On July 8, the U.S. Court of Appeals for the 9th Circuit affirmed an August 2025 order from the U.S. District Court for the Western District of Washington, holding that a bill-payment company and its officers (the defendants) waived their right to arbitrate through their conduct in a putative class action alleging deceptive bill-payment practices, including undisclosed fees and unauthorized subscription charges.

Reviewing the district court’s ruling de novo, the appellate panel found that the defendants took intentional action inconsistent with a known right to arbitrate by repeatedly seeking a judicial decision on the merits, including moving to dismiss the entire complaint with prejudice under Fed. R. Civ. P. 12(b)(6). The panel further noted that, while the motions to dismiss were pending, the defendants engaged in months of litigation activity — including exchanging discovery materials, stipulating to deadline extensions, and filing a joint status report — without ever mentioning a right to compel arbitration. The panel found that this delay, followed by the defendants’ post-dismissal-ruling assertion that the case “must be referred to mandatory arbitration,” amounted to circumstantial evidence of an intentional relinquishment of the right to arbitrate. Accordingly, the panel affirmed the district court’s order.

In reaching this conclusion, the appellate panel rejected the defendants’ counterarguments, explaining that a party can act inconsistently with arbitration rights even without an express denial of that right, and that reserving the right to compel arbitration in an answer is not enough to defeat a finding of waiver. The panel also found that engaging in only minimal discovery did not alter the outcome, since courts weigh the totality of the circumstances rather than any single factor. Because the defendants waited roughly ten months to raise a right to compel arbitration while asserting repeatedly that the claims should be dismissed on the merits, the panel held that the delay supported a finding of waiver.