The United States Supreme Court recently resolved a circuit split regarding when a party has waived its contractual right to arbitrate by participating in litigation prior to seeking to arbitrate a dispute. In Morgan v. Sundance, Inc., the Court held that the party seeking to resist arbitration does not need to show that it has been prejudiced by the other party’s delay in seeking to compel arbitration. Notably, and in holding that “the Eighth Circuit erred in conditioning a waiver of the right to arbitrate on a showing of prejudice,” the Supreme Court decided against the use of “custom-made rules, to tilt the playing field in favor of (or against) arbitration.”
In an 8-1 decision, the United States Supreme Court recently held in Badgerow v. Walters that federal courts may not examine the substance of arbitration disputes to establish federal question jurisdiction under Sections 9 and 10 of the Federal Arbitration Act (the “FAA”). Not only did this decision resolve a circuit split, it, in essence, shifted more responsibility to state courts to confirm or vacate arbitration awards.