You Cannot "Reserve" the Right to Arbitrate

In an opinion released yesterday by the Minnesota Court of Appeals, a very interesting procedural issue was addressed.

A prominent Minneapolis law firm brought a motion to dismiss a complaint against its client based on a claimed lack of merit. In so doing, the firm stated in its motion papers that it was, on its client's behalf, reserving the right to require arbitration. The contract at issue included a mandatory arbitration clause for disputes.

The motion failed, as would be expected. Later then, the firm brought a motion to compel arbitration. That is, the motion was to close the district court case and require the dispute to be arbitrated. Despite the prior effort to reserve the right to require arbitration, the district court held, and the court of appeals affirmed, that by bringing the motion to dismiss that moving party, through its lawyers, had waived the right to arbitration.

If you are in Washington, Ramsey, Hennepin, or Chisago counties, call me to assess your litigation and whether district court is a better option than arbitration. You don't want to make the mistake made above.

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