Petition for Writ of Certiorari — Morgenthau Venture Partners, LLC, et al., Petitioners v. Robert A. Kimmel

No. ________

IN THE

Supreme Court of the United States

MORGENTHAU VENTURE PARTNERS, L.L.C.,

and MORGENTHAU ACCELERATOR FUND, L.P.,

Petitioners,

v.

ROBERT A. KIMMEL,

Respondent.

On Petition for a Writ of Certiorari to the

Florida Fourth District Court of Appeal

PETITION FOR A WRIT OF CERTIORARI

PETER W. HOMER

Counsel of record

CHRISTOPHER KING

HOMER BONNER JACOBS

1200 Four Seasons Tower

1441 Brickell Avenue

Miami, Florida 33131

(305) 350-5100

phomer@homerbonner.com

cking@homerbonner.com

Attorneys for Petitioners

i

QUESTIONS PRESENTED

1) Whether the Florida court of appeal’s one-word

refusal to compel arbitration disregards this Court’s

decision in KPMG LLP v. Cocchi, 565 U.S. 18 (2011)

that a blanket order denying arbitration without

addressing the arbitrability of all claims violates the

Federal Arbitration Act (“FAA”).

2) Whether waiver defenses to a motion to compel

arbitration under the FAA require a showing of

prejudice.

ii

PARTIES TO THE PROCEEDING AND RULE

29.6 STATEMENT

The parties to the proceeding below are,

Robert

A.

Kimmel,

Respondent on Review;

Plaintiff-Appellee,

Morgenthau

Venture

Partners,

L.L.C.,

Defendant-Appellant, Petitioner on Review; and

Morgenthau Accelerator Fund, L.P., DefendantAppellant, Petitioner on Review.

No parent corporation or any publicly held

company owns 10% or more of Morgenthau Venture

Partners, L.L.C., or Morgenthau Accelerator Fund,

L.P. stock.

iii

TABLE OF CONTENTS

QUESTIONS PRESENTED ........................................ i

PARTIES TO THE PROCEEDING AND RULE 29.6

STATEMENT ......................................................... ii

TABLE OF CONTENTS ............................................ iii

TABLE OF AUTHORITIES ....................................... v

PETITION FOR A WRIT OF CERTIORARI ............. 1

OPINIONS BELOW ................................................... 1

JURISDICTION.......................................................... 1

STATUTORY PROVISION INVOLVED ................... 2

INTRODUCTION ....................................................... 2

STATEMENT OF THE CASE.................................... 5

A. FAA background, and the Circuit split over

waiver. ............................................................... 5

B. Factual and Procedural Background................ 9

REASONS FOR GRANTING THE PETITION ....... 11

I.

The Fourth DCA flagrantly violated this

Court’s decision in Cocchi and the FAA. ........ 11

II. The Circuits are in conflict, as are the States,

over whether the FAA requires a showing of

prejudice to prove waiver. ............................... 16

A. The Circuits have splintered over the

requirements for waiver. ............................. 17

B. The decision below is wrong, as not requiring

prejudice conflicts with the FAA’s goals. .... 21

CONCLUSION.......................................................... 29

APPENDIX A—Fourth District Court of Appeal

Opinion (September 27, 2018).............................. 1a

iv

APPENDIX B—Trial court Order denying

arbitration (March 2, 2018) .................................. 3a

APPENDIX C— Fourth District Court of Appeal

Order Denying Motion for Rehearing and

Rehearing En Banc (November 2, 2018) ............. 5a

v

TABLE OF AUTHORITIES

Cases

Action Drug Co. v. R. Baylin Co.,

Civil Action 9383, 1989 WL 69394 (Del. Ch. June

19, 1989) ................................................................... 8

AT&T Mobility LLC v. Concepcion,

563 U.S. 333 (2011).........................................passim

Buckeye Check Cashing, Inc. v. Cardegna,

546 U.S. 440 (2006)...................................... 5, 12, 24

Cabinetree of Wisconsin, Inc. v. Kraftmaid Cabinetry,

Inc.,

50 F.3d 388 (7th Cir. 1995) ............................passim

Cargill Ferrous Intern. v. Sea Phoenix MV,

325 F.3d 695 (5th Cir. 2003) ............................. 8, 17

Collado v. J. & G. Transp., Inc.,

820 F.3d 1256 (11th Cir. 2016) ............................. 13

Dean Witter Reynolds, Inc. v. Byrd,

470 U.S. 213 (1985)................................ 6, 12, 15, 27

Dickinson v. Heinold Securities, Inc.,

661 F.2d 638 (7th Cir. 1981) ................................. 14

Dillon v. BMO Harris Bank, N.A.,

787 F.3d 707 (4th Cir. 2015) ................................... 7

DIRECTV, Inc. v. Imburgia,

136 S. Ct. 463 (2015) ................................. 16, 24, 25

Doctor's Associates, Inc. v. Casarotto,

517 U.S. 681 (1996)............................................ 6, 23

Dumont v. Saskatchewan Gov't Ins. (SGI),

258 F.3d 880 (8th Cir. 2001) ................................... 8

Gavlik Constr. Co. v. H.F. Campbell Co.,

526 F.2d 777 (3d Cir. 1975) ..................................... 8

vi

Gingiss Int'l, Inc. v. Bormet,

58 F.3d 328 (7th Cir.1995) .................................... 14

Gordon v. Dadante,

294 Fed. Appx. 235 (6th Cir. 2008) ......................... 8

Grigsby & Associates, Inc. v. M Sec. Inv.,

635 Fed. Appx. 728 (11th Cir. 2015) ............... 18, 19

Gutierrez v. Wells Fargo Bank, NA,

889 F.3d 1230 (11th Cir. 2018) ............................... 7

H & S Ventures, Inc. v. RM Techtronics, LLC,

CV N15C-11-082 JRJ, 2017 WL 237623 (Del.

Super. Ct. Jan. 18, 2017) ......................................... 8

Halpern Med. Servs., LLC v. Geary,

2012 WL 691623 (Del. Ch. Feb. 17, 2012) .............. 8

Hill v. Ricoh Americas Corp.,

603 F.3d 766 (10th Cir. 2010) ........................... 7, 19

Howsam v. Dean Witter Reynolds, Inc.,

537 U.S. 79 (2002) ............................................. 7, 22

Ivax Corp. v. B. Braun of Am., Inc.,

286 F.3d 1309 (11th Cir. 2002) ............................. 18

J & S Construction Co., Inc. v. Travelers Indemnity

Co.,

520 F.2d 809 (1st Cir.1975) ..................................... 9

Khan v. Parsons Glob. Services, Ltd.,

521 F.3d 421 (D.C. Cir. 2008).................................. 8

Kindred Nursing Centers Ltd. P'ship v. Clark,

137 S. Ct. 1421 (2017) ..................................... 16, 28

KPMG LLP v. Cocchi,

565 U.S. 18 (2011) ..........................................passim

KPMG LLP v. Cocchi,

88 So. 3d 327 (Fla. 4th DCA 2012).................. 14, 15

vii

Krinsk v. SunTrust Banks, Inc.,

654 F.3d 1194 (11th Cir. 2011) ....................... 13, 21

Marmet Health Care Ctr., Inc. v. Brown,

565 U.S. 530 (2012).......................................... 16, 28

MicroStrategy, Inc. v. Lauricia,

268 F.3d 244 (4th Cir. 2001) ................................. 17

Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth,

Inc.,

473 U.S. 614, (1985)................................................. 5

Moses H. Cone Memorial Hospital v. Mercury Constr.

Corp.,

460 U.S. 1 (1983) ............................................passim

Nat’l Foundation for Cancer Research v. A.G.

Edwards & Sons, Inc.,

821 F.2d 772 (D.C. Cir. 1987).........................passim

O'Flarity v. Trend Star Dev., Inc.,

689 So. 2d 1297 (Fla. 4th DCA 1997).............. 20, 23

Patten Grading & Paving, Inc. v. Skanska USA

Bldg., Inc.,

380 F.3d 200 (4th Cir. 2004) ................................. 19

Perry v. Thomas,

482 U.S. 483 (1987).................................................. 6

Preston v. Ferrer,

552 U.S. 346 (2008).................................... 21, 27, 28

Rankin v. Allstate Insurance Co.,

336 F.3d 8 (1st Cir. 2003) ...................................... 18

Raymond James Financial Services, Inc. v. Saldukas,

896 So. 2d 707 (Fla. 2005) ........................... 9, 11, 13

Rush v. Oppenheimer & Co.,

779 F.2d 885 (2nd Cir. 1985) ................................... 9

viii

Southland Corp. v. Keating,

465 U.S. 1 (1984) ......................................... 6, 12, 22

Sovak v. Chugai Pharm. Co.,

280 F.3d 1266 (9th Cir. 2002) ........................... 8, 17

St. Mary's Med. Ctr. of Evansville, Inc. v. Disco

Aluminum Products Co., Inc.,

969 F.2d 585 (7th Cir. 1992) ................. 8, 19, 21, 23

Stok & Associates, P.A. v. Citibank, N.A.,

562 U.S. 1215 (2011)................................................ 4

Stok & Associates, P.A. v. Citibank, N.A.,

563 U.S. 1029 (2011)................................................ 4

Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp.,

559 U.S. 662 (2010)................................................ 22

Sutherland v. Ernst & Young, LLP,

600 Fed. Appx. 6 (2d Cir. 2015)............................... 7

Tenneco Resins, Inc. v. Davy Intern., A.G.,

770 F.2d 416 (5th Cir.1985) .................................... 9

Walker v. J.C. Bradford & Co.,

938 F.2d 575 (5th Cir.1991) .................................. 19

Wells v. State,

132 So. 3d 1110 (Fla. 2014) ............................... 2, 11

Zimmer v. CooperNeff Advisors, Inc.,

523 F.3d 224 (3d Cir. 2008) ..................................... 7

Statutes

28 U.S.C. § 1257 ...................................................... 1, 2

9 U.S.C. § 2.........................................................passim

Other Authorities

Revised Uniform Arb. Act of 2000, 7 U.L.A. at 13

(Supp.2002) .............................................................. 7

1

PETITION FOR A WRIT OF CERTIORARI

Petitioners Morgenthau Venture Partners,

L.L.C., and Morgenthau Accelerator Fund, L.P.,

(“Morgenthau”) respectfully petition for a writ of

certiorari to review the judgment of the Florida

Fourth District Court of Appeal in this case.

OPINIONS BELOW

The Florida Fourth District Court of Appeal

(“Fourth DCA”) panel opinion (App. A, infra, 1a-2a) is

unreported. The Fourth DCA order denying panel

rehearing and rehearing en banc (App., infra, 3a-4a)

is unreported. The trial court’s order denying

Morgenthau’s motion to compel arbitration (App.,

infra, 5a) is unreported.

JURISDICTION

The judgment of the Fourth DCA, a per curiam

affirmance without opinion, was entered on

September 27, 2018. The Fourth DCA denied

Morgenthau’s timely motion for rehearing and

rehearing en banc on November 2, 2018. On January

17, 2019, Justice Thomas extended the time within

which to file a petition for a writ of certiorari to and

including March 4, 2020. 1 See Morgenthau Venture

Partners, LLC, et al., v. Robert A. Kimmel, No.

18A757. A per curiam affirmance without opinion is

not reviewable by the Florida Supreme Court, making

the Fourth DCA “the highest court of [Florida] in

which a decision could be had” for purposes of this

Court’s jurisdiction under 28 U.S.C. § 1257(a). See,

e.g., Nash v. Fla. Indus. Comm’n, 389 U.S. 235, 237

n.1 (1967); Wells v. State, 132 So. 3d 1110, 1111 (Fla.

1 The extension to “2020” was apparently a scrivener’s error.

2

2014) (reiterating that the Florida Supreme Court

“lacks discretionary review jurisdiction over

unelaborated per curiam affirmances and denials”).

This Court therefore has jurisdiction over the Fourth

DCA’s order affirming the denial of Morgenthau’s

motion to compel arbitration pursuant to 28 U.S.C. §

1257(a).

STATUTORY PROVISION INVOLVED

The Federal Arbitration Act (“FAA”), 9 U.S.C. §§

1-16,

mandates

enforcement

of

arbitration

agreements contained in contracts evidencing

transactions in interstate commerce. Section 2 of the

FAA provides,

A written provision in any maritime

transaction or a contract evidencing a

transaction involving commerce to settle by

arbitration a controversy thereafter arising

out of such contract or transaction, or the

refusal to perform the whole or any part

thereof, or an agreement in writing to

submit to arbitration an existing

controversy arising out of such a contract,

transaction, or refusal, shall be valid,

irrevocable, and enforceable, save upon

such grounds as exist at law or in equity for

the revocation of any contract.

9 U.S.C. § 2.

INTRODUCTION

This case represents the second time Florida’s

Fourth DCA has disregarded this Court’s

unambiguous rejection of “blanket refusal[s] to compel

arbitration” under the FAA. See Cocchi, 565 U.S. at

19. In Cocchi, this Court per curiam vacated a Fourth

DCA decision affirming an order denying arbitration

3

“after determining that two of the four claims in a

complaint were nonarbitrable.” Id. at 20–21. This

Court found it apparent that the Fourth DCA “failed

to determine whether the other two claims in the

complaint were arbitrable,” as its affirmance revealed

“nothing to suggest” the appellate court examined

those claims for arbitrability. Id. at 20–21. The Fourth

DCA repeated the violation here.

After bringing a straightforward case for breach

of a Limited Partnership Agreement and an

accounting, Plaintiff Robert Kimmel learned

Morgenthau had an ironclad defense. The claims

depended on a contractual dissolution date having

passed; however, Morgenthau’s Limited Partner

Board had extended the date. Kimmel responded with

a radically altered amended complaint. He alleged

conflicts of interest by Morgenthau’s Limited Partner

Board and added a claim for breach of fiduciary duty.

Morgenthau then moved to compel arbitration.

The trial court denied the motion on a single basis—

Morgenthau had supposedly waived arbitration by

litigation conduct, a ruling pertinent only to the

original complaint and not the new and materially

different theories in the amended complaint. The

Fourth DCA per curiam affirmed the ruling without

opinion.

Like Cocchi, the ruling revealed “nothing to

suggest” either the trial court or the Fourth DCA

considered the arbitrability of the new claims. Also

like Cocchi, the Fourth DCA’s summary affirmance

avoided having to address the new claims at all. The

result is a denial of arbitration under § 2 of the FAA

without a single word of discussion from two state

courts about the arbitrability of the new, materially

different claims Kimmel injected into the case.

Because this decision is in direct and flagrant conflict

4

with Cocchi and the FAA, this Court should grant the

petition and summarily vacate the Fourth DCA’s

decision.

This Court should also resolve the waiver

question at the heart of the lower court’s refusal to

compel arbitration—whether waiver-by-litigationconduct defenses to arbitration require a showing of

prejudice under the FAA. This Court granted

certiorari from an Eleventh Circuit decision on exactly

this issue in 2011. Stok & Associates, P.A. v. Citibank,

N.A., 562 U.S. 1215 (2011). But Stok settled. Stok &

Associates, P.A. v. Citibank, N.A., 563 U.S. 1029

(2011) (dismissing writ). In the eight years since then,

the issue has continued to thwart otherwise valid and

enforceable arbitration agreements in a minority of

jurisdictions.

Almost certainly, this Court granted review in

Stok because of a 10-2 Circuit split over whether the

FAA requires prejudice to prove a party seeking to

enforce an arbitration agreement waived the right.

Ten Circuits, including the Eleventh Circuit, require

prejudice. Two Circuits, the Seventh and D.C.

Circuits, require no prejudice.

And Florida, though it sits in the Eleventh

Circuit, follows the minority view. The trial court in

this case, bound to follow Florida Supreme Court

precedent that adopted the minority view, denied

Morgenthau’s motion to

compel

arbitration

accordingly.

The issue this Court agreed to review in Stok has

never been resolved. This case is the ideal vehicle for

resolving it now. The trial court based its decision on

Florida’s expansive view of waiver, where merely

filing an answer, as Morgenthau did in response to the

original complaint, waives arbitration regardless of

5

prejudice. Deep conflicts between the Circuits and

state courts remain over when conduct arguably

inconsistent with arbitration overrides § 2’s mandate.

The conflict invites forum shopping. In Florida alone,

the difference between a waived arbitration

agreement and an enforceable one likely depends on

what courthouse a party is in. That is inconsistent

with the FAA’s goals of efficient, uniform enforcement

of arbitration agreements. The Court should grant the

petition to resolve this underlying question as well.

STATEMENT OF THE CASE

A. FAA background, and the Circuit split

over waiver.

Congress enacted the FAA in 1925 to combat

“widespread judicial hostility to arbitration

agreements.” AT&T Mobility LLC v. Concepcion, 563

U.S. 333, 339 (2011); see, e.g., Buckeye Check Cashing,

Inc. v. Cardegna, 546 U.S. 440, 443 (2006). The statute

“reflects an emphatic federal policy in favor of arbitral

dispute resolution.” Cocchi, 565 U.S. at 21 (citing

Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth,

Inc., 473 U.S. 614, 631 (1985); Moses H. Cone

Memorial Hospital v. Mercury Constr. Corp., 460 U.S.

1, 24–25 (1983)) (internal quotes omitted).

The FAA’s core mandate, embodied in § 2, makes

arbitration agreements “valid, irrevocable, and

enforceable, save upon such grounds as exist at law or

in equity for the revocation of any contract.” 9 U.S.C.

§ 2. The Court has recognized “only two limitations on

the enforceability of arbitration provisions governed

by the [FAA]: they must be part of a written maritime

contract or a contract ‘evidencing a transaction

involving commerce’ and such clauses may be revoked

upon ‘grounds as exist at law or in equity for the

revocation of any contract.’” Southland Corp. v.

6

Keating, 465 U.S. 1, 10–11 (1984). The FAA’s

substantive mandate

to

enforce

arbitration

agreements is “applicable in state as well as federal

courts,” as “Congress intended to foreclose state

legislative attempts to undercut the enforceability of

arbitration agreements.” Id. at 16.

To achieve this goal, Congress built into the FAA

a number of rules and procedures recognized by this

Court as heavily favoring arbitration. State and

federal courts must “rigorously enforce agreements to

arbitrate.” Dean Witter Reynolds, Inc. v. Byrd, 470

U.S. 213, 221 (1985). Courts further must “move the

parties to an arbitrable dispute out of court and into

arbitration as quickly and easily as possible,” and

resolve “any doubts concerning the scope of arbitrable

issues … in favor of arbitration,” Moses H. Cone, 460

U.S. at 22, 24–25.

If there are arbitrable and non-arbitrable claims

in a case, courts must send the arbitrable claims to

arbitration “even if the result is ‘piecemeal’ litigation.”

Dean Witter, 470 U.S. at 221. Moreover, “state and

federal courts must examine with care the complaints

seeking to invoke their jurisdiction in order to

separate arbitrable from nonarbitrable claims,” and

courts “may not issue a blanket refusal to compel

arbitration.” Cocchi, 565 U.S. at 19.

State contract law is preserved in § 2’s savings

clause, but this Court interprets the clause to preserve

only “generally applicable contract defenses, such as

fraud, duress, or unconscionability.” Concepcion, 563

U.S. at 339. Defenses “that apply only to arbitration

or that derive their meaning from the fact that an

agreement to arbitrate is at issue” are preempted. See

id. (citing Doctor’s Associates, Inc. v. Casarotto, 517

U.S. 681, 687 (1996); Perry v. Thomas, 482 U.S. 483,

492–493, n. 9 (1987)). The FAA also preempts

7

defenses thought to be “generally applicable” when

courts apply them “in a fashion that disfavors

arbitration,” when the defense “would have a

disproportionate impact on arbitration agreements,”

and when they “stand as an obstacle to the

accomplishment of the FAA’s objectives.” Concepcion,

563 U.S. at 341-43.

Waiver is a defense to the enforcement of

arbitration agreements. See Moses H. Cone, 460 U.S.

at 25. Where the waiver question arises from the

contract, “i.e., whether prerequisites such as time

limits, notice, laches, estoppel, and other conditions

precedent to an obligation to arbitrate,” this Court

holds that it is an issue for the arbitrator to decide.

See Howsam v. Dean Witter Reynolds, Inc., 537 U.S.

79, 84-85 (2002) (citing Revised Uniform Arb. Act of

2000, cmt. 2, 7 U.L.A. at 13 (Supp.2002)) (emphasis in

original). However, where the alleged waiver arises

from litigation conduct, courts have generally

determined that it is an issue for them to decide.

The Circuits have split over what standards

govern waiver under the FAA. The majority view,

followed by the First, Second, Third, Fourth, Fifth,

Sixth, Eighth, Ninth, Tenth, and Eleventh Circuits,

holds that a waiver defense requires a showing of

prejudice. See, e.g., Gutierrez v. Wells Fargo Bank, NA,

889 F.3d 1230, 1236 (11th Cir. 2018); Dillon v. BMO

Harris Bank, N.A., 787 F.3d 707, 713 (4th Cir. 2015);

Sutherland v. Ernst & Young, LLP, 600 Fed. Appx. 6,

8 (2d Cir. 2015) (“The key to a waiver analysis is

prejudice.”); Hill v. Ricoh Americas Corp., 603 F.3d

766, 774 (10th Cir. 2010); Zimmer v. CooperNeff

Advisors, Inc., 523 F.3d 224, 231 (3d Cir. 2008)

(finding “prejudice is the touchstone for determining

whether the right to arbitrate has been waived by

litigation conduct.”); Gordon v. Dadante, 294 Fed.

8

Appx. 235, 238 (6th Cir. 2008); Marie v. Allied Home

Mortgage Corp., 402 F.3d 1, 15 (1st Cir. 2005); Cargill

Ferrous Intern. v. Sea Phoenix MV, 325 F.3d 695, 700

(5th Cir. 2003); Sovak v. Chugai Pharm. Co., 280 F.3d

1266, 1270 (9th Cir. 2002); Dumont v. Saskatchewan

Gov’t Ins. (SGI), 258 F.3d 880, 886 (8th Cir. 2001).

On the minority side, the Seventh and D.C.

Circuits require no prejudice at all. See, e.g., Khan v.

Parsons Glob. Services, Ltd., 521 F.3d 421, 425 (D.C.

Cir. 2008); Cabinetree of Wisconsin, Inc. v. Kraftmaid

Cabinetry, Inc., 50 F.3d 388, 390 (7th Cir. 1995); St.

Mary’s Med. Ctr. of Evansville, Inc. v. Disco

Aluminum Products Co., Inc., 969 F.2d 585, 590 (7th

Cir. 1992); Nat’l Foundation for Cancer Research v.

A.G. Edwards & Sons, Inc., 821 F.2d 772, 777 (D.C.

Cir. 1987). These courts view waiver as a generally

applicable contract defense requiring nothing more

than conduct inconsistent with arbitration.

The States are also divided. Relevant to this

case, Delaware requires prejudice. See, e.g., H & S

Ventures, Inc. v. RM Techtronics, LLC, CV N15C-11082 JRJ, 2017 WL 237623, at *3 (Del. Super. Ct. Jan.

18, 2017) (explaining, “Courts generally look to

whether the party opposing arbitration has suffered

any prejudice as a result of the delay in

demanding arbitration”); Halpern Med. Servs., LLC v.

Geary, 2012 WL 691623, at *3 (Del. Ch. Feb. 17, 2012)

(holding “[I]t is not merely the inconsistency of a

party’s actions, but the presence or absence of

prejudice which is determinative of waiver.”) (quoting

Gavlik Constr. Co. v. H.F. Campbell Co., 526 F.2d 777,

783 (3d Cir. 1975)); Action Drug Co. v. R. Baylin Co.,

Civil Action 9383, 1989 WL 69394, at *3 (Del. Ch.

June 19, 1989) (holding “Baylin has not satisfied its

heavy burden of establishing that it was prejudiced by

Action’s allegedly tardy effort to compel arbitration.”)

9

(citing for the requirement of waiver Rush v.

Oppenheimer & Co., 779 F.2d 885 (2nd Cir. 1985); J &

S Construction Co., Inc. v. Travelers Indemnity

Co., 520 F.2d 809 (1st Cir.1975); Tenneco Resins, Inc.

v. Davy Intern., A.G., 770 F.2d 416 (5th Cir.1985)).

Florida does not. The Florida supreme court

addressed this issue in Raymond James Financial

Services, Inc. v. Saldukas, 896 So. 2d 707 (Fla. 2005).

That court reasoned that since “the United States

Supreme Court has not decided this issue as to the

Federal Arbitration Act, Florida courts are free to

interpret the federal statute as being consistent with

Florida court decisions analyzing this same issue

under the Florida Arbitration Code.” Id. at 710. The

court decided therefore that Florida’s definition of

waiver—“the

voluntary

and

intentional

relinquishment of a known right or conduct which

implies the voluntary and intentional relinquishment

of a known right”—should apply to FAA arbitration.

Id. at 711. And the court adopted the D.C. Circuit’s

reasoning that “the ‘strong federal policy in favor of

enforcing arbitration agreements’ is based upon the

enforcement of contract, rather than a preference for

arbitration as an alternative dispute resolution

mechanism.” Id. (quoting A.G. Edwards, 821 F.2d at

774–75). Thus, the Florida supreme court concluded,

the FAA imposes “no requirement for proof of

prejudice” to prevail on a waiver defense. Saldukas,

896 So. 2d at 710.

B. Factual and Procedural Background

Kimmel sued Morgenthau in Florida state circuit

court alleging breach of contract and seeking an

accounting. Kimmel based the claims on a contractual

dissolution provision in the Limited Partnership

Agreement that required a return of investment by a

date certain. Morgenthau answered and produced

10

documents showing Morgenthau’s Limited Partner

Board had, consistent with the Limited Partnership

Agreement, already extended the dissolution date.

Therefore, no return of investment was due.

The case would have ended there, but Kimmel

responded with an amended complaint and an

entirely new theory. He claimed Morgenthau’s

Limited Partner Board had supposed conflicts of

interest and that, as a result, the extension of the

dissolution date was supposedly “null and void.”

Kimmel altered his breach of contract theories to

reflect the new allegations and added a new breach of

fiduciary duty claim.

Morgenthau responded by moving to compel

arbitration under the FAA. An arbitration clause in

the Limited Partnership Agreement broadly provided

that “any dispute or disagreement concerning,

pertaining or relating to this Agreement . . . shall be

submitted to arbitration under the laws of the

American Arbitration Association. . . .”

Kimmel’s entire defense to the motion was

waiver. He contended Morgenthau’s answer and

document production waived its right to arbitration

under Florida law. A contractual choice-of-law

provision, however, adopted “applicable Federal laws

and the laws of the State of Delaware.” The FAA and

Delaware required Kimmel to show prejudice to prove

waiver, Morgenthau argued, and Kimmel had none.

Morgenthau also argued Kimmel’s new, materially

different theories revived Morgenthau’s right to

arbitration under persuasive Eleventh Circuit case

law.

The trial court denied Morgenthau’s motion

solely on waiver grounds. App., infra, 3a-4a. The court

determined that Delaware law supposedly adopts the

11

forum’s choice of law rules for waiver. In spite of the

parties’ choice of Delaware and FAA law, therefore,

the trial court ruled the question of waiver was,

paradoxically, still controlled by Florida law. See id.

at 3a. Accordingly, the Florida supreme court’s

decision in Saldukas that prejudice is not required

controlled, and the trial court deemed Morgenthau’s

limited litigation conduct to be a waiver of arbitration.

App., infra, 3a. The trial court’s order made no

mention of, much less addressed in any meaningful

way, the new and materially different claims raised by

the amended complaint or Morgenthau’s revival

argument. See id.

Morgenthau appealed to the Fourth DCA.

Morgenthau argued that this Court’s decision in

Cocchi required reversal, as the trial court gave no

indication it considered the arbitrability of Kimmel’s

new and materially different theories and claims.

Morgenthau further argued the new theories were

indisputably arbitrable, that no alleged waiver

argument applied to them, and that the new theories

revived the right to arbitration in any case. The

Fourth DCA affirmed the denial of arbitration without

opinion. App., infra, 1a-2a. The Fourth DCA similarly

denied Morgenthau’s motion for rehearing en banc

without discussion. The one-word decisions foreclosed

any opportunity to seek review in the Florida supreme

court. See Wells, 132 So. 3d at 1111.

REASONS FOR GRANTING THE PETITION

I.

The Fourth DCA flagrantly violated this

Court’s decision in Cocchi and the FAA.

This Court’s decision in Cocchi enforced the

FAA’s longstanding principle that “when a complaint

contains both arbitrable and nonarbitrable claims, the

Act requires courts to compel arbitration of pendent

12

arbitrable claims … even where the result would be

the possibly inefficient maintenance of separate

proceedings in different forums.” Cocchi, 565 U.S. at

22 (citing Dean Witter, 470 U.S. at 217) (internal

quotes omitted). It was “not altogether free

from doubt” whether the Fourth DCA had examined

two of the alleged claims for arbitrability. Cocchi, 565

U.S. at 19. Nor was it entirely clear that the

apparently unexamined claims were ultimately

arbitrable. See id. at 22. The question swung on

whether the claims were derivative, in which case

they were arbitrable, or direct. The Florida courts

decided two were direct and denied arbitration. The

problem was that the Fourth DCA gave no sign that it

even considered the arbitrability of the other two

claims. This Court concluded the Fourth DCA’s

“apparent refusal to compel arbitration on any of the

four claims based solely on a finding that two of them

… were nonarbitrable” constituted a patent violation

of the FAA’s “emphatic federal policy in favor of

arbitral dispute resolution.” Id. at 21 (citations

omitted). The Fourth DCA could not ignore any

potential arbitrable claim. Id. at 19 (holding courts

“must examine with care the complaints” to assess

each claim for arbitrability). Nor could it keep its

reasons secret, presuming it even had reasons beyond

the traditional hostility of Florida courts to

arbitration. See Buckeye, 546 U.S. at 443–44. It had to

decide each claim’s arbitrability as § 2 mandates. The

Fourth DCA’s failure to do so made its decision

“subject to immediate review.” Cocchi, 565 U.S. at 22

(citing Southland, 465 U.S. at 6–7).

This case presents an even stronger argument

that neither the trial court nor the Fourth DCA gave

any consideration to the arbitrability of the new and

materially different claims and theories Kimmel

13

raised in his amended complaint. The trial court’s

limited discussion of Delaware choice-of-law and

Saldukas’s rejection of prejudice, App., infra, 3a, had

nothing to do with Kimmel’s new claims. Prejudice or

no prejudice, the only litigation conduct Morgenthau

engaged in after the amended complaint was to retain

new counsel and move to compel arbitration. That

would not qualify as a waiver under any state’s law,

or at least any law not repugnant to the FAA. The

FAA required the courts below to assess the new

theories and claims for arbitrability. Cocchi, 565 U.S.

at 22. Had they done so, denying the motion to compel

arbitration would have been extremely difficult.

Morgenthau relied on Eleventh Circuit and other

federal court decisions holding that substantially new

claims will revive a right to arbitrate that had

allegedly been previously waived. See, e.g., Krinsk v.

SunTrust Banks, Inc., 654 F.3d 1194, 1202–03 (11th

Cir. 2011) (collecting cases and holding, “courts will

permit the defendant to rescind his earlier waiver,

and revive his right to compel arbitration” where “the

amended complaint unexpectedly changes the scope

or theory of the plaintiff’s claims.”); Doctor’s

Associates, Inc. v. Distajo, 107 F.3d 126, 133 (2d Cir.

1997) (holding “only prior litigation of the same legal

and factual issues as those the party now wants to

arbitrate results in waiver of the right to arbitrate,”

and even an “explicit waiver of its right to arbitrate

certain claims would not necessarily waive arbitration

of other claims raised in an amended complaint filed

after … this waiver.”). These and related decisions

reject the possibility that an alleged original waiver

irreversibly destroys the right to arbitrate no matter

what new and different theories the plaintiff injects

into the case. See Collado v. J. & G. Transp., Inc., 820

F.3d 1256, 1260 (11th Cir. 2016) (holding the

14

defendant “did not waive the right to arbitrate the

state law claims raised in the second amended

complaint because those claims were not in the case

when it waived by litigation the right to arbitrate the

FLSA claim”); Dickinson v. Heinold Securities, Inc.,

661 F.2d 638, 640 (7th Cir. 1981) (holding the

defendant did not waive the right to compel

arbitration of state law claims alleged in an amended

complaint that were alluded to, but not clearly stated,

in the original complaint); see also Gingiss Int’l, Inc. v.

Bormet, 58 F.3d 328, 330–332 (7th Cir.1995) (holding

that a franchisor who brought an unlawful detainer

action against its franchisee had not waived its right

to arbitrate other claims brought by the franchisee

where the two suits “involved different issues.”).

The parties in this case debated just how

radically different Kimmel’s new breach of fiduciary

duty and conflicted-Limited-Partner-Board theories

were. They were extremely different, as Kimmel

strained to morph his original claim of a lapsed

dissolution date into one that could survive the fact

that the dissolution date had not actually occurred.

Allegations of a tainted Limited Partner Board and a

purportedly null and void extension materially

changed the case. Kimmel denied this. But whatever

the merits of his (frankly dubious) argument that the

changes to his case were not all that substantial, the

trial court and Fourth DCA had to address the issue—

just as the Fourth DCA had to address whether two

counts were direct or derivative in Cocchi. 2 To offer no

2 It comes as no surprise that on remand in Cocchi, the Fourth

DCA, forced to examine all the claims for arbitrability, decided

that “KPMG is correct in its assertion that these are derivative

claims subject to arbitration.” See KPMG LLP v. Cocchi, 88 So.

3d 327, 331 (Fla. 4th DCA 2012).

15

word at all on Kimmel’s new claims and Morgenthau’s

revival theory violates the FAA and this Court’s

decision in Cocchi to the core.

The threat to the FAA this Court perceived in

Cocchi’s “blanket order” is critical. If courts hostile to

arbitration could deny motions to compel by simply

saying nothing, they would do it all the time. The

“immediate” review Cocchi requires would be

virtually impossible. See Cocchi, 565 U.S. at 22. It

would be too easy to assume the blanket orders and

one-word denials rejecting arbitration must have been

backed by some good reasons consistent with the FAA,

and too burdensome to prove otherwise. The final

result in Cocchi, a reversal with instructions to compel

arbitration, see Cocchi, 88 So. 3d at 331, illustrates

exactly that. This Court understood in Cocchi that the

mandate and strong presumptions embodied by § 2 of

the FAA would be useless if courts did not have to

articulate their analysis. Indeed, silent orders

denying arbitration are as much a threat to the FAA,

if not a graver threat, as the hostile court-created

rules this Court has explicitly invalidated for decades.

The Fourth DCA’s repeated and inexplicable

failure to abide by this Court’s instructions on the

FAA therefore requires review. It must be made

unmistakable that arbitration cannot be denied in the

dark. Cocchi and Dean Witter are critical components

of this Court’s FAA precedent, establishing that

courts cannot ignore any potential arbitrable claim

and must, after careful review, compel the ones

deemed arbitrable to arbitration. If the case changes

and a party then moves to compel arbitration, it

follows that courts must examine the new claims for

arbitrability just as they would the original claims.

Because the Fourth DCA failed to say anything

about Kimmel’s new claims or Morgenthau’s revival

16

argument, the Court should grant the petition and

vacate the Fourth DCA’s decision as a clear-cut

violation of this Court’s FAA precedent. See Marmet

Health Care Ctr., Inc. v. Brown, 565 U.S. 530, 531

(2012) (granting certiorari and summarily vacating

where

“the

Supreme

Court

of

Appeals

of West Virginia, by misreading and disregarding the

precedents of this Court interpreting the FAA, did not

follow controlling federal law”); Cocchi, 565 U.S. at 22

(granting the petition for certiorari and vacating the

Fourth DCA’s judgment for “fail[ing] to give effect to

the plain meaning of the Act and to the holding

of Dean Witter”); see also Kindred Nursing Centers

Ltd. P’ship v. Clark, 137 S. Ct. 1421, 1429 (2017)

(reversing the Kentucky supreme court “when it

flouted the FAA’s command to place [arbitration]

agreements on an equal footing with all other

contracts.”); DIRECTV, Inc. v. Imburgia, 136 S. Ct.

463, 468 (2015) (noting, in reversing a California

court that circumvented Concepcion, “[t]he Federal

Arbitration Act is a law of the United States,

and Concepcion is an authoritative interpretation of

that Act. Consequently, the judges of every State must

follow it.”).

II.

The Circuits are in conflict, as are the

States, over whether the FAA requires a

showing of prejudice to prove waiver.

The 10-2 split among the Circuits has led to

vastly disparate treatment of waiver defenses raised

in opposition to motions to compel arbitration. The

division is even more pronounced than it appears. The

Circuits that require prejudice take vastly different

approaches. And States, bound as they are to enforce

the FAA, have adopted the waiver requirements they

like rather than the ones that promote the FAA’s

objectives.

17

The majority view is correct. Arbitration

agreements are far easier to enforce when prejudice is

required to prove waiver than when it is not required.

This Court should grant the Petition to decide the

Circuit split and finally create national uniformity in

how State and federal courts decide waiver defenses

under the FAA.

A. The Circuits have splintered over the

requirements for waiver.

Ten Circuits require some level of prejudice, but

they do not agree on how to apply the requirement to

waiver defenses. There is wide disparity in the level of

prejudice required and the burden required to prove

it. The Fifth Circuit employs a strong presumption

against waiver of arbitration. See, e.g., Cargill, 325

F.3d at 700 (stating “[w]aiver of arbitration is not a

favored finding and there is a presumption against

it”). The Ninth and Fourth Circuits similarly place a

“heavy burden” on the party seeking to establish

waiver of a right to arbitrate. Sovak, 280 F.3d at 1270

(explaining “Sovak bears a ‘heavy burden of proof’ in

showing” the elements of waiver); MicroStrategy, Inc.

v. Lauricia, 268 F.3d 244, 249-50 (4th Cir. 2001)

(same, and finding “the circumstances giving rise to a

statutory default are limited and, in light of the

federal policy favoring arbitration, are not to be lightly

inferred”).

The Second Circuit similarly holds that “waiver

of the right to arbitration is not to be

lightly inferred,” and proof of prejudice is mandatory.

Thyssen, Inc. v. Calypso Shipping Corp., S.A., 310

F.3d 102, 104–05 (2d Cir. 2002). The Second Circuit

recognizes two types of prejudice—“substantive

prejudice . . . such as when a party loses a motion on

the merits and then attempts, in effect, to relitigate

the issue by invoking arbitration, or” prejudice due to

18

excessive cost and time delay, “when a party too long

postpones his invocation of his contractual right to

arbitration, and thereby causes his adversary to incur

unnecessary delay or expense.” See id.

The Third Circuit has taken it a step further,

crafting a six-part test to determine the presence of

prejudice. See Ehleiter v. Grapetree Shores, Inc., 482

F.3d 207, 223 (3d Cir. 2007) (compiling a

“nonexclusive list of factors” that include, “[1] the

timeliness or lack thereof of a motion to arbitrate; [2]

the degree to which the party seeking to compel

arbitration has contested the merits of its opponent’s

claims; [3] whether that party has informed its

adversary of the intention to seek arbitration even if

it has not yet filed a motion to stay the district court

proceedings; [4] the extent of its non-merits motion

practice; [5] its assent to the [trial] court’s pretrial

orders; and [6] the extent to which both parties have

engaged in discovery.”).

In contrast to the heavy-burden approach of the

Second, Fourth, Fifth, and Ninth Circuits, the First

Circuit requires only a “modicum of prejudice.”

Rankin v. Allstate Insurance Co., 336 F.3d 8, 12 (1st

Cir. 2003). The Eleventh Circuit requires that when a

party acts “inconsistently with the arbitration right,”

the actions must have “in some way prejudiced the

other party.” Ivax Corp. v. B. Braun of Am., Inc., 286

F.3d 1309, 1315–16 (11th Cir. 2002).

On the other hand, the Eleventh Circuit also

holds that even filing a lawsuit against a defendant

will not by itself waive arbitration. See Grigsby &

Associates, Inc. v. M Sec. Inv., 635 Fed. Appx. 728, 733

(11th Cir. 2015) (finding “no case in which we have

held that a party waived its right to arbitrate solely

by delay in initiating the proceeding or based on the

amount of time that elapsed.”); Ivax, 286 F.3d at 1317

19

(holding a party “had not waived its right to arbitrate

by earlier filing a suit against a third party.”).

Nor does mere delay, fees and costs, or engaging

in discovery qualify as prejudice in the Eleventh,

Fourth, Fifth, and Tenth Circuits. See Grigsby, 635

Fed. Appx. at 734 (“incurring minimal fees in

responding to lawsuits is insufficient to establish

prejudice supporting a finding of waiver.”); Hill, 603

F.3d at 775–76 (finding no “substantial prejudice from

Ricoh’s delay in seeking arbitration,” and no evidence

that “he has been burdened by discovery significantly

more than he would have been if the dispute had gone

to arbitration at the outset”); Patten Grading &

Paving, Inc. v. Skanska USA Bldg., Inc., 380 F.3d 200,

206–07 (4th Cir. 2004) (recognizing that the “minimal

nature of the discovery” was “insufficient to establish

prejudice”); Walker v. J.C. Bradford & Co., 938 F.2d

575, 578 (5th Cir.1991) (holding “minimal discovery”

in litigation was not prejudice).

The two Circuits that do not require prejudice,

the Seventh and D.C. Circuits, have a decidedly

broader view of waiver. The Seventh Circuit reviews

waiver decisions for “clear error only,” making waiver

findings extremely hard to reverse. Waiver “can be

implied as well as express.” In deciding waiver, “the

court is not to place its thumb on the scales,” as “the

federal policy favoring arbitration is … merely a policy

of treating such clauses” and “a party need not show

that it would be prejudiced if the stay were granted

and arbitration ensued.” Cabinetree, 50 F.3d at 390.

Courts can consider prejudice in the D.C. and Seventh

Circuits, but they need not. See Disco, 969 F.2d at 590;

A.G. Edwards, 821 F.2d at 777 (holding “[t]his circuit

has never included prejudice as a separate and

independent element of the showing necessary to

demonstrate waiver of the right to arbitration.”).

20

Virtually any litigation conduct will waive the right to

arbitrate. See Cabinetree, 50 F.3d at 390 (“invoking

judicial process is presumptive waiver”) (emphasis

added); A.G. Edwards, 821 F.2d at 775 (defining

“conduct inconsistent with the right to arbitrate” as

“active participation in a lawsuit”).

That is the view embraced in Florida, as well,

where the mere filing of an answer, or minimal

engagement in discovery, suffices to waive

arbitration. See, e.g., O’Flarity v. Trend Star Dev.,

Inc., 689 So. 2d 1297, 1297 (Fla. 4th DCA 1997)

(holding “[t]he filing of an answer is an act

inconsistent with a subsequent demand to arbitrate”)

(collecting cases). The trial court made exactly this

finding against Morgenthau in this case with respect

to the initial complaint. App., infra, 3a. Morgenthau

had answered and responded to some preliminary

discovery requests. Not a single hearing or deposition

had taken place. Yet, the trial court determined that

was enough to waive arbitration, since no showing of

prejudice was necessary. Id.

There is a dire need for uniformity in how courts

treat prejudice in deciding waiver claims. To be sure,

waiver will virtually always depend on the facts of a

case. But it is also clear that waiver is so much easier

to prove, and nearly impossible to reverse, in those

Circuits and States that do not require prejudice. See

Cabinetree, 50 F.3d at 390; A.G. Edwards, 821 F.2d at

775. Making prejudice mandatory necessarily

requires a more substantial showing of not just

actions inconsistent with arbitration but resulting

harm. Without prejudice, almost anything will do. See

id.

This disparity makes arbitration agreements

more difficult to enforce. Forum shopping is available.

Plaintiffs can better their chances of avoiding

21

arbitration by suing in a no-prejudice Circuit or State.

Even the D.C. and Seventh Circuits implicitly

recognize their waiver standard is substantially

easier to meet. That is why they felt the need to

distinguish, as this Court has not so finely done, the

FAA policy favoring the enforcement of arbitration

agreements from a policy favoring arbitration itself.

See Disco, 969 F.2d at 590; A.G. Edwards, 821 F.2d at

774.

This case is an ideal vehicle to settle the split.

The decision below turned entirely on whether the

FAA requires prejudice. If so, Kimmel’s waiver claim

could not prevail. He could hardly claim the simple

filing of an answer and the receipt of discovery to

requests he himself had served prejudiced him.

Indeed, Morgenthau’s minimal participation in

litigation led Kimmel to revise his claims and theories

of recovery entirely, and coincidentally revive

Morgenthau’s right to arbitration. See Krinsk, 654

F.3d at 1202–03. In any event, the lower court made

no determination of prejudice, deciding simply that it

did not have to.

Accordingly, this Court should grant the Petition

and settle the question of whether the FAA requires

prejudice to prove waiver.

B. The decision below is wrong, as not

requiring prejudice conflicts with the

FAA’s goals.

This Court’s “cases place it beyond dispute that

the FAA was designed to promote arbitration.”

Concepcion, 563 U.S. at 345; see, e.g., Cocchi, 565 U.S.

at 21 (stating the FAA “reflects an emphatic federal

policy in favor of arbitral dispute resolution.”)

(citation, internal quotes omitted); Preston v. Ferrer,

552 U.S. 346, 349 (2008) (finding the FAA “establishes

22

a national policy favoring arbitration when the parties

contract for that mode of dispute resolution”) (citing

Southland, 465 U.S. at 16). The courts have

recognized “a body of federal substantive law of

arbitrability” to achieve this purpose. Moses H. Cone,

460 U.S. at 24. State law plays a role under § 2’s

savings clause. But while “the interpretation of an

arbitration agreement is generally a matter of state

law,” it is also true that “the FAA imposes certain

rules of fundamental importance,” which take

precedence. Stolt-Nielsen S.A. v. AnimalFeeds Int’l

Corp., 559 U.S. 662, 681 (2010) (citations omitted).

This Court’s admonition that “any doubts

concerning the scope of arbitrable issues should be

resolved in favor of arbitration, whether the problem

at hand is the construction of the contract language

itself or an allegation of waiver, delay, or a like defense

to arbitrability,” is one such fundamental rule. Moses

H. Cone, 460 U.S. at 24–25 (emphasis added). This

language makes explicit that waiver defenses are no

exception to the emphatic FAA policy promoting

arbitration.

On the occasion this Court has reviewed

questions of FAA waiver, it has held true to this

policy. In the context of contractual waivers, for

example—i.e., disputes over conditions precedent, or

limitations periods in incorporated forum rules—this

Court has held the question is presumptively for the

arbitrator to decide. See Howsam, 537 U.S. at 84-85.

Also relevant is this Court’s decision in

Concepcion, which struck down a California courtmade

rule

deeming

class

action

waivers

presumptively

unconscionable.

Though

unconscionability is a contract defense “normally

thought to be generally applicable,” this Court still

found the FAA preempted it, as California courts had

23

applied it “in a fashion that disfavors arbitration.”

Concepcion, 563 U.S. at 341, 352.

In this case, Florida and the two federal Circuits

that reject prejudice requirements for FAA waiver

defenses have adopted a rule that clearly disfavors

arbitration. Not requiring prejudice makes it far

easier to avoid valid arbitration agreements. The

inquiry begins and ends with litigation conduct, no

matter how slight. In Florida, the mere filing of an

answer immediately waives the right to arbitrate. See,

e.g., O’Flarity, 689 So. 2d at 1297. One false move in

Florida state court erases the entire “body of federal

substantive law of arbitrability” this Court has spent

decades reinforcing. Moses H. Cone, 460 U.S. at 24.

Such an expansive view of waiver defeats the FAA’s

clear intent to promote the enforcement of arbitration

agreements. See Concepcion, 563 U.S. at 345; Moses

H. Cone, 460 U.S. at 24-25.

The Seventh and D.C. Circuit decisions rejecting

a prejudice requirement are furthermore not good law.

The Seventh Circuit stakes much of its reasoning on

the FAA’s goal of placing arbitration agreements on

equal footing with other contracts. See Disco, 969 F.2d

at 590 (citation omitted). The court explains that “we

should treat a waiver of the right to arbitrate the same

as we would treat the waiver of any other contract

right.” Id.

In fact, that policy has always been used to

promote the enforcement of arbitration agreements

and to strike down laws and rulings that single out

contractual arbitration agreements for suspect

treatment. See, e.g., Concepcion, 563 U.S. at 339;

Doctor’s Associates, 517 U.S. at 683 (striking down a

Montana

law

making

arbitration

clauses

unenforceable unless “[n]otice that [the] contract is

subject to arbitration” was “typed in underlined

24

capital letters on the first page of the contract.”). In

Buckeye, for example, this Court reversed a Florida

supreme court decision that invalidated an

arbitration agreement contained in a contract that

was allegedly illegal under Florida’s usury statute.

Because of the usury violation, the Florida court

declared the entire contract void under “Florida public

policy and contract law,” a ruling this Court later held

violated Prima Paint’s rule of severability that

challenges to the agreement as a whole must go to the

arbitrator. The Florida supreme court’s reliance on

distinctions between void and voidable contracts and

State public policy proved to be irrelevant, as this

Court traced the Prima Paint rule back to “the FAA’s

substantive command that arbitration agreements be

treated like all other contracts.” The rule of

severability, this Court explained, “establishes how

this equal-footing guarantee for ‘a written

[arbitration] provision’ is to be implemented.”

Buckeye, 546 U.S. at 447. Under Buckeye, the equalfooting guarantee is about protecting FAA rules like

the severability doctrine that promote arbitration, not

about policies and state rules of contract that defeat

it.

This Court came to much the same conclusion in

its decision in Imburgia. There, a California appeals

court struck a class action waiver clause under state

law despite Concepcion’s express preemption of

precisely that law. The California court justified its

ruling based on a contract provision that incorporated

the “law of your state,” i.e., California law. Imburgia,

136 S. Ct. at 468. Despite the state court’s attempt to

pit FAA principles against each other—i.e. the FAA

rule that parties may agree to any law or procedure

they wish versus Concepcion’s preemption of state

laws barring class-action waivers—this Court

25

reversed. The California court had violated the equalfooting guarantee, this Court held, as it could find no

other instance where a choice of law clause was found

to have incorporated invalid laws. See id. at 470-71.

Because the state court decision had not given “due

regard . . . to the federal policy favoring

arbitration,” this Court held it was “pre-empted by the

Federal Arbitration Act.” Id. at 471 (emphasis added).

In both Buckeye and Imburgia, the equal-footing

guarantee precluded attempts to make valid

arbitration agreements unenforceable, in opposition

to established FAA law. Using the guarantee here to

make arbitration agreements less enforceable, and

much easier to waive, directly undermines the

purpose of both the equal-footing guarantee and the

FAA’s core mandate. See also Concepcion, 563 U.S.

343 (rejecting the use of § 2’s savings clause to

invalidate an agreement to individual arbitration as

“the act cannot be held to destroy itself.”) (citation

omitted).

Judge Posner, in explaining the Seventh

Circuit’s FAA waiver law, found prejudice naturally

present in any demand for arbitration after a lawsuit

is filed: “we have deemed an election to proceed in

court a waiver of a contractual right to arbitrate,

without insisting on evidence of prejudice beyond

what is inherent in an effort to change forums in the

middle (and it needn’t be the exact middle) of a

litigation.” Cabinetree, 50 F.3d at 390.

Concepcion discredits this view, as courts may

not use the characteristics of arbitration to defeat the

right. See Concepcion, 563 U.S. at 341 (finding, “[w]e

said that a court may not rely on the uniqueness of an

agreement to arbitrate as a basis for a state-law

holding that enforcement would be unconscionable,

for this would enable the court to effect what ... the

26

state legislature cannot.”). Just as arbitration

agreements cannot be invalidated for, e.g., “fail[ing] to

provide

for

judicially

monitored

discovery,”

Concepcion, 563 U.S. at 342, prejudice cannot be

presumed from the fact that a party simply moved to

compel arbitration after a lawsuit was filed.

The D.C. Circuit attempted to distinguish waiver

defenses from Moses H. Cone’s command to resolve

doubts about arbitrability in favor of arbitration. See

A.G. Edwards, 821 F.2d at 774–75. The A.G. Edwards

decision reasoned that no question of arbitrability

“arises here; the only issue is whether there has been

waiver.” Id. at 775. That ignores the fact that Moses

H. Cone specifically includes waiver among the

defenses subject to the presumption in favor of

arbitration. See Moses H. Cone, 460 U.S. at 24–25

(defining the “the scope of arbitrable issues” to include

“the contract language itself or an allegation of

waiver”).

There is no reason to carve out waiver from the

presumption anyway. Courts clearly may not pick

apart arguable contract language as a way of

excluding disputes from arbitration. See id. They

should not be permitted to penalize harmless or

insignificant litigation conduct to avoid arbitration

agreements, either.

The D.C. Circuit further justified its rejection of

a prejudice requirement on a supposed distinction

between a policy favoring enforcement of arbitration

agreements and a policy favoring arbitration. See A.G.

Edwards, 821 F.2d at 774 (stating the “Supreme

Court has made clear that the ‘strong federal policy in

favor of enforcing arbitration agreements’ is based

upon the enforcement of contract, rather than a

preference for arbitration as an alternative dispute

resolution mechanism.”) (citing Dean Witter, 470 U.S.

27

at 218–24). But this is a false distinction, as

Concepcion, Cocchi, and Ferrer make clear. See

Cocchi, 565 U.S. at 21 (acknowledging the “emphatic

federal policy in favor of arbitral dispute resolution.”);

Concepcion, 563 U.S. at 345 (stating “our cases place

it beyond dispute that the FAA was designed to

promote arbitration.”); Ferrer, 552 U.S. at 349.

For one, waiver defenses are about the

enforcement of valid arbitration agreements—

specifically, whether a party has the ability to enforce

them after engaging in some litigation conduct. As

Moses H. Cone instructs, this defense is subject to the

same pro-arbitration presumptions as other defenses

to enforcement. See Moses H. Cone, 460 U.S. at 24–25.

Moreover, nothing in this Court’s decision in

Dean Witter supports the distinction the D.C. Circuit

tried to draw, notwithstanding the A.G. Edwards

court’s unexplained citation to the case. To be sure,

Dean Witter defines the FAA’s basic purpose as

“ensur[ing] judicial enforcement of privately made

agreements to arbitrate.” Dean Witter, 470 U.S. at

219-220. But the issue there was whether that strong

federal policy should give way to a countervailing

policy against piecemeal litigation when the case

presents arbitrable and non-arbitrable claims. This

Court definitively ruled in favor of arbitration,

holding “[t]he preeminent concern of Congress in

passing the Act was to enforce private agreements

into which parties had entered, and that concern

requires that we rigorously enforce agreements to

arbitrate, even if the result is ‘piecemeal’ litigation.”

Id. at 221. This concern for rigorous enforcement, even

in the face of inefficient delays and piecemeal

litigation, precludes the kind of expansive waiver

standards the Florida supreme court and the D.C. and

Seventh Circuit’s adopted.

28

The FAA is designed to make enforcement of

arbitration agreements mandatory, prompt, and easy.

It does this, as countless decisions illustrate, with § 2’s

mandate, a raft of rules and procedures heavily

favoring swift enforcement, and strong preemption

rules that eliminate state laws or regulations and

judge-made impediments to arbitration. See, e.g.,

Concepcion, 563 U.S. at 339-52; Ferrer, 552 U.S. at

357–58; Moses H. Cone, 460 U.S. at 24–25. That the

statute requires an agreement to arbitrate by the

parties, and does not normally force non-parties to the

contract into arbitration, does not diminish the clear

preference for arbitration. See Stolt-Nielsen, 559 U.S.

at 683–84. Having a waiver rule decidedly hostile to

arbitration is inconsistent with every other rule and

procedure this Court has recognized and enforced.

Indeed, the scales have to be weighed in favor of

arbitration to overcome the traditional hostility many

States and courts, to this day, still harbor against it.

See Kindred, 137 S. Ct. at 1429; Cocchi, 565 U.S. at

22; Marmet, 565 U.S. at 531.

Accordingly, this Court should grant review to

ensure valid arbitration agreements are enforced

consistent with the FAA’s objectives, and not

invalidated on waiver grounds without any showing of

prejudice.

29

CONCLUSION

For the foregoing reasons, the Court should

grant the petition for a writ of certiorari.

Respectfully submitted,

PETER W. HOMER

Counsel of record

CHRISTOPHER KING

HOMER BONNER JACOBS

1200 Four Seasons Tower

1441 Brickell Avenue

Miami, Florida 33131

(305) 350-5100

phomer@homerbonner.com

cking@homerbonner.com

Attorneys for Petitioners

March 4, 2019

Appendices

1a

APPENDIX A—Fourth District Court of Appeal

Opinion (September 27, 2018)

DISTRICT COURT OF APPEAL OF THE STATE

OF FLORIDA

FOURTH DISTRICT

MORGENTHAU VENTURE PARTNERS, L.L.C., a

Delaware limited liability company and

MORGENTHAU ACCELERATOR FUND, L.P., a

Delaware limited partnership,

Appellants,

v.

ROBERT A. KIMMEL, as trustee of the Robert A.

Kimmel Revocable Trust, and as trustee of the

Kimmel Partnership Trust,

Appellee.

No. 4D18-895

[September 27, 2018]

Appeal of non-final order from the Circuit Court

for the Seventeenth Judicial Circuit, Broward

County; Carol-Lisa Phillips, Judge; L.T. Case No.

CACE-16-006830 (25).

Christopher J. King, Yaniv Adar and Peter W.

Homer of Homer Bonner Jacobs, Miami, for

appellants.

H. Eugene Lindsey, III and John R. Squiteto of

Katz Barron, Miami, for appellee.

PER CURIAM.

Affirmed.

GROSS,

concur.

TAYLOR

and

KLINGENSMITH,

JJ.,

2a

*

*

*

Not final until disposition of timely filed

motion for rehearing.

3a

APPENDIX B—Trial court Order denying

arbitration (March 2, 2018)

IN THE CIRCUIT COURT OF THE

SEVENTEENTH JUDICIAL

CIRCUIT, IN AND FOR BROWARD

COUNTY, FLORIDA

CASE NO.: 16-6830-25

ROBERT KIMMEL

Plaintiff,

vs.

ORDER ON

__________________

__________________

MORGENTHAU VENTURE

PARTNERS, et al.,

Defendant.

______________________________)

THIS CAUSE was considered by the Court on

the following Motion(s) To Compel Arbitration and

For Dismissal or Stay Pending Arbitration.

HEARING was held on February 26, 2018.

THE COURT having considered the grounds for

the Motion, taken testimony, heard argument and

considered the applicable law, it is,

ORDERED as follows:

Denied. A Delaware Court has interpreted the

governing law to a contract to mean that it shall

apply within arbitration proceedings and to the

terms of the contract, not the waiver of arbitration

issue, Unifirst Corp v. Holloway’s Trading. Also, see

Raymond James v. Saldukas—prejudice not

required, but participating or taking action

inconsistent with that right, which is what has

occurred in this case.

4a

DONE AND ORDERED ON March 2, 2018 in

Fort Lauderdale, Broward County, Florida.

/s/

CIRCUIT JUDGE

_

5a

APPENDIX C— Fourth District Court of Appeal

Order Denying Motion for Rehearing and

Rehearing En Banc (November 2, 2018)

IN THE DISTRICT COURT OF APPEAL OF THE

STATE OF FLORIDA FOURTH DISTRICT, 110

SOUTH TAMARIND AVENUE, WEST PALM

BEACH, FL 33401

November 02, 2018

CASE NO.: 4D18-0895

L.T. No.: CACE16-006830 (25)

MORGENTHAU VENTURE PARTNERS, LLC, et al.

Appellant / Petitioner(s)

v.

.

ROBERT A. KIMMEL, as trustee of the Robert

A. Kimmel Revocable Trust, etc.

Appellee / Respondent(s)

________________________________

BY ORDER OF THE COURT:

ORDERED that the appellants’ October 12,

2018 motion for rehearing and motion for rehearing

en banc is denied.

Served:

cc:

Peter

Winslow Homer

Harold Eugene Christopher

Lindsey

King

Yaniv Adar

Clerk Broward

dl

/s/

_

LONN WEISSBLUM, Clerk

Fourth District Court of Appeal

J.