Petroleum Pipe Americas Corporation v. Jindal Saw, Ltd. No. 08-20461

http://www.ca5.uscourts.gov/opinions/pub/08/08-20461-CV0.wpd.pdf

Summary from online Fifth Circuit Reporter:

The Fifth Circuit, assuming arguendo that the parties had agreed to arbitrate this dispute, concluded that Jindal had waived the right to compel arbitration. That conclusion was supported by the Court's finding that Jindal had "substantially invoked the judicial process to the detriment or prejudice of the other party." Walker v. J.C. Bradford & Co., 938 F.2d 575, 577 (5th Cir. 1991). The Court reasoned that although the District Court had not issued a legally binding order or ruling at the May 19, 2008 conference, it did give "very strong indications that [it] favored PPA's interpretation and that it was reluctant to consider further argument." The Court further explained that the lack of a formal ruling did not convince that Jindal, after learning that the District Court was not receptive to its arguments, should be allowed a "second bite at the apple through arbitration."

This case helps plaintiffs when dealing with defendants who want to lay behind the log and go to arbitration after an extended period of time litigating.  The result in the Texas state court system would most likely have been different.  While lower courts finds waiver by participating in the litigation process, the Texas Supreme Court has only found waiver one time, and that was to vacate a substantial arbitration award in favor of the plaintiff.  Perry Homes v. Cull, 258 S.W.3d 589 (Tex. 2008).