UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT TERESA ARMSTRONG, No. 21-15397

Plaintiff-Appellant, D.C. No. 5:17-cv- 06540-LHK v. MICHAELS STORES, INC.; DOES, OPINION 1-100, inclusive,

Defendants-Appellees.

Appeal from the United States District Court for the Northern District of California Lucy H. Koh, District Judge, Presiding

Argued and Submitted July 26, 2022 San Francisco, California

Filed February 13, 2023

Before: M. Margaret McKeown and William A. Fletcher, Circuit Judges, and Richard D. Bennett, * District Judge.

Opinion by Judge McKeown * The Honorable Richard D. Bennett, United States District Judge for the District of Maryland, sitting by designation. 2 ARMSTRONG V. MICHAELS STORES, INC.

SUMMARY **

Arbitration

The panel affirmed the district court’s order compelling arbitration in an employment dispute between plaintiff and her employer Michael Stores, Inc. Plaintiff agreed to arbitrate any disputes regarding the terms and conditions of her employment, but when a dispute arose, she filed a complaint in federal district court. The district court ordered plaintiff to take her claims to arbitration, and the arbitrator ruled in favor of Michaels. Plaintiff argued that Michaels waited too long to move for arbitration and therefore waived its right to the arbitral forum. The panel held that the record did not establish that Michaels chose to forgo arbitration. Michaels repeatedly reserved its right to arbitration, did not ask the district court to weigh in on the merits, and did not engage in any meaningful discovery. Michaels did not actively litigate the merits of the case for a prolonged period to take advantage of being in court. Although Michaels did not immediately move to compel arbitration, its actions did not amount to a relinquishment of the right to arbitrate. Following the Supreme Court decisions in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), and Morgan v. Sundance, Inc., 142 S. Ct. 1708 (2022), the panel recognized that there was no longer a thumb on the scale in favor of arbitration, and that the party opposing arbitration no longer ** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. ARMSTRONG V. MICHAELS STORES, INC. 3

bore a “heavy burden” to show waiver of the right to arbitration. The panel held that, even with this lighter burden, plaintiff still failed to establish that Michaels acted inconsistently with exercising its right to arbitrate.

COUNSEL Thomas A. Segal (argued) and Shaun Setareh, Setareh Law Group, Beverly Hills, California, for Plaintiff-Appellant. Aileen M. McGrath (argued), and Michael J. Weisbuch, Akin Gump Strauss Hauer & Feld LLP, San Francisco, California; Gregory W. Knopp and Jonathan S. Christie, Akin Gump Strauss Hauer & Feld LLP, Los Angeles, California; for Defendants-Appellees. 4 ARMSTRONG V. MICHAELS STORES, INC.

OPINION McKEOWN, Circuit Judge:

Litigation in this case was bookended by two Supreme Court decisions on arbitration. In Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), the Court held that arbitration agreements requiring individual arbitration, not class or collective arbitration, are enforceable, and in Morgan v. Sundance, Inc., 142 S. Ct. 1708 (2022), the Court concluded that the Federal Arbitration Act restricts courts from creating arbitration-favoring procedural rules. These two cases inform our resolution of this appeal. Teresa Armstrong agreed to arbitrate any disputes regarding the terms and cond