In In re Toyota Motor Corp. Hybrid Brake Marketing, Sales, Practices and Products Liability Litigation, No. 8:10-ML-02172, 2011 WL 6189467 (C.D. Cal. Dec. 13, 2011), the court held that any right the defendant had to compel arbitration of class action claims was waived when the defendant failed to move to compel promptly and instead continued to litigate the claims. Rejecting the defendant’s assertion that it did not have a known existing right to arbitrate prior to the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), which interpreted class action waivers in certain arbitration agreements to be enforceable, the court noted that the defendant had asserted the right to arbitrate as an affirmative defense in its answer before the Supreme Court issued its decision. After the Supreme Court’s decision was issued, the defendant continued to litigate the action for an additional six months. The court found that the plaintiffs would suffer prejudice if the belated motion to compel arbitration were granted, as they had devoted substantial resources to a litigation strategy in federal court.
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Defendant’s right to arbitration deemed waived by litigating claims.
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