Morgan v. Sundance, Inc.

Summary

The Supreme Court, unanimously in an opinion by Justice Kagan, held that the Eighth Circuit erred in conditioning a waiver of the contractual right to arbitrate on a showing of prejudice. Assuming without deciding that loss of the right is assessed as a matter of federal waiver law, the Court reasoned that the FAA's 'policy favoring arbitration' places arbitration agreements on the same footing as other contracts rather than fostering arbitration, and so does not license arbitration-specific procedural rules. Section 6 of the FAA, directing that arbitration applications be 'made and heard in the manner provided by law' for other motions, confirms that the ordinary federal waiver rule—without a prejudice element—governs. The Court vacated the judgment below, leaving for remand whether Sundance knowingly relinquished its right to arbitrate or whether a framework such as forfeiture applies.