protection provisions by
underpaying agents for ordinary work and refusing to
compensate agents for “off the clock” work completed prior
to scheduled shifts. Hill proposed a class of all current and
former XBS agents who worked at XBS call centers in
Washington “between June 5, 2010 and the date of final
disposition of this action.” To remedy the alleged violations
on behalf of herself and the putative class, Hill sought a
declaratory judgment, compensatory and exemplary
damages, and attorneys’ fees and costs.
On February 6, 2013, in its answer to the second
amended complaint, XBS denied its allegations and renewed
its contractual affirmative defenses, now specifically
identifying the 2012 DRP, which unlike the 2002 DRP
expressly barred class-wide litigation of any claims: “Failure
to exhaust administrative and contractual remedies. More
specifically, some members of the alleged Putative Class are
subject to individual arbitration agreements that require
arbitration of their claims and expressly prohibit their
participation in class action litigation.” XBS did not
explicitly assert any similar matter, or indeed mention, the
2002 DRP in its answer.
On June 17, 2013, XBS responded to Hill’s discovery
requests and produced both the 2002 DRP and the 2012
DRP. Approximately one month later, XBS sent discovery
requests to Hill’s counsel, which included requests for
production of documentation related to the putative class
members referenced in Hill’s complaint as well as any other
information that Hill had regarding the claims of those class
members. Notably, XBS again mentioned only the 2012
DRP—it defined the putative class as the individuals that
Hill purported to represent except for the 2012 DRP
signatories, which XBS noted were “bar[red from] . . .
12 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
participati[ng] in th[e] litigation” by the arbitration
agreement. Despite having produced the 2002 DRP several
weeks earlier pursuant to plaintiff’s discovery request, XBS
failed to suggest a similar defense or even to mention that
agreement in these requests.
On October 16, 2013, Hill filed a motion for class
certification under Federal Rule of Civil Procedure 23(a) and
(b)(3). On November 18, 2013, XBS opposed certification
on various grounds, which included arguing that Hill’s
claims were not typical of the class claims because Hill
“d[id] not face defenses that other agents face” and that
“agents hired after September 27, 2012, are subject to
binding individual arbitration.” 5 Unlike its citation of the
2012 arbitration agreement, XBS made no explicit mention
of the 2002 DRP and continued to treat those who had signed
the 2002 agreement as a part of the putative class XBS
opposed. XBS argued that the claims of the putative class,
including those of the 2002 DRP signatories, were not fit for
class-wide resolution only because there were factual issues
in calculating individual damages that would predominate
over any common questions of fact or law. In fact, XBS
spent a significant portion of its briefing in opposition to
class certification attacking the merits of the class’s claims
by contending that under its interpretation of Washington’s
Minimum Wage Act (“MWA”), Hill and all other class
members that she purported to represent, including the 2002
DRP signatories, lacked a meritorious cause of action in the
first place. XBS’s opposition included a notation that XBS
5
In her reply brief in support of her motion for class certification, filed
on December 16, 2013, Hill conceded that “agents who started after
September 27, 2012 and signed an individual arbitration agreement are
excluded from the class.” (emphasis in original).
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 13
intended to file a summary judgment motion on this
interpretive theory that no class member had a meritorious
cause of action shortly thereafter.
As previewed in its opposition to class certification, on
November 27, 2013, XBS did file a motion for partial
summary judgment on the merits of Hill’s claims, in which
it argued that Hill, and the putative class members, had
received all the compensation to which she, and they, were
entitled under the MWA as a “piecemeal” worker.
Importantly, XBS noted that it was moving for summary
judgment primarily because it wanted to resolve the central
legal questions raised by the claims that Hill asserted for
herself and on behalf of the putative class members, which
included the 2002 DRP signatories, because “early summary
judgment [could] obviate the need for certification.” And
XBS made clear in its briefing that it understood that its
motion was aimed at obtaining a judicial resolution of the
legal merits underlying all class members’ claims beyond
those that were personal to Hill, which claims included those
of the putative class members who were signatories of the
2002 DRP. For example, XBS expressly stated that certain
legal arguments that it contended were meritless were raised
by “[c]lass counsel” and were “not advanced by Hill”
because they did not apply to her claims specifically.
Furthermore, in its summary judgment briefing, XBS made
frequent reference to the arguments that “class counsel” had
raised in support of the certification motion, which
certification arguments XBS sought to rebut by contending
that neither Hill nor the putative class members were injured
because XBS believed that they were properly compensated
14 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
for their work. 6
On July 10, 2014, the district court denied XBS’s motion
for partial summary judgment and granted Hill’s motion to
certify a class of current and former XBS call center agents
compensated under the ABC plan (“the ABC Class”)
pursuant to Rule 23(b)(3). The district court accepted Hill’s
concession that agents who signed the 2012 DRP “will be
prevented from participating in this class action” but rejected
XBS’s argument “that this [wa]s a significant enough
number of agents to preclude certification on the basis that
Ms. Hill is atypical.” The district court found common
issues predominated over individual ones because each class
member’s claim turned on whether the ABC plan violated
the MWA. 7 However, the court refused to provide a fulsome
6
Moreover, even Hill and her counsel understood XBS’s arguments to
apply more broadly than Hill’s personal claims of underpayment because
Hill’s response in opposition to the summary judgment motion framed
XBS’s arguments as follows:
Defendants contend that they have no obligation to
pay Ms. Hill and other call center agents the minimum
wage for each hour worked because the agents are
‘pieceworkers.’ There is no genuine dispute that
Xerox pays its Washington employees by the hour and
by the minute, not by the ‘piece’ or unit of work. Thus,
Defendants’ Federal Way call center agents, including
Ms. Hill, are hourly workers. (emphasis added).
And, in its reply brief in support of its summary judgment motion, XBS
embraced this focus on the claims of underpayment made by all putative
class members, including the 2002 DRP signatories, by consistently
referring to the payment that all call center “agents” received.
7
The district court denied class certification as to Hill’s “off the clock”
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 15
definition of the scope of the ABC Class until the parties
submitted additional briefing on the effective date of the
related Sump class arbitration settlement, which covered
similar state law claims brought by a similar class of XBS
call center agents. 8
On July 24, 2014, following the district court’s ruling
provisionally certifying the class, XBS filed a Motion for
and consumer protection claims after concluding that common issues did
not predominate over individual factual questions. In contrast to the
ABC plan, XBS lacked a centralized corporate policy regarding pre-shift
expectations and the contents of call center job advertisements.
8
The Sump class arbitration settlement relates to a proposed class action
filed on July 17, 2008, against Affiliated Computer Services, a
Defendant in this matter. Sump v. Affiliated Computer Servs., No. 08-2-
21283-1 (King Cnty. Sup. Ct.); Case No. 2-08-cv-1082 (W.D. Wash.);
Case No. 116007354 (JAMS). Notably, all plaintiffs in Sump were
compelled to arbitrate under the 2002 DRP. See Sump v. Affiliated
Computer Servs., No. 08-2-21283-1 (King Cnty. Sup. Ct.), Order
Grant’g Mot. Compel Arbit. & Dismiss Without Prejud., Dkt. No. 17A
(filed Sept. 11, 2008) (“The parties are hereby ORDERED to submit all
claims alleged in this action to arbitration in accordance with the terms
of [the 2002 DRP] each plaintiff entered with Defendants and as
Plaintiffs have agreed to do [in their Response to Defendants’ Motion to
Compel Arbitration and Dismiss found at Dkt. No. 17].”); see also id.,
Pls.’ Resp. Defs.’ Mot. Compel Arbit. & Dismiss, Dkt. No. 17 (filed
Sept. 8, 2008) (“Plaintiffs each agreed to submit any claims concerning
their employment to binding arbitration, pursuant to a very detailed
‘Dispute Resolution Plan’ [] promulgated in 2002. . . . [H]aving reviewed
the documents[,] . . . Plaintiffs have agreed to submit their claims to
arbitration pursuant to the Defendants’ plan.”). Notably, the
commencement of the Sump action occurred well before Hill filed her
complaint in this case, and XBS availed itself of its right to compel
arbitration under the 2002 DRP in Sump before it filed its answers in this
case. Of note, named plaintiff Mary Sump (of Sump) had signed the
2002 DRP, in contrast to named plaintiff Tiffany Hill here, who signed
no arbitration agreement whatsoever.
16 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
Reconsideration which, in relevant part, asked for the court
to reconsider its denial of XBS’s summary judgment motion
and its rulings about predominance. XBS argued that
reconsideration was proper because the district court’s
denial of its summary judgment motion was manifestly
erroneous in failing to adopt XBS’s characterization of the
ABC Plan as a piecemeal payment plan and by failing to
credit its interpretation of the MWA, which XBS believed
would permit the “agents” to receive “a windfall” in
compensation. In addition, XBS moved to have the district
court reconsider its grant of Hill’s motion for class
certification by again contending that the factual issues of
calculating damages for the provisional class members,
which at the time covered the 2002 DRP signatories,
trumped the benefit of class-wide resolution. As was the
common theme during its early motions practice before the
district court, at no point in its briefing did XBS identify the
fact that many of the members of the provisionally certified
class were subject to the 2002 DRP and could not be parties
to the class action as a result. This particular omission is
especially notable because it occurred immediately
following the district court’s certification decision, which
decision evinced the district court’s willingness to protect
XBS’s arbitration rights by actively excluding the 2012 DRP
signatories from the provisionally certified class. Thus,
despite the fact that XBS had a clear opportunity to raise the
2002 DRP signatories and to challenge their inclusion in the
class definition, XBS instead opted to request that the district
court reconsider its substantive ruling on XBS’s summary
judgment motion regarding the legal merits of the class
members’ claims of underpayment, which claims included
those of the 2002 DRP signatories. As XBS made this
substantive argument as a direct response to the district
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 17
court’s provisional certification of a class of XBS
employees, XBS evinced a strong desire to obtain a judicial
resolution of the merits of its challenge that would apply not
only to Hill but also to all provisional class members, which
still included the 2002 DRP signatories.
In the same filing, on July 24, 2014, XBS moved in the
alternative to have the district court amend its order to certify
the summary judgment ruling for interlocutory appeal. XBS
sought to pursue a judicial resolution of what it termed the
“threshold issue” of whether or not the ABC Plan, which
covered the entire provisional class including the 2002 DRP
signatories, was a piece rate rather than an hourly
compensation system, which would have effectively
rendered meritless the class claims about underpayment,
including those of the 2002 DRP signatories. As XBS
explained, this interlocutory appeal was necessary because
if the court’s “denial of summary judgment [were] reversed,
the threshold legal issue in the case [would] be[] resolved,
[which would] spar[e] the parties the expensive process of
addressing class certification issues, possibly serving notice
on class members, engaging in additional discovery, and
trying the case.”
On September 18, 2014, the court denied XBS’s motion
for reconsideration and noted that it was not going to
reevaluate its “Rule 23(b)(3) [decision] because [XBS]
point[ed] to no new arguments” as to why class certification
was improper—arguments which could have included
XBS’s arbitration rights under the 2002 DRP. Thus, the
district court left its provisional class certification decision
in place. But the district court did agree with XBS’s
argument in the alternative and certified the portion of its
order denying XBS’s summary judgment motion for
interlocutory appeal under 28 U.S.C. § 1292(b), so that XBS
18 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
could pursue its legal theory that the call center agents were
paid according to a piecework rather than hourly plan under
the MWA. Subsequently, the district court entered a stay
pending resolution of the interlocutory appeal. 9
This Court began those proceedings on December 3,
2014, and ultimately certified the question to the
Washington Supreme Court; adopted that court’s decision
that call center agents are hourly workers protected under the
MWA; and affirmed the district court’s denial of summary
judgment. Hill v. Xerox Bus. Servs., LLC, 868 F.3d 758, 763
(9th Cir. 2017) (“Hill I”) (certifying question); 426 P.3d 703,
708–09 (Wash. 2018) (answering certified question); 771 F.
App’x 771, 772 (9th Cir. 2019) (“Hill II”) (affirming and
remanding) (mem). 10 On July 3, 2019, the final mandate
9
Notably, in support of its motion to stay pending appeal, XBS
reiterated its position that the interlocutory appeal would obviate much
of the class related work because it would result in a judicial resolution
of the merits of a “threshold legal issue” that affected all class members,
including the 2002 DRP signatories.
10
Although the Washington Supreme Court held that the ABC Plan was
not a piecework plan, which under the certification order required this
Court to affirm the district court’s summary judgment decision, XBS
submitted a letter brief to this Court arguing that there was still an open
question about the proper classification of its ABC plan system. Hill v.
Xerox Bus. Servs., LLC, No. 14-36029 (9th Cir.), Letter Br., Dkt. No. 61
(filed Dec. 28, 2018). Thus, even after XBS lost in the Washington
Supreme Court, its letter brief evinced a continued desire for a judicial
resolution of the merits of this question, which resolution would govern
the claims of everyone in the provisionally certified class, including the
2002 DRP signatories. And XBS knew that it was seeking a judicial
resolution of the merits of these claims because it requested that this
Court “hold [that] the ABC plan is not an hourly plan,” which XBS
argued would require “vacat[ing] the district court’s order denying
partial summary judgment” because that holding meant the ABC plan’s
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 19
from this Court issued with respect to those matters, and on
July 16, 2019, the district court lifted the stay and instructed
the parties to file a joint status report. From the moment that
the provisional class was certified on July 10, 2014, until the
stay was lifted on July 16, 2019, over five years had elapsed,
during which time XBS pursued a judicial resolution of the
merits of the central legal issue that undergirded the claims
of Hill and all the putative class members, including the
2002 DRP signatories. 11
B. Notice to Arbitrate Under the 2002 DRP
After the stay was lifted, Hill filed a Motion to Define
Scope on July 18, 2019, which requested that the district
court define the scope of the certified ABC Class to include
signatories to the 2012 DRP, notwithstanding her previous
concession that such signatories be excluded from the class.
On July 26, 2019, the parties filed a Joint Status Report in
“other-than-hourly pay [structure] complied with Washington law.” Id.
at 7.
11
While the dissent briefly acknowledges this six-year detour that XBS
made focused on its legal interpretation of the MWA to defeat the claims
of all members of the class, including the signatories of the 2002 DRP,
it attempts to downplay its relevance. Dissent at 58–59, 76–77. Contrary
to the dissent’s characterization, XBS’s multi-year focus on the merits of
the claims that it actively understood to apply to Hill’s claims as well as
the claims of the 2002 DRP signatories creates a strong inference that
XBS wanted a judicial resolution on the merits and chose to use the
arbitration forum instead as a backup in the event that its summary
judgment expedition failed. Under caselaw, we will not reward XBS’s
attempt to take a second bite from the apple in this manner. In Re Mirant
Corp. v. Castex Energy, Inc., 613 F.3d 584, 590 (5th Cir. 2010)
(explaining that the waiver rule is in place to prevent litigants from
“delay[ing] moving to compel arbitration until they could ascertain how
the case was going in federal district court.” (internal quotations
omitted)).
20 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
which XBS stated its position that “the 2012 and 2002 DRP
need to be specifically addressed prior to finalizing the
class” and that “these issues should be briefed and
considered on class certification. If individuals subject to
arbitration agreements are included in the class, Defendants
anticipate bringing motions to compel individual arbitration
once the class is finalized.” Notably, over six years after
XBS had last referenced the 2002 DRP on June 17, 2013,
when it produced the agreement in response to Hill’s
discovery request, XBS’s statement in the Joint Status
Report was the first time in this case that XBS had explicitly
expressed its intent to compel arbitration under the 2002
DRP in this action—let alone even mention the 2002 DRP—
notwithstanding its actions in the earlier Sump action. 12
On August 5, 2019, in its Response to Hill’s Motion to
Define Scope, XBS urged the district court to “find that
individual arbitration agreements preclude class certification
altogether.” XBS again argued that arbitration agreements
under both the 2002 and the 2012 DRP barred the
participation of many putative class members:
A vast number of putative class members are
parties to arbitration agreements with
12
The dissent contends that the record reveals over a dozen times that
XBS has referenced the 2002 DRP during the course of the litigation.
Dissent at 74. The dissent omits the fact that all but two of the record
cites occurred in 2019 after XBS’s six-year gamble with its summary
judgment merits appeal failed to produce fruit. Furthermore, its two
other mentions of the 2002 DRP involved (1) XBS’s answer to Hill’s
first, and now inoperative, complaint, which was filed before the 2012
DRP was even drafted, and (2) XBS’s production of the 2002 DRP in
2013, which simply lends credence to the fact that XBS knew of its
arbitration right.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 21
Defendants (ACS, XBS, or their successors),
either the version from 2012 (with a class
action waiver) or the one from 2002 (which
was silent as to class actions). The 2002 DRP
is enforceable for class members once the
class is certified based on Lamps Plus, Inc. v.
Varela, 129 S. Ct. 1407 (2019).
On August 13, 2019, the district court issued an order
defining the scope of the ABC Class. Specifically, the
district court defined the ABC class as follows:
All persons who have worked at Defendants’
Washington call centers under an “Activity
Based Compensation” or “ABC” plan that
paid “per minute” rates for certain work
activities between June 5, 2010, and the date
of final disposition of this action.
However, excluded from this class were the signatories to
the 2012 DRP:
In addition, the following exclusion will
apply to the ABC class: “Any employees who
were hired after September 27, 2012 and who
signed arbitration agreements as part of
Defendants’ revised 2012 Dispute Resolution
Program.”
Notably, the court did not address XBS’s arguments
22 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
about the 2002 DRP. 13
Thereafter, and in light of the district court’s class
certification order, Hill and XBS worked together to develop
a final list of 5,772 class members for the purposes of notice
under Rule 23(c)(2)(B). XBS acknowledged that its
preparation of this list involved frequent conferrals with
Hill’s counsel as well as some discovery on the class
members, including the 2002 DRP. During this process, on
September 20, 2019, XBS explained to Hill that it had
included individuals in the class list whose
claims (we believe) are barred because …
they signed earlier arbitration agreements
that (under the Supreme Court’s Lamps Plus
decision) require individual arbitration.
Although we believe it would be more
efficient to remove those individuals before
notice is sent, we left them in the preliminary
class list at this time.
And on November 13, 2019, while explaining to the
district court how the class list was populated, XBS
13
Despite explaining in its response to Hill’s 2019 motion to define the
scope of the class that it believed that class certification could be defeated
by both the 2012 DRP and the 2002 DRP, and despite having represented
in the Joint Status Report that it planned on “filing its own motion
regarding class certification issues,” which necessarily implicated its
argument that “[a] certified class cannot include class members who
entered into arbitration agreements,” XBS never filed such a motion nor
did it move the district court to amend its certification order to remove
the 2002 DRP signatories from the certified class, despite the court’s
evincing its willingness to exclude individuals subject to arbitration
agreements by excluding the 2012 DRP signatories.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 23
reiterated its position that although the signatories under the
2002 DRP were included in the class list, XBS anticipated
moving to compel arbitration against them after the notice
and opt out time window had run.
Hill’s counsel moved forward with a joint motion to
distribute notice and set an opt out schedule, which the
district court approved on December 17, 2019. As is
relevant here, the class notice explained that class members’
rights would be adjudicated unless they opted out and further
stated that employees who had signed the 2012 DRP were
excluded from the class. The class notice also noted that
XBS had raised defenses to the claims asserted, including
“that other Class Members are required to pursue their
claims through individual arbitration.” The notice
administrator reported on March 4, 2020, that the class had
only one opt out and officially contained 5,771 members.
In the intervening time between the district court’s
certification order and the finalization of the class, XBS
continued to engage in standard litigation practice. It
participated in a status conference with Hill’s counsel and
the district court judge, in which it failed to mention the 2002
DRP (a fact XBS does not dispute). And it stipulated to a
proposed case schedule organizing proceedings regarding
discovery, summary judgment, and trial without reference to
the arbitration agreements or a future motion to compel
arbitration against the absent class members. XBS and Hill
engaged in discovery during which time the parties’
damages experts submitted reports and discussed the proper
method for calculating overtime pay. 14
14
The dissent picks up on XBS’s counsel declaration that claims that
24 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
The day after the notice administrator gave his report on
the final class size, on March 5, 2020, XBS filed a motion to
compel individual arbitration by 2,927 class members who
had signed the 2002 DRP. XBS argued that it was able to
identify individual class members and their associated DRP
records only after the finalization of the class definition in
August 2019. XBS further argued that it had lacked the
ability to compel arbitration by these class members until the
notice administrator’s report confirmed the finality of the
class. Hill conceded that the 2,927 class members in
question signed the 2002 DRP and that the 2002 DRP is
enforceable if not waived. However, Hill argued that XBS
had waived its right to arbitrate by moving to compel
arbitration too late in the litigation. The district court agreed
and found that XBS had waived its right to compel
arbitration. XBS timely appealed.
any discovery regarding the 2002 DRP signatories was quite limited.
Dissent at 68. This contrasts with Hill’s representation that discovery
was “extensive.” While the extent of the actual discovery that occurred
post-certification is unclear, the conception that the discovery that did
occur between the class certification and filing of XBS’s motion to
compel was quite limited—which is the impression left by the
declaration of XBS’s counsel—is belied by the record itself. The emails
and excel workbooks discussed in Hill’s damages expert’s report
regarding the purported underpayment of class members’ wages
suggests that XBS was actively involved in discovery during this time
frame. It shared payroll data with Hill via several large excel workbooks,
explained the workbooks in an email thread dated January 10, 2020, and
engaged a rebuttal expert of its own to publish a report on February 24,
2020, which challenged Hill’s expert’s calculations. These exchanges
and the reports themselves evince XBS’s engagement in discovery as to
the class members, including the 2002 DRP signatories, during the notice
and opt-out period on the merits of their claims to underpayment that is
more involved than XBS’s or the dissent’s characterization makes out.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 25
II. STANDARD OF REVIEW
We have jurisdiction under 28 U.S.C. § 1291 as “a
district court’s denial of a motion to compel arbitration is a
final order appealable under the Federal Arbitration Act, 9
U.S.C. § 16(a)(1)(B). We review de novo the district court’s
denial of a motion to compel arbitration, including its
determination that a party has waived the right to arbitrate.”
Newirth by & through Newirth v. Aegis Senior Communities,
LLC, 931 F.3d 935, 939 (9th Cir. 2019) (cleaned up).
III. ANALYSIS
Previously, this Circuit’s arbitration waiver test was
grounded in Fisher v. A.G. Becker Paribas Inc., 791 F.2d
691 (9th Cir. 1986), which required the following: “(1)
knowledge of an existing right to compel arbitration; (2)
intentional acts inconsistent with that existing right; and (3)
prejudice to the person opposing arbitration from such
inconsistent acts.” Newirth, 931 F.3d at 940 (citing Fisher,
791 F.2d at 694). As noted above, however, Morgan has
eliminated the prejudice requirement as an element from any
arbitration waiver test. Now, the test for waiver of the right
to compel arbitration consists of two elements: (1)
knowledge of an existing right to compel arbitration; and (2)
intentional acts inconsistent with that existing right. XBS
challenges both prongs of the above test by asserting that it
neither had knowledge of an existing right to compel
arbitration under the 2002 DRP, nor performed any acts
inconsistent with its right to compel arbitration under the
2002 DRP.
A. Knowledge of an existing right to compel arbitration
Here, XBS argues that until after class certification had
been granted, followed by the completion of the notice and
26 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
opt-out period, “there was no existing right to compel
arbitration because XBS could not move to compel
arbitration against either Hill or putative class members.”
Accordingly, XBS maintains that it lacked knowledge of an
existing right to compel arbitration and, therefore, that it
cannot be charged with waiver of a non-existent right.
In one rather limited sense, XBS is correct—the district
court could not compel nonparties to the case to arbitrate
until after a class had been certified and the notice and opt-
out period were complete. In re JPMorgan Chase & Co.,
916 F.3d 494, 503 n.19 (5th Cir. 2019) (observing that
“courts cannot compel individuals to arbitrate when they are
yet to be identified and have not joined the suit.”); see also
Gutierrez v. Wells Fargo Bank NA, 889 F.3d 1230, 1238
(11th Cir. 2018). However, what XBS fails to appreciate is
that waiver is a unilateral concept. A finding of waiver by
XBS looks only to the acts of XBS, binds only XBS, does
not reach out to affect the rights of as then-unnamed class
members, and does not depend upon when the law requires
or authorizes such a right to be asserted. As noted by the
Supreme Court in Morgan, “[t]o decide whether a waiver has
occurred, the court focuses on the actions of the person who
held the right; the court seldom considers the effects of those
actions on the opposing party.” 142 S. Ct. at 1713; see also
Royal Air Props., Inc. v. Smith, 333 F.2d 568, 571 (9th Cir.
1964) (“But no detriment to a third party is required for
waiver, it is unilaterally accomplished.”).
Moreover, we have never suggested that for waiver
purposes, knowledge of an existing right to arbitrate requires
a present ability to move to enforce an arbitration agreement.
Cf. In re Cox Enterps., Inc. Set-top Cable Television Box
Antitrust Litig., 790 F.3d 1112, 1119 (10th Cir. 2015)
(declining to adopt a rule that would deem the “right to
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 27
arbitrate against [] class members” as known only after “the
class was certified”). 15 On this point, XBS conceded at oral
15
While contending that it is not doing so, Dissent at 80–81, the dissent
disagrees with this principle and embraces XBS’s theory that a party
needs to have present authority to vindicate that right for the party to be
able to take actions inconsistent with an existing right. Dissent at 57–
58, 65–68, 66 n.1, 75. As the dissent frames it, our opinion errs because
“[o]nly” a defendant who is actively litigating against class members
subject to arbitration that are joined to the lawsuit “can be said to have
acted consistent with an intent to waive its right to arbitrate.” Dissent at
64. But in making this assertion, the dissent fails to cite any authority or
to provide any explanation for this rule that underpins its entire analysis.
Nor could it.
To begin with, what the dissent suggests is plainly a forfeiture argument:
a party cannot forfeit what is not available because it never would have
had an opportunity to raise that right in the first instance—hence the
forfeiture caselaw’s focus on whether an issue was “timely assert[ed].”
Crowley v. Epicept Corp., 883 F.3d 739, 748 (9th Cir. 2018) (contrasting
forfeiture with waiver and explaining that waiver is defined as a party’s
“intentional[] relinquish[ment] or “abandon[ment],” which does not turn
on the timing of when a right is asserted).
But furthermore, this erroneous conflation of waiver and forfeiture runs
headlong into centuries of history and common law development
regarding inchoate rights. Inchoate rights are those that a party holds but
does not have the present power to vindicate. Inchoate rights are
“incomplete” because further action is needed to crystalize them—or
more technically, the additional action enables the rightsholder to perfect
the right so that it vests in the owner in its full form. E.g., 2 William
Blackstone, Commentaries *437 (In the case of the common law interest
that a party who reported a statutory violation holds in the penalty
exacted against the violator, “[h]e obtains an inchoate imperfect degree
of property, by commencing his suit; but it is not consummated till
judgment.” (cleaned up)). There are many historical examples of rights
that the Supreme Court has protected in the rightsholder even though the
interest obtained was inchoate. E.g., Hendrie v. Dayles, 98 U.S. (8 Otto)
546 (1878) (enforcing the assignment of an inchoate right to obtain a
28 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
argument that a class action defendant could waive the right
to arbitrate against putative class members by affirmatively
renouncing that right. This concession is fatal to XBS’s
argument because we have never held that explicit
relinquishment is the only way to waive a right to arbitrate.
Indeed, we have stated just the opposite. Newirth, 931 F.3d
future patent); Dundas v. Hitchcock, 53 U.S. (12 How.) 256 (1851)
(enforcing a widow’s relinquishment of her right to claim a dower from
her husband’s estate when it was given as consideration for a mortgage
during her husband’s lifetime, even though the right to a dower estate
was inchoate until the husband’s death); Jones v. Shore’s Ex’r, 14 U.S.
(1 Wheat.) 462 (1816) (protecting the inchoate rights of a collection
officer in the goods seized during a forfeiture action even though the
officer died prior to the condemnation judgment that consummated his
ownership interest); The Mary and Susan, 14 U.S. (1 Wheat.) 46 (1816)
(protecting the inchoate right of a captor to a prize in a ship captured
during war according to a duly passed statute against subsequent
attempts by the executive branch to revoke that statutory power). And
we recently concluded that a property owners’ inchoate rights in a right
of way that had been abandoned by a railroad were not destroyed by the
construction of a public highway. Avista Corp. Inc. v. Wolfe, 549 F.3d
1239 (9th Cir. 2008).
This unbroken line of cases protecting inchoate rights makes it clear that
certain powers inhere in the party that holds such an imperfect right, even
without the rightsholder’s present authority to vindicate it: he can assign
it, disclaim it, or sell it, just to name a few. An easy example will help
solidify this point that a right can exist without the contemporaneous
power to enforce it. Take a party’s contractual right to liquidated
damages in the event that his counterparty materially breaches the
contract. The right is inchoate because he cannot sue for liquidated
damages before the contract is breached. But the fact that the right has
not crystalized, does not prevent the rightsholder from being able to
waive that right in anticipation of the counterparty’s breach—say, by
notifying the counterparty that a particular breach will be excused before
it occurs. Simply, nothing about the timing of when the right can be
protected affects a party’s present ability to act inconsistently with it.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 29
at 942 (explaining that a party can impliedly waive its rights
through “actions [that] amount to a knowing relinquishment
of th[ose] right[s]”); Van Ness Townhouses v. Mar Indus.
Corp., 862 F.2d 754, 759 (9th Cir. 1988) (same).
Further undercutting XBS’s position is its own actions
throughout the course of the litigation, in which XBS raised
the 2012 DRP as to putative class members before the class
had been certified and before it had the ability to move to
enforce that agreement against them. First, XBS asserted the
following as a defense in its answer to Hill’s first amended
complaint: “Failure to exhaust administrative and
contractual remedies.” XBS then expanded on this defense
in its answer to Hill’s second amended complaint: “Failure
to exhaust administrative and contractual remedies. More
specifically, some members of the alleged Putative Class are
subject to individual arbitration agreements that require
arbitration of their claims and expressly prohibit their
participation in class action litigation.” XBS acknowledges
that the above defense from its answer to the first amended
complaint applied to the 2002 DRP, as the 2012 DRP had
not yet been created at the time of that answer. But XBS
concedes that the “individual arbitration agreements” noted
in its answer to the second amended complaint referred only
to the 2012 DRP, as the 2002 DRP did not expressly prohibit
resolution of disputes by class action litigation and because
XBS represents that it referenced the 2002 DRP in only two
instances prior to the parties’ briefing in 2019 regarding the
scope of the class: its first answer and its production of the
2002 DRP during discovery. Moreover, XBS repeatedly
asserted its right to individual arbitration under the 2012
DRP, which ultimately led the district court to exclude
signatories of the 2012 DRP from the ABC Class.
As to the element of knowledge of a right, it is clear that
30 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
XBS had knowledge of and knew how to assert its right to
compel arbitration under the 2012 DRP well before class
certification and notice was complete. XBS similarly
possessed knowledge of the right to compel arbitration as
against the signatories of the 2002 DRP sufficient to satisfy
the first prong of the waiver test. The district court was
correct in so finding.
B. Acts inconsistent with the right to arbitrate
“There is no concrete test to determine whether a party
has engaged in acts inconsistent with its right to arbitrate;
rather, we consider the totality of the parties’ actions.”
Newirth, 931 F.3d at 941 (quoting Martin v. Yasuda, 829
F.3d 1118, 1125 (9th Cir. 2016)) (cleaned up). 16 As we have
previously observed:
We find this element satisfied when a party
chooses to delay his right to compel
arbitration by actively litigating his case to
take advantage of being in federal court. See
Van Ness Townhouses v. Mar Indus. Corp.,
16
In contrast to the dissent’s analysis, our evaluation of XBS’s actions
during the course of the litigation is in line with the “holistic approach”
our caselaw has demanded of us under this prong of the waiver analysis.
Newirth, 931 F.3d at 941. If each act is reviewed in isolation, as the
dissent suggests should be done—even though it denies doing so, Dissent
at 76 n.9—then it is easy to construct reasons and justifications for why
the individual actions highlighted do not evince the desire of a party to
obtain judicial resolution of the issue at hand. But in contrast, evaluating
the totality of a party’s actions guarantees that ambiguous actions are not
explained away when they constitute one facet of a consistent and
intentional practice of seeking judicial resolution of key merits issues
that is inconsistent with that party’s right to have such claims resolved in
an arbitration forum.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 31
862 F.3d 754, 756, 759 (9th Cir. 1988)
(finding waiver when party answered
complaints, moved to dismiss the action, and
did not claim a right to arbitration in any of
the pleadings); Kelly v. Pub. Util. Dist. No. 2,
552 Fed. Appx. 663, 664 (9th Cir. 2014)
(finding this element satisfied when the
parties “conducted discovery and litigated
motions, including a preliminary injunction
and a motion to dismiss”). A statement by a
party that it has a right to arbitration in
pleadings or motions is not enough to defeat
a claim of waiver. See In Re Mirant Corp. v.
Castex Energy, Inc., 613 F.3d 584, 591 (5th
Cir. 2010) (“A party cannot keep its right to
demand arbitration in reserve indefinitely
while it pursues a decision on the merits
before the district court.”); Hooper v.
Advance Am., Cash Advance Ctrs. of
Missouri, Inc., 589 F.3d 917, 923 (8th Cir.
2009) (“A reservation of rights is not an
assertion of rights.”).
Martin, 829 F.3d at 1125 (cleaned up). Our past case of Van
Ness is instructive. There, we concluded that the defendant
acted inconsistently with its right to compel arbitration
“when it made an intentional decision to refrain from filing
a motion to compel arbitration (because it did not want to
sever the arbitrable claims from the nonarbitrable claims),”
and kept the arbitrable claims in federal court for two years
while seeking merits determinations, which “includ[ed]
filing a motion to dismiss for failure to state a claim.”
Newirth, 931 F.3d at 941.
32 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
Importantly, we have never held that a party can act
inconsistent with its arbitration rights only if the relevant
actions are themselves express denials of the right to
arbitrate. 17 Kelly, 552 F. App’x at 664. For example, in
Newirth, the finding of acts that amounted to waiver
included “filing a motion to dismiss [the plaintiff’s]
arbitrable claims” on a key merits issue, the defendant’s
“failure to renew it[s motion to compel arbitration] for a year
while it sought a determination on the merits,” 18 and its
17
This contrasts with the implicit and erroneous assumption made in the
dissent’s analysis—despite its protests to the contrary, Dissent at 80–
81—that only direct evidence of waiver through an express disdain of
the right to arbitrate can constitute acts inconsistent with that right.
Dissent at 75 (contending that the acts deemed inconsistent with a party’s
arbitration rights must be explicitly “directed at the class” members who
are bound by the arbitration agreement). As we explain, our caselaw is
replete with examples of waivers that are evidenced by circumstantial
evidence of inconsistency (i.e., the inconsistency is implicit). In fact, of
the caselaw that the dissent cites, only one is an implied waiver case that
involves a litigant that made an affirmative statement that expressed a
preference for the federal courtroom. Dissent at 67–68 (quoting Martin,
829 F.3d at 1122, 1126). But even Martin does not stand for the principle
that there must be an express disavowal of one’s arbitration right to find
an implied waiver occurred. Our Court in Martin highlighted all of the
acts that were implicitly inconsistent with the defendants’ arbitration
right, such as filing a motion to dismiss, engaging in discovery, and
drafting a joint stipulation to structure the litigation. 829 F.3d at 1126.
The panel then mentioned the defendants’ counsel’s statement that his
clients were “better off” in court as mere bolstering evidence that the
defendants’ active litigation amounted to waiver. Id. Thus, Martin does
not alter the general rule that XBS can waive its arbitration right under
the 2002 DRP without having expressly rejected that right.
18
Newirth’s express reliance on the defendant’s failure to renew its
motion to compel arbitration after having filed and withdrawn the motion
earlier in the litigation undermines the dissent’s characterization of our
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 33
failure to “avail itself of local rules that would have allowed
it to seek relief from case management and discovery
obligations.” Id. at 942–43. Similarly, in Van Ness, the
court highlighted the party’s inconsistent behavior with
respect to its arbitration right, which was revealed by its
“extended silence” and “much-delayed demand for
arbitration,” both of which can hardly be described as
explicit or active litigation choices revealing an express
eschewal of the party’s arbitration right. 862 F.2d at 759.
Van Ness instead explains that the inferences drawn from the
party’s choice to rely on judicial proceedings, such as by
filing “pleadings[ and] motions and approving a pre-trial
conference order,” amount to a waiver, because one cannot
claim to be interested in preserving his right to an arbitration
opinion as purporting to “crowbar[]” our waiver analysis “into a yawning
new forfeiture rule.” Dissent at 81. This is because this aspect of
Newirth implies that in certain scenarios, a defendant’s neglecting to
make certain arguments when viewed against the backdrop of his other
actions can actually serve as circumstantial evidence of an intentional
relinquishment, even if the failure to act is normally associated with
forfeiture. The key is understanding that when engaging in an implied
waiver analysis, the omission is viewed through the lens of the
defendant’s other actions rather than from the perspective of when the
law demands that an argument be raised. This is because waiver turns
on how the party itself acted with respect to its rights, while forfeiture
depends on when the law dictates that a right be asserted. Crowley, 883
F.3d at 748. Thus, when we rely on XBS’s omissions in this opinion, it
is not as if we are holding that XBS or similarly situated defendants need
to make affirmative arguments about certain rights or risk losing their
defenses. Rather, we are engaging in a holistic analysis that reveals that
XBS’s failure to raise certain arguments is one link in a chain of
consistent behavior evincing its disinterest in pursuing the 2002 DRP
signatories’ claims in arbitration—disinterest, that is, that lasted until
XBS’s motion for summary judgment was determined (and denied) by
the ruling of the Washington State Supreme Court.
34 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
forum if he instead relies on the judicial process. Id. Thus,
under our implicit waiver analysis, we are tasked with
evaluating a party’s actions and asking whether those
actions, even if seemingly commonplace and not an express
disavowal of arbitral forums, evinced the party’s partiality
for a judicial resolution of the claims.
Here, there can be little doubt that XBS acted
inconsistently with its right to compel arbitration under the
2002 DRP. As the detailed factual and procedural history of
this case reveals—and as explored further below—XBS
exerted a significant amount of energy challenging the
merits of the legal theory underlying the claims that Hill
raised personally and on behalf of the class members,
including the 2002 DRP signatories. And XBS pursued this
challenge in three different courtrooms (the district court,
this Court, and the Washington Supreme Court), all without
even attempting to reserve its arbitration right under the
2002 DRP when it expressly and consistently did so for its
arbitration right under the 2012 DRP. While XBS could not
actively move to compel arbitration until the moment that it
did, the inferences drawn from the record all point towards
waiver: namely, XBS embarked on a six-year appellate
journey aimed at judicially resolving the merits—the legal
heart—of the class members’ (including class members who
had signed the 2002 DRP) claims with full knowledge that
their claims were implicated by the appeal to the same extent
as were Hill’s claims. And XBS evinced this understanding
in its own briefing by consistently referring to its call center
agents broadly, and by making a distinction between
arguments made by “class counsel,” which were not
applicable to Hill, and those that Hill raised for herself. The
litigation history, during which the specific acts we analyze
below occurred, tells the story of XBS’s tactical choice to
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 35
resolve the claims judicially and reveals that XBS belatedly
chose to retreat and to claim the benefit of arbitration under
the 2002 DRP only once its judicial strategy failed.
First, as previously noted, XBS many times explicitly
asserted as a ground for obligatory arbitration the 2012 DRP
without also asserting the same for the 2002 DRP and it
repeatedly noted that signatories to the 2012 DRP were
“subject to binding individual arbitration.” The decision to
pursue “binding individual arbitration,” where possible,
while keeping claims subject to possible group arbitration in
federal court with other nonarbitrable claims is similar to the
facts of Van Ness, where we previously found waiver of the
right to arbitrate. Similarly, in opposing Hill’s motion to
certify a class, XBS asserted that the 2012 DRP precluded
certification for lack of typicality as a basis for denying class
certification, without similarly raising the lack of typicality
of class members who signed the 2002 DRP. Our system
generally does not permit a party to lie in the weeds without
consequences. 19 And while the two agreements are certainly
different contracts, these differences imply that XBS
believed it was more strategically advantageous to challenge
the merits of the 2002 DRP signatories’ claims through its
summary judgment motion or by defeating class certification
with the individualized damages calculations instead of
relying on the arbitration right that it raised only for the 2012
DRP. On its own, the disparate treatment is not
dispositive—nor is it some counting rule as the dissent
19
Indeed, we have previously held that “a party’s extended silence and
delay in moving for arbitration may indicate a conscious decision to
continue to seek judicial judgment on the merits of the arbitrable claims,
which would be inconsistent with a right to arbitrate.” Martin, 829 F.3d
at 1125 (cleaned up).
36 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
contends—but instead serves as evidence from which we can
infer that XBS wanted the 2002 DRP signatories’ claims,
unlike the claims of the 2012 DRP signatories, resolved on
the merits in court. When paired with the discovery requests
and the summary judgment motion that involved six years of
merits litigation, discussed below, this disparate treatment
implies that XBS’s “extended silence and much-delayed
demand for arbitration [under the 2002 DRP] indicates a
‘conscious decision to continue to seek judicial judgment on
the merits of the arbitrable claims [raised by the 2002 DRP
signatories]. This choice was inconsistent with the
agreement to arbitrate those claims.’” Van Ness, 862 F.2d at
759 (internal alterations omitted).
Second, XBS further sought to take advantage of
litigation in federal court by requesting extensive discovery
on unnamed parties to the case—discovery which
necessarily included signatories to the 2002 DRP. In its first
discovery requests to Hill, XBS defined “Putative Class
member” as follows:
“Putative Class member” means individuals
included in the “Class Definition” provided
in Plaintiffs Second Amended Class Action
Complaint, with the exception of any
employees of Defendants who were hired
since September 2012 and who entered into
or are subject to the Xerox Business Services
Dispute Resolution Plan and Rules (“DRP”)
that includes an individual arbitration
agreement and class action waiver that bars
their participation in this litigation.
(emphasis added). XBS notably excepted from its discovery
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 37
requests signatories to the 2012 DRP, while not excepting
the 2002 DRP signatories—thereby requesting that Hill
provide extensive information on putative class members
such as the 2002 DRP signatories. Among other particulars,
XBS requested the following information from Hill:
Interrogatory No. 1: For Plaintiff and each
Putative Class member, please describe in
detail every communication (e.g., the sender,
receiver, date, manner, and content of the
communication), if any, received by the
individual or of which the individual is
aware, that required, requested, allowed,
suffered, or permitted the individual to work
any time that was not properly recorded in
Defendants’ respective timekeeping systems.
Interrogatory No. 2: For Plaintiff and each
Putative Class member, please list the precise
amount of unrecorded, off-the-clock, or
uncompensated work, if any, each individual
worked each work week while the individual
was employed by one of the Defendants.
Interrogatory No. 3: For Plaintiff and each
Putative Class member, please state precisely
how each weekly amount of unrecorded, off-
the-clock, or uncompensated work identified
in Interrogatory No. 2, if any, was calculated,
specifying the precise amount and timing of
any pre-shift, during shift, and post-shift
work claimed each day.
38 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
***
Request for Production No. 6: Please
produce all documents received by Plaintiff
or any Putative Class member or of which
Plaintiff or any Putative Class member is
aware that required, requested, allowed,
suffered, or permitted them to work any time
that was not properly recorded in
Defendants’ respective timekeeping systems.
***
Request for Production No. 9: Please
produce all journals, diaries, calendars, day
planners, schedules (both paper and
electronic), logs, and any other document that
discusses the activities of Plaintiff or any
Putative Class member or reflects how they
spent their time on any day that they worked
for a Defendant from June 5, 2010, to the
present, including, but not limited to, any
documents or emails that reflect or contain
personal notes, thoughts, concerns,
understandings, appointments, schedules,
social or business engagements, or
obligations or expenditures of time.
Request for Production No. 10: Please
produce all bank records of Plaintiff or any
Putative Class member that reflect when
and/or where expenditures were made
covering time periods during which they
worked for a Defendant at any time from June
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 39
5, 2010, to the present, including, but not
limited to, all records of ATM transactions
and copies of checks for accounts maintained
by them, for their benefit, or that they have
used.
(emphases added). To be sure, Hill declined to produce any
of the requested information, and instead responded to each
of these discovery requests the same:
Plaintiff specifically objects to this request
because it seeks Plaintiff’s knowledge
regarding “Putative Class members” and
[information or documents] related to
“Putative Class members,” which are
improper subjects for discovery to class
representatives. 3 Alba Conte & Herbert B.
Newberg, Newberg on Class Actions § 7:8
(4th ed. 2013) (“[T]he extent of the
knowledge of the plaintiff of claims of absent
class members is irrelevant and an improper
subject for discovery.”).
However, that Hill may not have been directly prejudiced by
XBS’s requests concerning 2002 DRP signatories is
immaterial after Morgan. It is clear from the record that
XBS explicitly sought extensive discovery as to 2002 DRP
signatories 20—signatories XBS treated as putative class
20
While the dissent quibbles with our use of the word “extensive” to
challenge our treating the discovery requests as evidence of inconsistent
acts, Dissent at 68, it fails to dispute that the documentation and details
about the class members that XBS expected to receive as a result of these
40 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
members—which weighs in favor of a finding that XBS
acted inconsistently with its right to compel arbitration under
the 2002 DRP. Again, the discovery requests served on Hill
regarding the putative class, which included the 2002 DRP
signatories, may not be dispositive. But they serve as
evidence that XBS wanted to challenge judicially the merits
of the claims that the putative class members were
underpaid 21—a strategic choice that was revealed by XBS’s
reliance on the judicial discovery mechanism. Just as with
the disparate treatment between the 2002 DRP and 2012
DRP, this discovery behavior further substantiates the
inferences drawn from the record suggesting that XBS was
more interested in resolving this litigation, which included
the 2002 DRP signatories’ claims, in court rather than in
requests would have been quite expansive. That Hill ignored them has
no bearing on the fact that demanding of Hill all of the details she had
on all putative class members, such as timekeeping communications,
information about the purportedly uncompensated work that was
performed, and the precise calculations used to ascertain how much the
class was underpaid, amounted to asking that Hill turn over a significant
amount of information. This is on top of XBS’s demands for all the time-
keeping documents, bank records, and personal logs kept by the putative
class members. Although Hill responded to each request with the same
objection, XBS anticipated receiving a considerable amount of
documentation relating to the factual basis for all putative class
members’ claims, including those of the 2002 DRP signatories. Thus,
there is nothing untoward about describing the requested discovery on
the 2002 DRP signatories as extensive.
21
Indeed, as highlighted in this case’s procedural history, XBS continued
to engage in active discovery regarding the 2002 DRP signatories even
after it had made express its intention of compelling arbitration under the
2002 DRP after class certification was finalized: XBS produced time
sheets and even engaged an expert to produce a report that challenged
class counsel’s expert’s method for calculating how much class members
were purportedly underpaid. See supra note 14.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 41
arbitration.
Third, and most clearly, XBS “actively litigated” this
case through filing a motion for partial summary judgment
on the issue whether unnamed class members subject to
XBS’s ABC Pay scheme were “piecemeal” workers under
the MWA. If granted, this motion would have defeated a
substantial amount of the claims in this case, both as to Hill
and as to the signatories of the 2002 DRP. This motion for
partial summary judgment led the district court to certify an
interlocutory appeal which XBS pursued for nearly five
years. It is difficult to understate the possible effect of this
particular strategy. Had it been effective, it would have
struck an arrow through the heart of all class members’
claims, including the claims of the signatories of the 2002
DRP. And XBS aggressively pursued its interpretive theory,
even after the legal argument had failed, see supra note 10.
These actions reveal that XBS was determined to foreclose
all class claims, including those of class members who had
signed the 2002 DRP, by obtaining a favorable judicial
ruling. In the motion to dismiss context, we have noted that
a party seeking “dismissal with prejudice on a key merits
issue that would preclude relief as to one or more of
plaintiffs’ claims . . . [is] seeking a ruling on the merits.”
Martin, 829 F.3d at 1126 n.4. Similarly, XBS was “seeking
a ruling on the merits” through its motion for partial
summary judgment, which ruling would have foreclosed the
claims of the entire ABC Class, whether or not the members
of the ABC class had signed the DRP agreements of 2012 or
2002. 22
22
Beyond its argument for a bright-line rule that a class action defendant
can never waive its right to compel arbitration as against unnamed class
42 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
members, XBS presents no reasons explaining why litigating its motion
for partial summary judgment is consistent with its right to compel
arbitration under the 2002 DRP. A ruling that putative class members
were “piecemeal” and not “hourly” workers under Washington’s
Minimum Wage Act would have denied the claims of all ABC Class
members, whether they were signatories to the 2002 DRP, 2012 DRP, or
indeed, even non-signatories to either.
The dissent’s argument to avoid this result is also unavailing. The
dissent claims that in isolation we can understand the summary judgment
motion as being directed only at Hill and her claims and therefore we
should not credit this as an inconsistent act. Dissent at 65–66, 66 n.1.
There are several problems with this argument.
First, XBS filed an opposition to Hill’s motion for certification
immediately prior to filing this summary judgment motion, in which
opposition it contended that the proposed class, which included the 2002
DRP signatories but excluded the 2012 DRP signatories, failed because
of individualized damages issues and because Hill and the proposed class
did not have a proper claim under XBS’s theorized interpretation of the
MWA. XBS also previewed its summary judgment motion in this
opposition filing by stating that “[n]ow that [Hill’s] counsels’
argument(s) have finally been revealed, Defendants will move for
summary judgment” on its theory that “Hill’s argument(s) are simply a
misstatement of the law” with respect to the purported underpayment
that was applicable to every single class member’s claims, 2002 DRP
signatories included. For this reason, XBS argued that the district court
should “consider that motion prior to ruling on class certification” in
light of the caselaw encouraging district courts to exercise their
discretion and rule on summary judgment motions first if doing so would
obviate further litigation. It was against this backdrop that XBS filed its
summary judgment motion. This timeline creates a strong inference that
XBS understood that even if no class were yet certified, its success on
the merits of its theory that the class was paid the proper amount for its
work under a payment plan that was compliant with the Washington
MWA would defeat Hill’s claims as well as the claims of all of the other
individuals in the proposed class (including the signatories to the 2002
DRP) that XBS was simultaneously trying to stop from being certified.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 43
Attempting to obtain a judicial resolution on the merits of the causes of
actions undergirding all the class claims that XBS expressly knew would
affect more than just the named class representative, in this context,
evinces XBS’s desire to remain in a judicial forum rather than to seek
refuge in arbitration.
Second, XBS actually argued in its summary judgment motion that the
district court should resolve the open issue whether the “structure of the
compensation system[]” “violate[d] the Washington Minimum Wage
Act” because that resolution would “obviate the need for certification.”
And XBS’s entire briefing on whether its compensation structure
violated the MWA focused on aspects of the complaint that were
applicable to the “agents” of the company and the arguments that “class
counsel” had made but were “not advanced by Hill.” In fact, XBS made
the fact that it was attacking both Hill and the absent class members
(which XBS defined as including the 2002 DRP signatories) express. It
argued that Hill’s theory regarding the compensation structure could not
prevail because it would “harm[] the very people Hill allegedly seeks to
represent.” (emphasis added). The language XBS used in its own
briefing belies the dissent’s contention that XBS was focused solely on
arguing against Hill when it submitted its summary judgment motion. It
explicitly distinguished between Hill and the class counsel and made
frequent reference to the claims of the class members rather than just to
Hill. This strategic language employed in the summary judgment
briefing bespeaks XBS’s desire to obtain a judicial resolution on the
merits of the 2002 DRP signatories’ claims.
Again, the dissent’s choice to read the question in isolation fails to
appreciate the context that evidences XBS’s inconsistency with respect
to its arbitration rights under the 2002 DRP. The context explains why
the fact that Hill was the only joined party to the lawsuit does not do the
work the dissent believes it does. XBS may have nominally been
litigating against Hill at the time. But its strategic approach to the
impending class certification reveals that XBS knowingly argued about
the merits of all class members’ claims, whether arbitrable or not, for the
express purpose of obtaining a judicial order that would foreclose all
class claims. This go-for-broke strategy to end the litigation in one fell
swoop judicially—without any suggestion that XBS intended on
44 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
These actions present a clear narrative of XBS’s strategic
choice to engage the judiciary for resolution of the class
claims rather than to obtain a resolution from an arbitrator.
Taking them together, XBS treated its arbitration right under
the 2002 DRP as akin to the other class claims that XBS
viewed as meritless not because of any contractual right
XBS held, but because XBS believed that its ABC payment
structure was legally compliant with the Washington state
wage law, which implied that no underpayment occurred.
XBS repeatedly excluded the 2012 DRP but left the 2002
DRP to be litigated just the same as the non-arbitration
bound class claims, like Hill’s. XBS engaged in discovery
and attacked the legal merits of those claims with a summary
judgment motion, in which motion XBS made clear that it
was challenging more than just Hill’s litigation strategy: it
employed language speaking to the ABC payment system
writ large, it repeatedly referred to its agents as a whole,
rather than referring just to Hill, and it even went so far as to
distinguish, expressly, between Hill’s arguments and her
counsel’s arguments on behalf of the “people Hill allegedly
seeks to represent.” Under our caselaw, XBS’s behavior was
inconsistent with its 2002 DRP arbitration right because it
evinced a strong preference for judicial resolution of the
2002 DRP signatories’ claims on the merits—namely,
whether the ABC payment plan ran afoul of the MWA. As
we have explained in cases past, now that XBS’s strategic
choice to litigate in federal court has failed to pan out, we
will not endorse its attempt to play a game of “heads I win,
tails you lose” by belatedly seeking refuge in arbitration for
the resolution of those same claims. Martin, 829 F.3d at
retaining its right to arbitrate against the 2002 DRP signatories—could
not be more inconsistent with XBS’s arbitration right.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 45
1125 (internal quotations omitted).
Indeed, even in 2019, XBS did not act consistently
before the district court when it came to the 2002 DRP
signatories. In a joint status report to the district court, XBS
raised the issue of putative class members who had signed
the 2002 DRP and explained that “now that Plaintiff has
opened the door to this issue,” “[a] certified class cannot
include class members who entered into arbitration
agreements.” XBS also stated that it “anticipate[d] . . . filing
its own motion regarding class certification issues.” But
XBS never filed such a motion, nor did it ask the district
court to remove the 2002 DRP signatories from the certified
class. When the district court did not address the 2002 DRP
signatories in its August 13, 2019 order, XBS made no
apparent, further effort to flag the issue for the court. XBS’s
actions both demonstrate its ability to raise these issues prior
to the end of the opt-out period, and its failure to take a
consistent approach as to whether the inclusion of the 2002
DRP signatories in the class was an issue that the district
court should have addressed.
XBS’s attempt to overcome these arguments by
contending that the language in the class notice itself
demonstrates that it had not acted inconsistently with respect
to the 2002 DRP signatories is unavailing. XBS cites the
following language as evidence of its consistent behavior:
“Defendants have also raised other defenses including . . .
that other Class Members are required to pursue their claims
through individual arbitration.” And it reads these
“defenses” as necessarily incorporating and preserving its
right to compel arbitration against the 2002 DRP
46 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
signatories. 23 But we do not think the class notice saves
XBS from the unfavorable inferences drawn from XBS’s
other actions. The class notice at various points noted that
class members’ rights would be adjudicated in the class
action unless they opted out, and it specifically noted that
employees who had signed the 2012 DRP were excluded
from the class, without expressly mentioning the 2002 DRP.
At most, the class notice noted that XBS might try to argue
that some persons receiving the notice who were not subject
to the 2012 DRP might also be required to pursue their
claims in arbitration.
But the language in the class notice that XBS points to
did not somehow insulate XBS from a finding that it had
waived any right to pursue arbitration under the 2002 DRP.
And a generalized reference to defenses does not foreclose
XBS’s having engaged in litigation behavior that is
inconsistent with its exercising its right to arbitrate, as we
have found here. This is especially true given the timing of
when XBS crafted the class notice: late 2019. The class
notice was drafted after XBS had succeeded in excluding the
2012 DRP signatories from the class two separate times. It
also was written after XBS had served discovery requests on
Hill evincing a desire to use the judicial forum to resolve the
23
XBS appears to have failed to see the irony in making this argument.
Even though we do not find the language unequivocal as XBS does, by
contending that the notice’s language identifies that XBS has “raised
other defenses”—which XBS contends include its right to compel
arbitration under the 2002 DRP—XBS has effectively conceded the
knowledge prong of the waiver analysis. Namely, if XBS believes that
it could communicate its right to arbitration under the 2002 DRP in the
notice and that it in fact did, it admits that it both had knowledge of that
right and that it knew how to assert its intention of exercising that right
prior to having the actual ability to do so.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 47
putative class members’ claims, which putative class
included the 2002 DRP signatories. And most importantly,
the class notice was crafted after the six-year appellate
detour XBS took to litigate the merits of the ABC system’s
compliance with the MWA, which merits-based decision
would have effectively rendered the 2002 DRP signatories’
claims a nullity had XBS’s theory succeeded. XBS’s choice
of language for the class notice, was too little and far too late.
Overall, considering the totality of the circumstances, as
we must, 24 we hold that the district court properly found that
XBS has acted inconsistently with its right to compel
arbitration under the 2002 DRP.
C. Futility
Finally, XBS asserts two reasons why it would have been
“futile” for it to have filed a motion to compel arbitration
sooner than it did, and that, accordingly, its otherwise clear
waiver of the right to compel arbitration should be excused.
The doctrine of futility establishes that a party unable to
assert a right due to the prevailing state of the law is excused
from conduct otherwise constituting waiver.
Fisher v. A.G. Becker Paribas, Inc. acknowledged a
futility defense to negate a party’s failure to compel
arbitration earlier in the litigation. 791 F.2d 691, 693 (9th
Cir. 1986). There, a securities firm had been sued by a group
24
See, e.g., Newirth, 931 F.3d at 942 (“Under the totality of these
circumstances, we conclude that Aegis knowingly decided to defer its
right to compel arbitration to avail itself of the benefits of the federal
court forum, an intentional action inconsistent with its known right to
compel arbitration.”); Martin, 829 F.3d at 1126 (“We agree with the
district court that the totality of these actions satisfies this element
[inconsistent acts].”)
48 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
of investors on both federal securities law claims and state
law claims. Id. at 692. The investors had signed contracts
with the securities firm agreeing to resolve any dispute by
arbitration. Id. at 693. However, there was a growing
recognition of the judicial doctrine known as “intertwining,”
which prevented a party from compelling arbitration when a
lawsuit contained both arbitrable and nonarbitrable claims
that arose from the same transaction. Id. at 695–97. Under
an application of the “intertwining” doctrine, the securities
firm in Fisher would not have been able to compel
arbitration of the state law claims (which were otherwise
arbitrable), as the federal securities law claims were
nonarbitrable at that time. Id. at 697. 25
The initial lawsuit in Fisher was brought in August 1981.
Id. at 696. The Supreme Court rejected the “intertwining”
doctrine in March 1985. Dean Witter Reynolds, Inc. v. Byrd,
470 U.S. 213 (1985). Therefore, from August 1981 until the
decision in Dean Witter Reynolds was handed down in
March 1985, the securities firm did not file a motion to
compel arbitration due to its belief that doing so would have
been “futile.” Id. at 693. However, shortly following Dean
Witter Reynolds, the securities firm filed a motion to compel
arbitration. Id. The district court denied the motion after
finding the right to compel arbitration was waived. Id. This
court in Fisher reversed and remanded on the basis of
futility. Id. at 698.
Notably, our circuit did not formally recognize the
“intertwining” doctrine until February 1984 in Byrd v. Dean
25
Federal securities claims arising under the Securities Act of 1933, as
were asserted in Fisher, were not arbitrable until the Supreme Court
decided Rodriguez de Quijas v. Shearson/American Express Inc., 490
U.S. 477 (1989).
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 49
Witter Reynolds, Inc., 726 F.2d 552 (9th Cir. 1984), the case
the Supreme Court took on appeal and ultimately used as the
vehicle to reject the “intertwining” doctrine altogether.
Therefore, from August 1981 (the filing of Fisher) through
our decision in Byrd in February 1984, the doctrine of
“intertwining” was not established in Ninth Circuit caselaw.
Id. at 697. However, Fisher found that although there was
no binding precedent establishing “intertwining” in this
circuit, the securities firm
correctly suggested that it would have been
futile for it to make a motion to compel
arbitration at the outset of this litigation. As
noted above, counsel for [the securities firm]
examined the complaint filed by the Fishers
and decided, based on our comment in De
Lancie v. Birr, Wilson & Co., 648 F.2d 1255,
1259 n.4 (9th Cir. 1981) and the trend of
federal authority, that a motion for arbitration
would have been denied because the claims
were not severable. An evaluation of existing
case law on this subject from 1981 to 1985
would have indicated to any competent
attorney that an agreement requiring
arbitration of disputes involving securities
law violations was not enforceable in this
circuit until the Supreme Court’s repudiation
of the rule in 1985.
Id. Following Fisher, we have seldom had occasion to
discuss the contours of our futility jurisprudence. However,
we provided the following commentary on futility in
Gutierrez v. Wells Fargo Bank, NA, 704 F.3d 712 (9th Cir.
2012):
50 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
Wells Fargo claims that any “existing right”
arose only after Concepcion and thus it did
not act inconsistently with that “existing
right” because it would have been futile to
seek arbitration earlier. See Fisher, 791 F.2d
at 695. The futility of an arbitration demand,
however, is not clear cut here. In
contemporaneous consumer litigation,
litigants did succeed in compelling
arbitration despite the existence of the
Discover Bank rule. See, e.g., Dalie v. Pulte
Home Corp., 636 F.Supp.2d 1025, 1027
(E.D.Cal.2009) (recognizing that “under
California law a class action waiver is only
unenforceable in a narrow set of
circumstances”); McCabe v. Dell, Inc., No.
CV 06–7811, 2007 WL 1434972, at *3–4
(C.D. Cal. Apr. 12, 2007) (compelling
arbitration after finding the arbitration clause
enforceable under California law); Galbraith
v. Resurgent Capital Servs., No. CIV S 05–
2133, 2006 WL 2990163, at *2 (E.D. Cal.
Oct. 19, 2006) (same). Especially because
the CAA did not prohibit class arbitration, a
motion to compel arbitration was not
inevitably futile under the prescribed case-by-
case analysis. See Douglas v. U.S. Dist.
Court for Cent. Dist. of Cal., 495 F.3d 1062,
1068 (9th Cir. 2007) (whether arbitration can
be compelled “depends on the facts and
circumstances developed during the course of
litigation”).
Id. at 721 (emphases added). Whatever tension may exist
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 51
between the futility standards articulated in Fisher (futility
exists if the right asserted is not guaranteed to be enforced)
and Gutierrez (futility exists only if the assertion of the right
is guaranteed to fail), we are satisfied that XBS has not met
its burden to establish futility.
On this point, XBS first reprises the argument that it
would have been futile to file a motion to compel arbitration
until after class certification and notice, as until after class
certification and notice brings the unnamed class members
into the case, the district court lacked jurisdiction over those
individuals. The short answer: waiver does not require a
court to have jurisdiction over the beneficiaries of the
waiver; it does not even require a lawsuit to have been filed.
As previously discussed, we do not hold that XBS was
required to file a motion to compel before it did. Instead, we
simply recognize that under the circumstances of this case—
and given XBS’s various other actions (including raising the
2012 DRP arbitration agreement repeatedly during its
motions practice before the district court)—it was
permissible to find that XBS engaged in actions during the
course of the litigation that were inconsistent with its right
to compel arbitration under the 2002 DRP. And we conclude
that as a result, had it wanted to preserve its arbitration rights
under the 2002 DRP, XBS had a choice to set the record
straight by dispelling the notion that it was waiving its rights
under that 2002 agreement. Namely, rather than laying
down a “use it or lose it” rule that will require future
defendants with arbitration agreements to provide
affirmative notice of their arbitration rights at a specific time
during the litigation—which would be proper only for a
forfeiture case—we find that XBS was at risk if it failed to
provide notice of its intention to seek arbitration of the
claims of signatories of the 2002 DRP because such notice
52 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
was needed to correct the impression of waiver that XBS
itself created when it acted inconsistently with its 2002 DRP
arbitration rights by its litigation practices in the courts.
For this reason, XBS errs in relying on our decision in
Moser v. Benefytt, Inc., 8 F.4th 872 (9th Cir. 2021). In that
case, the district court held that a class action defendant had
waived any objection to class certification based on the
district court’s lack of personal jurisdiction over non-
California plaintiffs because the defendant had not included
that defense in its Rule 12 motion to dismiss earlier in the
suit, even though at the time of the Rule 12 motion, those
out-of-state plaintiffs were only putative class members and
were not yet parties to the litigation. Id. at 874–75. We
explained that a defendant loses a motion to dismiss based
on lack of personal jurisdiction by failing to include the
defense in a Rule 12 motion only if that defense were
“available” at the time of the motion. Id. at 877 (relying on
the language in Fed. R. Civ. P. 12(g)(2)). And we held that
as the defendant could not have raised a personal jurisdiction
defense at the Rule 12 stage as to unnamed putative class
members who were not parties and against whom a motion
to dismiss could not yet be filed, such a personal jurisdiction
defense was not then “available” under Rule 12(g)(2). Id. at
877–78.
Moser is of no help to XBS. Here, our holding affirming
the district court is tied to XBS’s litigation behavior as a
basis for its waiver—not its failure to compel arbitration
against putative class members—whereas Moser dealt with
the operation of Rule 12 and was expressly tied to its
language regarding the “availab[ility]” of the defense of lack
of personal jurisdiction. Because we hold that the district
court permissibly found XBS waived this right through its
specific actions and inactions over the course of years of
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 53
litigation, Moser is inapposite. Moser would be analogous
only if our holding in this case turned on the timeliness of
XBS’s motion to compel arbitration, because Moser
assessed at what stage of the litigation that defendant was
obligated to raise its personal jurisdiction defense by a
motion to dismiss. Instead, our analysis here turns on the
separate issue of whether XBS’s litigation behavior evinces
its knowledge of the right to compel arbitration and
consequently, whether it acted inconsistently with that right.
That XBS took actions inconsistent with its arbitration
rights under the 2002 DRP by choosing to raise the 2002
agreement as a defense only after engaging in six years of
merits litigations that, had it been successful, would have
defeated the claims by the signatories of the 2002 DRP
agreement, despite having successfully preserved its 2012
DRP arbitration rights by seeking the 2012 DRP signatories’
exclusion from the provisionally certified class,
substantiates a finding of waiver. And under the
circumstances of this case, because its actions were
inconsistent with its arbitration rights under the 2002 DRP,
had XBS wanted to avoid a waiver of the 2002 DRP
arbitration rights, it was responsible for concretely signaling
its intention to raise the 2002 DRP arbitration defense to the
court 26—an act that would not have been futile because it
26
Because the dissent claims that this amounts to a novel forfeiture rule,
Dissent at 81, it bears repeating why XBS was responsible for providing
notice of its intention to compel arbitration under the 2002 DRP earlier
in the litigation. This obligation does not arise because XBS’s actions
were untimely—in fact, it appears that XBS’s motion to compel
arbitration was in fact timely, which would make any finding that XBS
forfeited its 2002 DRP arbitration rights legal error. We are holding
instead that XBS needed to provide notice of its arbitration rights
54 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
would have put all relevant parties on notice of its claimed
right to arbitrate the claims of the signatories of the 2002
DRP. Indeed, the success XBS obtained in having the 2012
DRP signatories excluded from the ABC Class is evidence
enough that it would not have been futile for XBS to assert
its right to compel arbitration under the 2002 DRP earlier in
the litigation below.
XBS second argument claims that it would have been
futile to compel arbitration under the 2002 DRP before the
Supreme Court decided Lamps Plus v. Varela, 139 S. Ct.
1407 (2019). This is because, according to XBS, before
Lamps Plus, it would not have been guaranteed individual
arbitration under the 2002 DRP. This alternative futility
argument fails for two reasons.
First, as XBS acknowledges, regardless whether
arbitration were to be conducted individually or as a class, it
had a valid right to compel arbitration under the 2002 DRP.
To be sure, the differences between class arbitration and
individual arbitration are significant. See, e.g., AT&T
Mobility v. Concepcion, 131 S. Ct. 1740, 1751 (2011)
(“[T]he switch from bilateral to class arbitration sacrifices
the principal advantage of arbitration—its informality—and
makes the process slower, more costly, and more likely to
because of XBS’s own actions. The inconsistent actions that were
highlighted earlier in this opinion and scattered throughout the
procedural history of this case evinced XBS’s intentional relinquishment
of its known arbitration rights under the 2002 DRP as it sought its
judicial claim for relief. Had XBS wanted to preserve these arbitration
rights, XBS had an obligation to set the record straight by dispelling the
impression, created by its own inconsistent actions, that it was waiving
its 2002 DRP arbitration rights.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 55
generate procedural morass than final judgment.”).
However, it strains credulity to argue that the difference
between the two forms is vast enough to constitute
categorically different rights, such that XBS could avail
itself of a futility defense in this case. Whether individual or
class-wide, arbitration differs from court litigation in several
significant aspects, among which is the identity and nature
of the decision maker.
Second, and more fundamentally, XBS advances an
invalid argument as to why, under Lamps Plus, it is now
guaranteed individual arbitration under the 2002 DRP.
Before the district court, XBS argued that “it would have
been futile for XBS to move to compel individual arbitration
under agreements, like the pre-2012 agreements [i.e., the
2002 DRP], that were silent regarding class actions, until
the Supreme Court’s decision in Lamps Plus, 139 S. Ct.
1407, in 2019.” (emphasis added). And in its briefing to this
court, XBS again asserted that the 2002 DRP “did not
discuss class actions.” Lamps Plus, however, was not the
first to address arbitration contracts akin to the 2002 DRP
that were “silent regarding class actions.” That issue had
been resolved nearly a decade earlier in Stolt-Nielsen S.A. v.
AnimalFeeds Int’l Corp., 559 U.S. 662 (2010), which held
that class arbitration could not be compelled when the
underlying contract was silent as to class arbitration versus
individual arbitration. “[A] party may not be compelled
under the FAA to submit to class arbitration unless there is a
contractual basis for concluding that the party agreed to do
so. In [Stolt-Nielsen], however, the arbitration panel [had
incorrectly] imposed class arbitration even though the
parties concurred that they had reached ‘no agreement’ on
that issue.” Id. at 684. Lamps Plus addressed a separate
issue, “whether the FAA similarly bars an order requiring
56 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
class arbitration when an agreement is not silent, but rather
‘ambiguous’ about the availability of such arbitration.” 139
S. Ct. at 1412 (emphasis added). Accordingly, XBS cannot
rely on Lamps Plus as establishing any new law with respect
to arbitration agreements that are silent regarding class
arbitration, as that issue was decided nearly a decade earlier
by Stolt-Nielsen. 27
Altogether, it would not have been futile for XBS to
assert the 2002 DRP throughout the course of the litigation
below in the same manner as it did the 2012 DRP. Thus, we
decline to excuse XBS’s waiver-worthy litigation conduct as
being precipitated by futility.
27
The dissent takes issue with our conclusion that XBS’s reliance on
Lamps Plus does not support its futility argument because in the dissent’s
view, “the record shows that XBS sincerely believed” that Lamps Plus
changed the law. Dissent at 73. This argument cannot be credited. The
Supreme Court began its opinion in Stolt-Nielsen with the following
statement: “We granted certiorari in this case to decide whether imposing
class arbitration on parties whose arbitration clauses are ‘silent’ on that
issue is consistent with the Federal Arbitration Act (FAA).” 559 U.S. at
666 (emphasis added). That opinion proceeded to mention “silence” or
“silent” sixteen times throughout its analysis. After this decision,
nothing short of willful blindness could permit a party to hold a
“sincere[] belie[f]” that it would be forced into class-wide arbitration
because its arbitration contract was silent on the matter. As Hill filed the
first complaint in this case almost two years after this decision was
handed down, XBS had actual knowledge of the Stolt-Nielsen holding.
Therefore, XBS’s inconsistent behavior with respect to the 2002 DRP
constituted a knowing relinquishment of its arbitration rights. See
Gutierrez, 704 F.3d at 721–22 (rejecting a similar argument that it would
have been futile to move for arbitration until the Supreme Court decided
Concepcion because previous caselaw had protected the same right).
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 57
IV. CONCLUSION
For all the foregoing reasons, we affirm the district
court’s order denying Appellant’s motion to compel
arbitration under the 2002 DRP.
VANDYKE, Circuit Judge, dissenting:
This should not be a hard case. Under our precedents, a
defendant may waive a right to compel arbitration only by
intentionally relinquishing it. Fisher v. A.G. Becker Paribas,
Inc., 791 F.2d 691, 694 (9th Cir. 1986). That intention can
be express or implied. But for nearly four decades, this court
has refused to find implied waiver unless a defendant
completes concrete acts “inconsistent with the right to
arbitrate.” Newirth by & through Newirth v. Aegis Senior
Cmtys., LLC, 931 F.3d 935, 940 (9th Cir. 2019). A plaintiff
who seeks to prove inconsistent acts faces a heavy burden.
Fisher, 791 F.2d at 694.
XBS never took a single act inconsistent with its intent
to arbitrate the claims of its call-center employees who had
signed arbitration agreements. That fact alone should end
our analysis in this case. But there is more. XBS from an
early date advised named plaintiff Ms. Hill and the district
court of its intent to compel arbitration against those
employees should the putative class be defined to include
them. And during its extended litigation against Ms. Hill—
with whom it could not arbitrate, and therefore was required
to litigate—XBS took no action that uniquely targeted absent
class members and not Ms. Hill. And XBS moved to compel
arbitration against every class member with whom it had an
arbitration agreement on literally the first day after it could
58 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
do so.
The majority does not dispute those facts, but it avoids
the outcome they require by transforming our clear waiver
rule into an opaque forfeiture rule. Under this new rule, a
defendant loses its right to arbitrate against absent class
members unless it affirmatively asserts the right long before
it even knows who might be in the class, and even though it
has no right to arbitrate with the named plaintiff with whom
it is actually litigating. And even if a defendant nonetheless
speaks into the void that it someday plans to arbitrate against
some absent class members when that opportunity sometime
ripens, it still forfeits that right if any of its routine
precertification litigation activities against the named
plaintiff is later deemed to have an indirect effect on
potential class members with whom it has arbitration
agreements.
This break from precedent is premised on little more than
the majority’s misunderstanding of how much it may rely on
its own preferences and instincts instead of on concrete acts
to find waiver. The majority may feel XBS should have
given more explicit notice about its intentions to compel
arbitration against potential class members sooner than it
did. The majority also may feel that lack of such explicit
notice—which we’ve never required—unmasks XBS’s
clandestine intent not to arbitrate if and after a class was
certified. But precedent places no such burdens on
defendants and no stock in the majority’s preferences and
unconfirmed instincts. I therefore respectfully dissent.
I. DISCUSSION
Ms. Hill filed her initial complaint in April 2012,
purporting to represent a large class of current and former
XBS call-center employees. A question as to her adequacy
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 59
as a class representative quickly arose because she—unlike
most of the employees in that putative class—had never
signed an arbitration agreement. The district court did not
immediately answer that question, which delayed
certification of the class. But the clock was already ticking
on Ms. Hill’s individual claims. XBS threaded a needle for
the next two years, litigating issues that applied to Ms. Hill
while (1) providing to Ms. Hill and her counsel the 2002
arbitration agreement binding on many of the putative class
members, and (2) telling the district court and Ms. Hill that
it reserved its right to compel arbitration against members of
the potential future class who had signed arbitration
agreements.
In July 2014, the district court granted Ms. Hill’s motion
to certify the putative class. But even then, the court
declined to define that class while Ms. Hill and XBS battled
in state court over the certified question of whether Ms. Hill,
as an XBS call-center agent, was an hourly or piece-rate
worker. See Hill v. Xerox Bus. Servs., LLC, 868 F.3d 758,
763 (9th Cir. 2017) (certifying question); 426 P.3d 703, 708–
09 (Wash. 2018) (answering certified question); 771 F.
App’x 771, 772 (9th Cir. 2019) (affirming and remanding)
(mem). Five more years trickled through the hourglass
without XBS ever litigating an issue unrelated to Ms. Hill
particularly and her attempt to finally certify a class.
XBS’s slog through litigation against Ms. Hill reached a
crossroads in July 2019, when she moved the district court
to define the class to include signatories to the 2012 DRP.
Her request represented an abrupt about-face from her earlier
stipulation that those signatories were not members of the
putative class, and XBS immediately objected to her attempt
to smuggle thousands of new call-center employees into the
class at the eleventh hour. In the parties’ first joint status
60 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
report after Ms. Hill’s motion, XBS told her and the district
court that “[i]f individuals subject to arbitration agreements
are included in the class,” it anticipated “bringing motions to
compel individual arbitration once the class is finalized.”
XBS doubled down the following week, urging the district
court to “find that individual arbitration agreements preclude
class certification altogether” and thus decertify the class.
As it had since Ms. Hill first brought this case, XBS still took
no litigative action unrelated to Ms. Hill and her attempt to
certify the class.
When the district court later issued an order defining the
class to exclude the 2012 signatories, it did not mention the
2002 signatories. XBS worked with Ms. Hill to develop a
final list of class members for the purposes of notification,
but it reiterated to her counsel that it believed the 2002
signatories were subject to individual arbitration. The day
after the notice administrator reported a final list of class
members that included thousands of those signatories, XBS
moved to compel arbitration with them. No one disputes that
this was the earliest that XBS could have done so.
A. Legal Standard
An “examination of whether the right to compel
arbitration has been waived must be conducted in light of the
strong federal policy favoring enforcement of arbitration
agreements.” Fisher, 791 F.2d at 694. As such, the burden
is on the plaintiff to show that a defendant has waived its
right to compel arbitration. Id. She must demonstrate not
only the defendant’s “knowledge of an existing right to
compel arbitration,” but also the defendant’s “intentional
acts inconsistent with that existing right.” Newirth, 931 F.3d
at 940; see also Morgan v. Sundance, Inc., 142 S. Ct. 1708,
1713–14 (2022).
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 61
Some aspects of that second requirement are,
unfortunately, murky: “There is no concrete test to
determine whether a party has engaged in acts that are
inconsistent with its right to arbitrate,” and so we ask
whether “a party’s actions indicate a conscious decision to
seek judicial judgment on the merits of the arbitrable
claims.” Newirth, 931 F.3d at 941 (cleaned up). But at least
three things are clear. First, “a party acts inconsistently with
exercising the right to arbitrate when it (a) makes an
intentional decision not to move to compel arbitration and
(b) actively litigates the merits of a case for a prolonged
period of time in order to take advantage of being in court.”
Id. Second and inversely, “parties do not act inconsistently
with a right to compel arbitration when they engage in
litigation activities that do not evince a decision to take
advantage of the judicial forum.” Id. Third, litigation alone
does not evince waiver if it is not “a strategic decision to
‘actively litigate,’ i.e., to forgo the right to compel arbitration
and take advantage of a judicial forum.” Id. (cleaned up)
(quoting Britton v. Co-op Banking Grp., 916 F.2d 1405,
1413 (9th Cir. 1990)).
Those requirements, until today, have ensured that we
remember a key fact: “Waiver is different from forfeiture.”
United States v. Olano, 507 U.S. 725, 733 (1993). On the
one hand, waiver is the “intentional relinquishment or
abandonment of a known right,” id. (cleaned up), such that
it must be “affirmative and intentional,” Berkshire v. Dahl,
928 F.3d 520, 530 (6th Cir. 2019). On the other hand,
forfeiture can be inadvertent and often occurs due to a
“mistake or oversight,” United States v. Williams, 930 F.3d
44, 64 (2d Cir. 2019) (internal citation omitted), such as a
party’s “failure to make the timely assertion of a right,”
Berkshire, 928 F.3d at 530. To be sure, parties “can
62 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
impliedly waive a right.” Newirth, 931 F.3d at 942; see also
Van Ness Townhouses v. Mar Indus. Corp., 862 F.2d 754,
759 (9th Cir. 1988). But a right can be impliedly waived
only if “the parties’ actions amount to a knowing
relinquishment of that right.” Newirth, 931 F.3d at 942; see
also Van Ness Townhouses, 862 F.2d at 759.
B. Analysis
Applying this legal standard to the facts in this case, the
outcome is clear. XBS could have waived its right to compel
arbitration only if it took some concrete act suggesting it
intended to waive that right. More than a decade into
litigation, it still hasn’t taken any such act. Ergo, it did not
waive its right. No simpler syllogism ever echoed in
Aristotle’s Lyceum.
The majority does not really dispute the minor premise
of that syllogism, i.e., the nonexistence of any concrete act
that demonstrates waiver. Nor could it. But the majority
erases the major premise and scribbles a novel forfeiture rule
in its place. Under that new rule, a defendant forfeits its right
to compel arbitration not only if it engages in a concrete
inconsistent act, but also if a court conjectures from the
“totality of the circumstances” that the defendant secretly
intended to forfeit that right. Such a radical and unbounded
expansion of waiver finds no support in precedent, and in
any event fails here even on its own terms.
1. The Majority Offers No Evidence of Any
Concrete Act of Waiver.
There are special considerations for the waiver analysis
in class actions, and those considerations are at the heart of
my disagreement with the majority. In a simpler world in
which Ms. Hill herself was subject to an arbitration
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 63
agreement like the putative class members she sought to
represent, XBS could have (and presumably would have)
immediately moved to compel arbitration with her. If it
instead opted to litigate against her, we could reasonably
conclude that XBS had intentionally waived its right to
arbitrate her claims. But because Ms. Hill was not in fact
subject to any arbitration agreement with XBS, XBS could
not compel her to arbitrate her claims or class certification
issues. Nor could XBS move to compel arbitration against
putative class members who had signed arbitration
agreements until after the class was finally certified and its
members identified. Meanwhile, XBS needed to determine
whether Ms. Hill’s individual claims could survive a motion
to dismiss or a motion for summary judgment. And XBS
disagreed that her class claims satisfied all Rule 23 criteria.
Possessing no contractual right to arbitrate any of those
issues, XBS had to litigate them in court.
It is black-letter law that, until the class was finally
certified and notice given, none of the absent putative class
members were actually parties to the litigation between Ms.
Hill and XBS. See Smith v. Bayer Corp., 564 U.S. 299, 313
(2011) (rejecting “the novel and surely erroneous argument
that a nonnamed class member is a party to the class-action
litigation before the class is certified” (internal quotation
marks and citation omitted)). Presumably because of this,
XBS limited its precertification litigation to issues related to
Ms. Hill and her attempt to certify a class. Time and again
and without exception, XBS restricted its answers,
discovery, motion for summary judgment—everything—to
issues related to Ms. Hill’s personal claims and her proposed
class’s alleged inadequacies under Rule 23.
This tailoring of XBS’s litigation activity was no doubt
informed by a bright-line distinction well-understood until
64 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
smudged today. Waiver analysis in a case like this involving
a named plaintiff who did not sign an arbitration agreement
requires a court to distinguish between a defendant who (1)
actively litigates against someone with whom the defendant
has no right to arbitrate or against class certification
generally, from one who (2) attempts to actively litigate
against someone with whom the defendant does have a right
to arbitrate. Only the latter defendant can be said to have
acted consistent with an intent to waive its right to arbitrate.
In contrast, a defendant sued by a named plaintiff seeking to
certify a class and who defends the lawsuit in court before
the class is certified, cannot be said to be making an
“intentional decision” to “take advantage of being in court”
when that defendant is powerless to force the named plaintiff
to arbitrate either her own claims or class certification.
Newirth, 931 F.3d at 941. That’s because the defendant has
no choice but to defend against the named plaintiff’s claims
in court. Likewise, when the same defendant fights against
class certification in court it cannot be said to be taking
advantage of litigating in the judicial forum because it has
no option to do otherwise; it cannot force the named plaintiff
to arbitrate the question of class certification.
It is against that background understanding that we
should evaluate whether XBS did anything to evince an
intention to litigate specifically against the 2002 signatories.
The majority says it did, pointing to three “acts” in this case
that together purportedly expose XBS’s covert intent to
waive its right to compel arbitration against those specific
class members. First, XBS supposedly moved for partial
summary judgment on the issue of “whether unnamed class
members subject to XBS’s ABC Pay scheme were
‘piecemeal’ workers” under Washington’s Minimum Wage
Act. Second, XBS requested “extensive discovery on
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 65
unnamed parties to the case,” which “necessarily included
signatories to the 2002 DRP.” Third, XBS many times
“asserted as a ground for obligatory arbitration the 2012
DRP without also asserting the same for the 2002 DRP.” I
will discuss each in turn.
a. XBS’s motion for summary judgment
The majority’s first purported “act” cannot prove XBS’s
intent to waive for the simple reason that it never happened.
The majority portrays XBS’s summary judgment motion as
directed at “unnamed class members.” But the motion
nowhere mentions “unnamed class members,” and even a
quick reading makes clear that, as one might expect, the
motion addressed Ms. Hill and her claims.
While the majority can’t show that XBS’s motion for
summary judgment actually addressed absent class
members, what it instead relies on is that a grant of summary
judgment against Ms. Hill could have indirectly affected the
claims of the putative class members she purported to
represent. Sure. That will usually be the case when litigating
against a named plaintiff of a putative class action. But
indirect downstream effects are not the same as active
litigation against the class members or their claims. XBS’s
motion was entirely consistent with the fact that it was
actively defending itself against Ms. Hill’s claims. By
moving for summary judgment and making the arguments it
made, XBS did nothing different than what it would have
done if Ms. Hill had brought an individual action for her own
claims instead of a putative class action. XBS had little
choice but to seek summary judgment against Ms. Hill at that
stage of the case, and the fact that it did so shows only that
it was actively litigating against her, not against the then-
66 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
uncertified class. 1
1
A careful reader might be confused by how the majority and I
differently use the concept of whom the litigation was “directed at.” I
use the concept to refer to whomever XBS’s litigation conduct was
aimed at as a legal matter. Thus, for example, when XBS made
arguments in support of its motion for summary judgment against Ms.
Hill, I consider those arguments as directed at Ms. Hill, not at absent
class members. It would have been strange indeed had XBS made
arguments directed against absent class members in support of its
summary judgment motion, since those class members were not parties
to the case.
Only once does the majority claim XBS did anything like that—
directed its arguments against class members to the exclusion of Ms.
Hill—and the majority is simply wrong. It selectively quotes one of
XBS’s summary judgment briefs before the district court, claiming XBS
therein contested a claim “raised by ‘class counsel’” but “‘not advanced
by Hill.’” But contrary to the majority’s suggestion, XBS never
attempted to direct any argument against the absent class members and
not Ms. Hill. Instead, in the passage referenced by the majority XBS
merely highlighted that Ms. Hill in her deposition had disavowed any
independent knowledge of a claim that her counsel had raised in her
answers to interrogatories. XBS never said it was contesting a claim
related only to the class and not to Ms. Hill.
Instead, the key difference between the majority opinion and this
dissent is that the former generally appears to embrace what might be
called the “ricochet” view of targeting, ignoring whomever XBS’s legal
arguments were technically directed at, and looking instead to whomever
the majority thinks XBS may have sub rosa hoped could be indirectly
affected by its legal arguments if they were successful against Ms. Hill.
Under the majority’s view, a defendant such as XBS apparently targets
class members against whom it cannot yet litigate when it trains its sights
on a named plaintiff such as Ms. Hill, directing its arguments against her
as a legal matter, but with the surreptitious hope of also indirectly
affecting the absent class members’ claims. That is, a defendant can
target a hypothetical future class member—at least for waiver
purposes—even when as a legal matter its litigation activity is directed
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 67
Notably, XBS’s summary judgment motion is the only
example of active litigation the majority references. So even
if moving for summary judgment against Ms. Hill somehow
also counted as “active litigation” against the uncertified
class (which it should not), this single “act” would not come
close to the “prolonged” litigation that we have required in
other cases to find waiver. Newirth, 931 F.3d at 941. For
example, in Van Ness Townhouses, which the majority views
as “instructive,” the defendants made a “conscious decision”
to waive arbitration by “answer[ing] the complaints and
amended complaints, … mov[ing] to dismiss the action,”
“approving a pre-trial conference order,” and allowing the
district court to set a trial date, all without ever “rais[ing] the
issue of arbitration.” 862 F.2d at 756, 759. Importantly, the
defendants in Van Ness Townhouses did all this while they
“had an existing right to compel arbitration”; indeed, we
explained that had the defendants “moved to compel
arbitration” at any point, “the district court would have been
required to grant that motion.” Id. at 759. Here, it is
undisputed that XBS had no such right in litigating against
Ms. Hill. Ever.
The distinctions are even starker in other cases. In
Martin v. Yasuda, for example, we found waiver only after,
inter alia, the defendants “devoted considerable time and
effort to a joint stipulation structuring the litigation, filed a
motion to dismiss on a key merits issue, entered into a
protective order, answered discovery, and prepared for and
only at a named plaintiff with whom it has no arbitration agreement. This
expansive view of who precertification litigation is directed against does
most of the work for the majority, since in every inchoate class action
the defendant’s precertification litigation against the named plaintiff will
inevitably have some possible indirect effect on then-absent putative
class members.
68 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
conducted a deposition.” 829 F.3d 1118, 1126 (9th Cir.
2016) (cleaned up). Again, all while the right to compel
arbitration was just sitting there available but unexercised.
And significantly, the defendants in Martin also “told the
district judge and opposing counsel that they were likely
‘better off’” litigating the case in court “than handling it in
arbitration,” and were even “warned … about the possibility
of waiver.” Id. at 1122, 1126. Nothing of the sort remotely
happened here. The majority treats XBS as though it
actively litigated against the class for years, when in fact the
majority can point to only one example of active litigation—
that was not even against the class.
b. XBS’s “extensive” precertification discovery
The majority’s second purported “act” is, like the first,
premised on a mistaken understanding of the record. Ms.
Hill described XBS’s discovery requests as “extensive.”
The majority repeats her characterization verbatim, claiming
that XBS “sought to take advantage of litigation in federal
court by requesting extensive discovery.” But XBS’s
discovery requests consisted of only a handful of
interrogatories and requests for production, as well as a
grand total of two depositions. That’s it. Notably, XBS’s
interrogatories and requests for production were never
served on any putative class member. It is a stretch to call
this “extensive” discovery, particularly given the breadth of
Ms. Hill’s claims and the size of the class she sought to
represent.
But putting that aside, the amount of class discovery
sought by XBS should be entirely irrelevant to the court’s
analysis under our test for waiver. To be consistent with
precedent, we must focus on inconsistency. And an act is
“inconsistent” with preserving the right to arbitrate only if a
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 69
defendant is litigating something that it could have arbitrated
instead. See Black’s Law Dictionary 915 (Bryan A. Garner
ed., 11th ed., 2019); Webster’s Third New Int’l Dictionary
1144 (1986). Nothing in the discovery XBS sought—or in
the documents and answers Ms. Hill provided in response—
can fairly be understood to have created such
incompatibility.
It is the norm in class litigation for a defendant like XBS
to conduct such precertification discovery. See, e.g., Vinole
v. Countrywide Home Loans, Inc., 571 F.3d 935, 942 (9th
Cir. 2009) (“Our cases stand for the unremarkable
proposition that often the pleadings alone will not resolve the
question of class certification and that some discovery will
be warranted.”); 1 McLaughlin on Class Actions § 3:7 (19th
ed. Nov. 2022) (explaining that “in most cases discovery into
issues relevant to class certification is warranted and
appropriate” and that “it is ordinarily an abuse of discretion
to deny any class certification discovery”). In fact, Rule 23
of the Federal Rules of Civil Procedure was amended two
decades ago for the express purpose of accommodating
precertification discovery like that which XBS requested. 2
Such precertification discovery is par for the course in
class action litigation precisely because such class discovery
is expected to “illuminate” class certification issues. Class
discovery is not expected to determine or exhaust merits
issues unique to the absent class members, even if there can
2
See Report of the Judicial Conference Committee on Rules of Practice
and Procedure 10 (Sept. 2002) (available at https://www.uscourts.gov/si
tes/default/files/fr_import/ST9-2002.pdf) (explaining that Federal Rule
of Civil Procedure 23(c)(1)(A) was amended to clarify that “[a] certain
amount of [precertification] discovery may be appropriate … to
illuminate issues bearing on certification”).
70 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
be some overlap. This case is no exception. In fact, early
on, the district court ordered that “[u]ntil the issue of
certification is resolved, discovery is limited to class
certification issues.” If requesting discovery about class
issues at the class certification stage—which happens in
essentially every putative class action—is now to be treated
as proof of a defendant’s secret intent to waive the right to
compel arbitration, we should just be more forthright and
explain that defendants must assert their intent to compel
arbitration against uncertified class members by some
specific deadline during or before class certification
proceedings. If we did that, it would be more obvious that
the majority’s supposed intentional waiver conclusion is
really a disguised accidental forfeiture deadline. But at least
it would be a clear rule parties could use to guide their
behavior, instead of leaving them to guess how much
precertification litigation against the named plaintiff,
together with run-of-the-mill class discovery, will result in
the “waiver” of merits defenses available only against the
class. 3
Unlike the majority, I would conclude that parties should
be allowed to engage in normal precertification class
discovery without fear of waiving any right to compel
arbitration. By repackaging XBS’s class certification-stage
discovery requests as proof of intentional waiver of a merits
issue, the majority creates both a new rule and unnecessary
uncertainty. And as with its treatment of XBS’s necessary
3
Because the majority declines to adopt a bright-line rule today, no class-
action defendant within this circuit can know for sure when a district
court might find that precertification litigation has proceeded long
enough for the judge to deem him or her to have waived a right to compel
arbitration. That line will differ judge by judge, court by court, and case
by case.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 71
litigation against Ms. Hill, this feels like an unwinnable
Catch-22 for defendants like XBS.
Perhaps recognizing the unfairness of a general “waiver-
if-you-seek-class-discovery” rule, the majority claims that
“[i]t is clear from the record that XBS explicitly sought
extensive discovery as to 2002 DRP signatories.” This is
both legally irrelevant and untrue. Neither the 2002 DRP
nor its signatories are mentioned in any of XBS’s
interrogatories or requests for production, and the majority
does not point to a single request that “explicitly” references
either. This is because XBS’s requests referenced “Putative
Class members” generally. And while this of course
“necessarily included” information relating to 2002
signatories—in the sense that general class discovery
“necessarily included” every putative class member—this is
neither surprising nor “clear” proof that “XBS explicitly
sought extensive discovery on 2002 DRP signatories”
independent of the limited discovery about the proposed
class generally. Rather, as with the majority’s other “acts,”
it is simply the natural byproduct of XBS defending itself
against Ms. Hill, who purported to represent those same
signatories, and her attempts to certify a class that included
them.
c. XBS’s different treatment of the 2002 and 2012
DRPs
The majority’s third purported “act” showing XBS’s
intent to waive its arbitration right is XBS’s more frequent
mention of the 2012 DRP than of the 2002 DRP during
72 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
precertification proceedings. 4 That trivia is irrelevant to our
analysis because XBS was not required to raise that defense
against either subset prior to certification. So the
comparison between how much XBS relied on the 2012
DRP versus the 2002 DRP while opposing class certification
is a red herring. It shows that XBS could have discussed the
2002 DRP more. But it says nothing about whether XBS
needed to do so to avoid waiver (or, more accurately,
forfeiture). 5
Even sidelining the majority’s confusion between what
XBS did with what it was required to do, its criticism also
presumes the 2002 and 2012 DRPs are identical with respect
to class certification. But the two are “very different.” Ms.
Hill’s counsel admitted as much during oral argument, and
the majority’s protestations to the contrary are unconvincing.
The majority acknowledges, for example, that the 2012
4
Notably, XBS had no reason to raise either the 2002 DRP or the 2012
DRP in defending against Ms. Hill’s claims. The agreements were
entirely irrelevant because Ms. Hill never agreed to them. See Norcia v.
Samsung Telecomms. Am., LLC, 845 F.3d 1279, 1283 (9th Cir. 2017)
(“‘[A]rbitration is a matter of contract and a party cannot be required to
submit to arbitration any dispute which he has not agreed so to submit.’”
(quoting AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643,
648 (1986))).
5
The majority’s emphasis on the fact that XBS relied more on the 2012
DRP when it made class certification arguments might be taken as an
equal treatment rule. That is to say, while a class action defendant is not
required to raise arbitration agreements during class proceedings to avoid
later waiver, if it raises one such agreement, it must raise them all. If
that is what the majority means, it is not clear where this novel rule
comes from, and it will be very confusing for class-action litigants and
lower courts to apply. Particularly where, as here, the various
agreements are different and arguably had different implications for class
certification.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 73
DRP “expressly barred class-wide litigation of any claims,”
whereas the 2002 DRP did not. In fact, the 2002 DRP is
silent with respect to class actions or class-wide arbitration.
This distinction is significant because XBS believed, and
continues to argue, that the 2002 DRP’s lack of a class-
action waiver limited its usefulness in arguing against class
treatment of those signatories’ claims before the Supreme
Court’s decision in Lamps Plus, Inc. v. Varela, 139 S. Ct.
1407 (2019). The majority apparently disagrees with that
assessment, but the record shows that XBS sincerely
believed it to be correct. 6 And XBS’s belief that the 2002
DRP was less relevant as an argument against class
certification, even if mistaken, cannot “amount to a knowing
6
The majority insists that XBS could not really have believed this during
the years between Stolt-Nielsen and Lamps Plus, because the Supreme
Court in Stolt-Nielsen was clear enough that there was no right to class
arbitration hiding in the shadows of silent contract provisions. I don’t
disagree with the majority’s reading of Stolt-Nielsen—especially
looking back on it from the vantage point of Lamps Plus. But the
majority overlooks a phenomenon unfortunately experienced too often
by those who practice regularly before our court, which is that
sometimes notwithstanding the Supreme Court’s clarity, the Ninth
Circuit somehow garbles the reception.
A few circuits bristled at being bridled by Stolt-Nielsen and resisted
applying its holding by construing its language narrowly and inventing
distinctions to cabin it. E.g., Jock v. Sterling Jewelers Inc., 646 F.3d 113,
120–21 (2d Cir. 2011). Our circuit was part of that resistance, engaging
in sporadic but “palpable evasion of Stolt-Nielsen” up to the day the
Court reversed us in Lamps Plus. Varela v. Lamps Plus, 701 F. App’x
670, 673 (9th Cir. 2017) (Fernandez, J., dissenting), rev’d, 139 S. Ct.
1407 (2019). Indeed, the Supreme Court took up Lamps Plus precisely
because it needed to clamp down on the waywardness of our court. It is
more than a little unfair for the majority to accuse XBS of “willful
blindness,” when that label might more accurately apply to our own
court’s treatment of Stolt-Nielsen until Lamps Plus.
74 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
relinquishment of th[e] right” to later compel arbitration.
Newirth, 931 F.3d at 942 (emphasis added). 7
In any event, XBS raised the 2002 DRP in defending
against Ms. Hill and class certification more than a dozen
times over a period of eight years, including: in its answers
to her original and amended complaints; in response to her
discovery requests; in various communications with her
counsel; in a draft and final Joint Status Report shared with
her counsel and submitted to the district court; in response
to her motion to define the scope of the class; 8 in a
declaration supporting the parties’ stipulated motion to
approve class notice; and in the notice sent to putative class
members.
In short, XBS was not required to make certain class
arguments in opposing class certification to avoid losing its
ability to compel arbitration once that right ripened. But
even if it had been required to do so, XBS repeatedly raised
the 2002 DRP with Ms. Hill’s counsel and the district court.
And while XBS did not mention the 2002 DRP as much as
it did the 2012 DRP, this does not show that XBS made a
“conscious decision” to intentionally waive its right to
compel arbitration under the 2002 DRP. Id. at 941. Rather,
any difference in treatment is legally irrelevant and, in any
7
I want to be clear: moving to compel arbitration before XBS did so
would have been futile regardless of Lamps Plus. See Newirth, 931 F.3d
at 942; Letizia v. Prudential Bache Secs., Inc., 802 F.2d 1185, 1187 (9th
Cir. 1986). I mention Lamps Plus merely to provide one reasonable
explanation for why XBS may have treated the 2002 DRP differently
than the 2012 DRP for class certification purposes.
8
Although XBS explicitly raised the 2002 DRP with the district court in
arguing against class certification, the district court ignored its argument
and focused instead only on its arguments concerning the 2012 DRP.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 75
event, explained by material distinctions in the content of the
agreements.
* * *
So to summarize: none of the three purported “acts” of
XBS the majority points to supports a conclusion of waiver
because each “act” intentionally related to Ms. Hill, with
whom XBS had no right to arbitrate. Each of the “acts” the
majority relies on took place well before class members
became parties to this case, at a time when XBS was
litigating against only Ms. Hill, who never agreed to arbitrate
her claims. To be sure, Ms. Hill sought class certification in
her initial complaint, but “a class action, when filed, includes
only the claims of the named plaintiff.” Moser v. Benefytt,
Inc., 8 F.4th 872, 877 (9th Cir. 2021) (internal quotation
marks omitted).
The majority overlooks this critical fact, treating XBS’s
acts of defending against Ms. Hill’s claims as though they
were directed at the class. They were not. Her claims are
distinct from theirs, and XBS’s acts of litigation against her
were distinct as well. Indeed, it was impossible for XBS to
litigate against the class until the class was finally certified
and given notice.
2. The Majority’s New Forfeiture Rule Fails Even
on Its Own Terms.
While pointing to the above three “acts” as faintly
signaling XBS’s intent to waive its arbitration right, the
majority also appears to concede that each of these acts—
indeed, all of XBS’s litigation activities—considered
individually was so “seemingly commonplace” that it could
not reasonably be considered “an express disavowal of
arbitral forums.” But that does not deter the majority,
76 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
because the real engine for its conclusion in this case is its
leverage of the totality-of-the-circumstances test our court
articulated in Newirth. 9 Refashioning that test into a catchall
for whatever instincts members of a court might have, the
majority intuits that XBS must have intended to waive its
right to compel arbitration. It squints at the record until it
sees such intent lurking in the background of all of XBS’s
litigation activities considered in toto. But as is often true,
squinting too hard here distorts the view.
The majority points decisively to the amount of time that
elapsed between the day Ms. Hill filed her complaint and
XBS moved to compel arbitration, treating that as ironclad
evidence that, all things considered, XBS implicitly yet
9
Contrary to the majority’s suggestions, I do not deny the validity of the
actual totality-of-the-circumstances test that Newirth and its progeny lay
out. I object only to the majority’s stretching of that test beyond what
fidelity to precedent and reason can brook, such that going forward a
panel no longer need anchor its conclusions in anything concrete. As the
majority effectively redefines the test today, a panel may invoke the
“totality of the circumstances” to conclude that zero evidence of
intentional waiver plus zero evidence of intentional waiver equals ample
evidence of waiver. Apparently, there can be a forest even where there
are no trees.
But my deeper and primary concern is that reliance on that standard
should not supplant the more fundamental rule that waiver must always
be intentional. As with application of multifactor balancing tests, courts
depending on the totality of the circumstances should always be cautious
to avoid effectively saying to litigants and the public: “just trust us, we
know waiver when we see it.” That concern is heightened where, as
here, the defendant’s intentionality is the touchstone of analysis. For all
the same reasons that waiver requires intentional conduct to begin with,
we should be loath to divine such intentionality by relying on some
inscrutable standard that simply declares the whole to be greater than the
sum of its parts.
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 77
intentionally waived its right to arbitrate. But nothing in our
caselaw even suggests that how long a case lingers in its
precertification phase is relevant to the analysis of waiver,
let alone that it disposes of the question entirely. And by all
accounts this is an odd case to use as a vehicle for creating
such a new rule, as XBS moved to compel the very first day
it could do so, i.e., the day after the notice administrator
reported a final list of class members that included
signatories to the 2002 DRP.
The majority also relies heavily on its view that XBS
likely knew that some of its litigation activities against Ms.
Hill could have derivative effects on members of the yet
undefined class. As already explained, that rationale is
deeply flawed. The well-established test is whether the
defendant took any actions inconsistent with the right to
arbitrate. Litigating against someone with whom you have
no right to arbitrate (such as Ms. Hill), or litigating issues
that you have no right to arbitrate (such as the class
certification issues in this case), is not inconsistent with a
right to arbitrate.
And until today, nothing in our waiver precedents
suggested our clear and administrable “inconsistent-with-
the-right-to-arbitrate” standard somehow changes by the
mere fact that a defendant’s non-arbitrable litigation
activities might have foreseeable collateral consequences for
possible arbitration with others. It will usually be that case
that some (perhaps many) litigation arguments against a
named plaintiff will be similarly relevant to the possible
future claims of some members of the putative class. That
does not mean the defendant is making those arguments
against the absent class members. It is, in fact, impossible
for the defendant to do that before the class is finally
certified, because those absent class members are not
78 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
actually parties to the litigation. See Bayer Corp., 564 U.S.
at 313.
Instead of applying this well-established rule, the
majority substitutes its intuition that, sure, XBS may have
been actually litigating against Ms. Hill, but in its craven
heart it was really going after the absent class members. I
would stick to what XBS actually did and the actual legal
import of its actions, not attempt to divine any motives it
possibly had. And even if the majority’s mind-reading was
correct, such prescience by a class defendant is hardly
nefarious. It simply does not matter whether XBS knew its
litigation activities against Ms. Hill could also possibly
affect then-absent class members. We should not penalize
XBS just because its counsel were not so dull as to fail to
foresee possible fortuitous collateral consequences of
making certain arguments in litigating against Ms. Hill. We
should penalize XBS only if it took actions that were
actually inconsistent with a right to arbitrate. And none of
the litigation actions against Ms. Hill were, because XBS
had no right to arbitrate with her.
The majority seems to relatedly argue that it was the
cumulative impact that XBS’s litigation activities against
Ms. Hill might have on future class members that implies
XBS intended to waive its arbitration rights. For example,
the majority highlights that XBS asked the district court to
resolve its partial summary judgment motion before
resolving the issue of class certification to “‘obviate the need
for certification.’” Such a request is common enough
because it usually would be inefficient to litigate all the class
certification issues only to have the case later resolved on
summary judgment. Yet the majority has a hunch that, in
this case, XBS wasn’t really motivated by efficiency; that
the request was just a ruse to resolve all issues related to the
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 79
2002 signatories in court. Because there is no text in the
summary judgment motion that makes that interpretation
necessary, the majority invokes context even while
providing none. “XBS may have nominally been litigating
against Hill at the time,” the majority admits. “But its
strategic approach to the impending class certification
reveals that XBS knowingly argued about the merits of all
class members’ claims, whether arbitrable or not, for the
express purpose of obtaining a judicial order that would
foreclose all class claims.” The majority regrettably fails to
provide any reasoning or citation to support this intuition.
But more importantly, it ultimately does not matter
whether its intuition is right or wrong. It may or may not be
true, as the majority says, that XBS’s success in litigating
various issues against Ms. Hill would have tolled a “death
knell” for absent class members’ claims. Whatever validity
an argument rooted in second-order death knells might have
in poetry, it rings hollow in this court’s legal analysis of
waiver, even under the totality-of-the-circumstances
standard. 10 The test our court has applied until today has
been whether a defendant acted inconsistently with an intent
to arbitrate, not whether a Rube Goldberg machine exists
whereby a hypothetical absent class member hypothetically
might indirectly suffer a disadvantage in hypothetical future
arbitration as a result of a class defendant’s non-
discretionary litigation activities against an entirely different
party.
Compare John Donne, Meditation 17, in Sermons on the Psalms and
10
Gospels 243 (Evelyn M. Simpson ed., 1963) (“[N]ever send to know for
whom the bell tolls; it tolls for thee.”), with Newirth, 931 F.3d at 941.
80 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
3. The Majority’s Strawmen
I suppose I should be flattered by the majority’s lengthy
response to this dissent, sometimes in footnotes that span
multiple pages. If only “the sweet breath of flattery
conquer[ed] strife.” William Shakespeare, The Comedy of
Errors act 3, sc. 1, l. 28. But alas not in this instance,
because in defending its own position the majority
repeatedly misrepresents mine, devastating a virtual army of
strawmen. In light of the difficult argument the majority
labors to make, the impulse to paint the contrary position as
extreme is understandable. But it is important, I believe, to
be as clear as possible about the differences between our
positions—which includes, of course, what we don’t
disagree about. I have already clarified a few such
misunderstandings. Two more merit brief correction.
First, the majority claims I disagree that a defendant may
impliedly waive a right to compel arbitration, insisting that I
argue “only direct evidence of waiver through an express
disdain of the right to arbitrate can constitute acts
inconsistent with that right.” That’s an obvious distortion of
my position, as should be clear enough from the very first
paragraph of this dissent. I agree with Newirth that the right
to arbitrate can be impliedly waived; I disagree with the
majority’s creative reimagining of how that can happen.
Second, the majority charges me with embracing the
suspect principle “that a party needs to have present
authority to vindicate” its right to compel arbitration in order
“to be able to take actions inconsistent with” that right, and
then expatiates across multiple pages why that’s wrong. I
take no such position. My argument is not that a defendant
cannot waive its right to compel arbitration before that right
has ripened. A defendant obviously could do so. But the
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 81
majority can point to no evidence—and there is none—that
XBS in fact demonstrated even the slightest real intent to
waive its right to compel arbitration at any point in this case.
II. CONCLUSION
Federal policy favors enforcement of arbitration
agreements, and this court has long held that a defendant
who possessed a right to compel arbitration can impliedly
waive that right only if it acts in ways inconsistent with it.
Newirth, 931 F.3d at 940. The majority today crowbars that
narrow exception into a yawning new forfeiture rule with
little in the way of a guiding principle other than a court’s
inscrutable gut instincts about a class defendant’s hidden
motives.
And all just to reward a named plaintiff and her counsel
who knew since the infancy of this case that most of the class
she purported to represent had arbitration agreements that, if
properly enforced, could result in those class members being
removed from her lawsuit. The majority strangely concludes
that XBS rather than Ms. Hill and her counsel “l[aid] in the
weeds” with respect to the 2002 arbitration agreement. I
perceive quite differently who laid in the weeds.
First, this colorful metaphor implies stealth. But if XBS
was trying to hide the 2002 arbitration agreement from Ms.
Hill and her class counsel, it did a terrible job. It provided
the 2002 DRP to Ms. Hill in response to her discovery
requests back in 2013, shortly after she sued XBS and nearly
seven years before the class was finally identified and XBS
could move to compel arbitration against the 2002
signatories. So Ms. Hill and her counsel were fully aware of
the 2002 DRP. And as explained, XBS continued to
occasionally refer to the 2002 DRP with both Ms. Hill and
the district court as it litigated class certification issues.
82 TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC
That’s about as sneaky as a toddler playing hide-and-seek.
Second, the metaphor implies the ambusher seeks some
advantage by remaining silent. But I can conceive of no
advantage XBS might have expected by not explicitly
asserting its right to later arbitrate once that right ripened,
and the majority offers none. Or, for that matter, what
advantage XBS could expect by not mentioning the 2002
DRP more often in opposing class certification. If anyone
stood to gain a tactical advantage by intentionally ignoring
the 2002 DRP it was Ms. Hill, because it forced XBS into a
dilemma in the early stages of litigation. Either XBS would
need to raise every imaginable merits defense against a class
not yet defined even if those defenses were irrelevant and
futile with respect to the only party then in the case—Ms.
Hill—or else it would need to accept a nonzero risk that Ms.
Hill could later beguile a court into thinking those defenses
had been forfeited. The majority’s result today does much
to encourage such gamesmanship in the future by rewarding
Ms. Hill and punishing XBS.
Trying to make a similar point through another familiar
metaphor, the majority sternly insists that it “will not reward
XBS’s attempt to take a second bite from the apple” by
permitting it to compel arbitration when there is a “strong
inference that XBS wanted a judicial resolution on the
merits.” Although variations of this argument bob up
repeatedly in the majority opinion, this metaphor also
quickly goes to seed, primarily because XBS never took a
first bite at any absent class member’s apple: XBS never
litigated any issue against absent class members, as opposed
to Ms. Hill.
But the majority’s do-over concern falls flat however
you slice it. Even indulging the majority’s fiction that XBS
TIFFANY HILL V. XEROX BUSINESS SERVICES, LLC 83
was actually litigating against the class when it was really
litigating against Ms. Hill, there still would only be one bite
of the apple. The example the majority references—
litigation over whether Ms. Hill was a piece-rate worker—
drives home the point. Once that question was certified to
the Washington Supreme Court in the litigation with Ms.
Hill and authoritatively answered, it was not going to be
“relitigated” by XBS against anyone, including absent class
members. Whatever the Washington Supreme Court ruled
on the piece-rate question would obviously be authoritative
and binding precedent, including in any later arbitrations.
Here again, the majority justifies its unwarranted extension
of waiver by reference to a concern that, upon closer
inspection, collapses.
* * *
The majority today imposes a new duty on defendants to
make certain arguments against class certification at that
stage of the case or otherwise lose the ability to later compel
arbitration once the right to do so matures. The majority
characterizes this as waiver, but it is more accurately
understood as a new forfeiture rule. XBS did nothing in this
case to evince that it affirmatively intended to waive its right
to arbitrate—it merely litigated against the named plaintiff
Ms. Hill and opposed her attempt to certify a class. That
should not be enough to intentionally waive a merits defense
wholly inapplicable to the named plaintiff, so I must
respectfully dissent.