A broad arbitration clause covering disputes arising out of or related to an agreement encompasses all claims having a significant relationship to the contract regardless of their legal label.
A party seeks to stay litigation pending arbitration based on a consulting agreement containing a broad arbitration clause. The district court denied the stay, finding the claims were not arbitrable because they were based on tort and quantum meruit theories rather than the contract itself. The court applies a de novo standard to determine arbitrability, holding that a broad clause covering disputes 'arising out of or related to' the agreement encompasses all disputes having a significant relationship to the contract, regardless of the legal label assigned to the claim. Because the claims relate to the agreement, the court finds no waiver occurred and reverses the denial of the stay.
At page 92 Determining arbitrability under the federal arbitration act42 citing cases“whether a party has agreed to arbitrate an issue is a matter of contract interpretation: 'a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.”
- Long v. Silver, 248 F.3d 309 (4th Cir. 2001).published (We agree with CTI that the standard in Mediterranean Enterprises was an improper foundation for the district court's decision.)
- Fruth, Inc. v. OptumRX, Inc., No. 2:25-cv-00751 (S.D. W. Va. Sept. 28, 2026).“the supreme court has announced its healthy regard for the federal policy favoring arbitration.”
- Jackson v. Velocity Investments, LLC, No. 8:25-cv-00087 (D. Md. July 30, 2025).“the 'heavy presumption of arbitrability requires that when the scope of the arbitration clause is open to question, a court must decide the question in favor of arbitration.”
- Duncan v. Riverside Health & Rehab. LLC, No. 2:23-cv-00780 (S.D. W. Va. May 23, 2024).“the supreme court has announced its healthy regard for the federal policy favoring arbitration.”
- Lee Sartin Trucking, Inc. v. Se. Land, LLC, No. 2:22-cv-00326 (S.D. W. Va. Dec. 8, 2022).“the supreme court has announced its healthy regard for the federal policy favoring arbitration.”
- Hays v. Equitex, Inc. (In re RDM Sports Grp., Inc.), 260 B.R. 905 (Bankr. N.D. Ga. 2001).published“when the scope of the arbitration clause is open to question, a court must decide the question in favor of arbitration”
- McCutcheon, No. 2:24-cv-00620 (S.D. W. Va. Jan. 14, 2026). Because the Plaintiff’s claim arises out of or relates to the purchase of a product—the solar panel system—provided by a third party—Design 1—and such purchase is connected to the Plaintiff’s loan, it cannot “be said with positive assuranc…
- Smith v. Walmart Inc., No. 7:22-cv-00568, 2023 WL 5215376 (W.D. Va. Aug. 14, 2023).Corp., 460 U.S. 1 , 20 n.23 (1983)). “[T]he decision to stay the litigation of non-arbitrable claims or issues is a matter largely within the district court’s discretion to control its docket.” Am. Recovery Corp., 96 F.3d at 97.
- Diana Mey v. Directv, LLC, 971 F.3d 284 (4th Cir. 2020).published We have characterized such provisions as “broad arbitration clauses capable of an expansive reach,” Am. Recovery Corp., 96 F.3d at 93, and have construed them to cover “disputes that do not arise under the governing contract when a ‘signif…
- Masters v. KOL, Inc., 846 S.E.2d 893 (S.C. Ct. App. 2020).published Recovery, 96 F.3d at 94).
Show 32 more citing cases
- Dome Tech., LLC v. Golden Sands Gen. Contractors, Inc., 257 F. Supp. 3d 735 (W.D. Va. 2017).publishedRecovery Corp., 96 F.3d at 94; see also Gen.
- Evans v. Bldg. Materials Corp. of Am., 858 F.3d 1377 (Fed. Cir. 2017).published Recovery, 96 F.3d at 92-93).
- Mansfield v. Vanderbilt Mortg. & Fin., Inc., 29 F. Supp. 3d 645 (E.D.N.C. 2014).publishedRecovery Corp., 96 F.3d at 92.
- Pressler v. Duke Univ., 685 S.E.2d 6 (N.C. Ct. App. 2009).publishedComputerized Thermal Imaging, Inc., 96 F.3d 88, 92 (4th Cir. 1996) (quoting Peoples Sec.
- Trimless-Flashless v. Thomas & Betts Corp, No. 00-1572 (4th Cir. Oct. 23, 2000).unpublished
- Gen. Elec. Capital Corp. v. Union Corp. Fin. Grp., 142 F. App'x 150 (4th Cir. 2005).unpublished
- United States v. Bankers Ins. Co., 245 F.3d 315 (4th Cir. 2001).published
- Burlington Ins. v. Trygg-Hansa Ins., 9 F. App'x 196 (4th Cir. 2001).unpublished
- Lucy R. Chapman v. H & R Block Mortg. Corp., No. E2005-00082-COA-R3-CV, 2005 WL 3159774 (Tenn. Ct. App. Nov. 28, 2005).published
- Amchem Prods., Inc. v. Newport News Circuit Court Asbestos Cases, 563 S.E.2d 739 (Va. 2002).published
- Joy Mcvey Porter v. Money Tree Fin. Corp. Ii, No. 2001-01142-COA-R3-CV (Tenn. Ct. App. Oct. 15, 2001).published
- Pyburn v. Bill Heard Chevrolet, 63 S.W.3d 351 (Tenn. Ct. App. 2001).published
- Porter Hayden Co. v. Century Indem. Co., 939 F. Supp. 424 (D. Md. 1996).published
- Blumenthal-Kahn Elec. Ltd. P'ship v. Am. Home Assurance Co., 236 F. Supp. 2d 575 (E.D. Va. 2002).published
- Newman ex rel. Wallace v. First Atl. Resources, 170 F. Supp. 2d 585 (M.D.N.C. 2001).published
- Millar v. Reliastar Life Ins., 157 F. Supp. 2d 645 (W.D.N.C. 2000).published
- Monk v. Perdue Farms Inc., 12 F. Supp. 2d 508 (D. Md. 1998).published
- Pitchford v. Oakwood Mobile Homes, Inc., 124 F. Supp. 2d 958 (W.D. Va. 2000).published
- Dempsey v. Transouth Mortg. Corp., 88 F. Supp. 2d 482 (W.D.N.C. 1999).published
- Goetsch v. Shell Oil Co., 197 F.R.D. 574 (W.D.N.C. 2000).published
- Hasco, Inc. v. Schuyler, Roche & Zwirner, 981 F. Supp. 445 (S.D. W. Va. 1997).published
- Waypoint Mgmt. Consulting, LLC v. Krone, No. 1:19-cv-02988 (D. Md. Mar. 18, 2020).
- Elisabeth Lenes v. Loral Langemeier, No. 11-1012 (4th Cir. July 29, 2011).unpublished
- Sutton v. Hollywood Ent. Corp., 181 F. Supp. 2d 504 (D. Md. 2002).published
- Lenes v. Langemeier, 441 F. App'x 208 (4th Cir. 2011).unpublished
- United States for the use & benefit of CONCREATE, INC. v. S.B. Ballard Constr. Co., No. 2:20-cv-00293 (E.D. Va. Aug. 9, 2021).
- McCumbee v. M Pizza, Inc., No. 3:22-cv-00128, 2023 WL 2725991 (N.D. W. Va. Mar. 30, 2023).
- Lawhun v. CMH Homes, Inc., No. 1:22-cv-00112 (N.D. W. Va. Aug. 16, 2023).
- Dye v. Santander Consum. USA Inc., No. 1:23-cv-00045, 2024 WL 251148 (N.D. W. Va. Jan. 23, 2024).
- Pennington v. Design 1 Grp., LLC, No. 2:24-cv-00030 (N.D. W. Va. May 9, 2025).
- Waterfront Fam. Pharmacy LLC v. OptumRX, Inc., No. 1:25-cv-00029 (N.D. W. Va. Mar. 31, 2026).
- Waterfront Fam. Pharmacy LLC v. OptumRX, Inc., No. 4:26-cv-00487 (E.D. Mo. Mar. 31, 2026).
At page 93 Determining scope of arbitration clause under significant relationship33 citing casesholding that when the proof of the claim is rooted in the existence or terms of the agreement, the agreement is significantly related to the claim
- Long v. Silver, 248 F.3d 309 (4th Cir. 2001).published See American Recovery, 96 F.3d at 92 ("We agree with CTI that the standard in Mediterranean Enterprises was an improper foundation for the district court's decision.").
- Gannett Fleming, Inc. v. Corman Const., 243 Md. App. 376 (Md. Ct. Spec. App. 2019).published“the broad arbitration clause . . . rendered arbitrable all disputes having a significant relationship to the consulting agreement regardless of whether those claims implicated the terms of the consulting agreement.”
- Hunt v. Debt Assistance Network, LLC, No. 1:18-cv-00644, 2019 WL 4647008 (M.D.N.C. Sept. 24, 2019).“the district court erred in concluding that plaintiff's claims did not fall within the scope of the arbitration agreement because they did not turn upon the interpretation of the terms of the . . . agreement.”
- Think Tank, Inc. v. ITegrity, Inc., No. 8:22-cv-01587 (D. Md. June 9, 2023). Am. Recovery Corp., 96 F.3d at 93.
- Diana Mey v. Directv, LLC, 971 F.3d 284 (4th Cir. 2020).published We have characterized such provisions as “broad arbitration clauses capable of an expansive reach,” Am. Recovery Corp., 96 F.3d at 93, and have construed them to cover “disputes that do not arise under the governing contract when a ‘signif…
- Masters v. KOL, Inc., 846 S.E.2d 893 (S.C. Ct. App. 2020).published Recovery, 96 F.3d at 94).
- Stone v. Wells Fargo Bank, N.A., 361 F. Supp. 3d 539 (D. Md. 2019).publishedRecovery , 96 F.3d at 93 (alteration omitted) (quoting J.J.
- In re Giant Eagle, Inc., No. 05-15-01292-CV (Tex. App.—Dallas Oct. 23, 2015).published(significant relationship” to the contract)
- Landers v. Fed. Deposit Ins., 739 S.E.2d 209 (S.C. 2013).published Recovery, 96 F.3d at 94.
- Great Am. Ins. Co. v. Hinkle Contracting Corp., 497 F. App'x 348 (4th Cir. 2012).unpublishedAccording to Hinkle, the district court should have examined the scope of the arbitration clause under the “significant relationship” test used by this Court in American Recovery Corp. v. Computerized Thermal Imaging, Inc., 96 F.3d 88, 93…
Show 23 more citing cases
- Griggs v. Evans, 43 A.3d 1081 (Md. Ct. Spec. App. 2012).published In that case, after entering into a joint venture to install thermal imaging equipment in hospitals in China, Computerized Thermal Imaging, Inc. (“CTI”), contracted with American Recovery Corporation (“ARC”), a consulting firm, “to provide…
- Hall v. Stark Reagan, PC, 818 N.W.2d 367 (Mich. Ct. App. 2011).publishedCiting American Recovery Corp v Computerized Thermal Imaging, Inc, 96 F3d 88, 93-94 (CA 4, 1996), the court in Seifert announced that “the test for determining arbitrability of a particular claim under a broad arbitration provision is whet…
- Mintz & Fraade, P.C. v. Beta Drywall Acquisition, LLC, 59 So. 3d 1173 (Fla. 4th DCA 2011).publishedRecovery Corp., 96 F.3d at 93.
- United States Sur. Co. v. Hanover R.S. Ltd. P'ship, 543 F. Supp. 2d 492 (W.D.N.C. 2008).published (broadly interpreting agreement to arbitrate any dispute “arising out of or related to” the agreement)
- Gen. Elec. Capital Corp. v. Union Corp. Fin. Grp., 142 F. App'x 150 (4th Cir. 2005).unpublished
- Wachovia Bank v. Schmidt, 445 F.3d 762 (4th Cir. 2006).published
- Nature's 10 Jewelers v. Gunderson, 2002 S.D. 80, 648 N.W.2d 804.published
- Ramon Pacheco & Assoc. v. Betancourt Castellon Assoc., 820 So. 2d 948 (Fla. 3d DCA 2002).published
- Seifert v. US Home Corp., 750 So. 2d 633 (Fla. 1999).published
- Parfi Holding AB v. Mirror Image Internet, Inc., 817 A.2d 149 (Del. 2002).published
- Bass v. SMG, Inc., 765 N.E.2d 1079 (Ill. App. Ct. 1st Dist. 2002).published
- Associated Air Freight, Inc. v. Meek, 67 S.W.3d 249 (Tex. App.—Houston [1st Dist.] 2001).published
- Hou-Scape, Inc. v. Lloyd, 945 S.W.2d 202 (Tex. App.—Houston [1st Dist.] 1997).published
- Hammaker v. Brown & Brown, Inc., 214 F. Supp. 2d 575 (E.D. Va. 2002).published
- Brown v. Citifinancial, Inc., 414 F. Supp. 2d 561 (D.S.C. 2006).published
- Gatx Mgmt. Servs., LLC v. Weakland, 171 F. Supp. 2d 1159 (D. Colo. 2001).published
- Hyde v. Rda, Inc., 389 F. Supp. 2d 658 (D. Md. 2005).published
- Trex Co. v. ExxonMobil Oil Corp., 234 F. Supp. 2d 572 (E.D. Va. 2002).published
- Hersman, Inc. v. Fleming Companies, Inc., 19 F. Supp. 2d 1282 (M.D. Ala. 1998).published
- Lovey v. Régence BlueShield of Idaho, 72 P.3d 877 (Idaho 2003).published
- Ahern v. Toll Bros., 55 Va. Cir. 18 (Fairfax Cir. Ct. 2001).published
- Suntrust Sec., Inc. v. Marable, 64 Va. Cir. 293 (Charlottesville Cir. Ct. 2004).published
- Sutton v. Hollywood Ent. Corp., 181 F. Supp. 2d 504 (D. Md. 2002).published
At page 95 Assessing prejudice and waiver in arbitration agreements25 citing casesBecause of the strong federal policy favoring arbitration, . . . we will not lightly infer the circumstances constituting waiver.
- Growtech Partners v. Accenture LLP, 118 F. Supp. 3d 920 (S.D. Tex. 2015).published([W]e must analyze the relationship between the claim- and the agreement without regard to ‘the legal label assigned to the claim.’)
- Microstrategy, Inc. v. Betty J. Lauricia, & Claude David Convisser Stacey A. Spoltore John Doe, Equal Emp. Opportunity Comm'n,amicus Curiae. Betty J. Lauricia v. Microstrategy, Inc., & Stacey A. Spoltore John Doe, Equal Emp. Opportunity Comm'n, Amicus Curiae, 268 F.3d 244 (4th Cir. 2001).published(Because of the strong federal policy favoring arbitration, . . . we will not lightly infer the circumstances constituting waiver.)
- Long v. Silver, 248 F.3d 309 (4th Cir. 2001).published See American Recovery, 96 F.3d at 92 ("We agree with CTI that the standard in Mediterranean Enterprises was an improper foundation for the district court's decision.").
- Cabot Oil & Gas & Cranberry Pipeline v. Beaver Coal Co., No. 16-0904 & 16-0905, 2017 WL 5192490 (W. Va. Nov. 9, 2017).published“because of the strong federal policy favoring arbitration, . . . we will not lightly infer the circumstances constituting waiver.”
- Reagoso v. USAA Gen. Indem. Co., No. 1:24-cv-01159 (D. Md. Nov. 12, 2024).Am. Recovery Corp., 96 F.3d at 95.
- Thompson v. Allstate Corp., No. 1:22-cv-02379 (D. Md. June 25, 2024).“bears the heavy burden of proving waiver”
- Mid Atl. Restaurant Corp. v. Gumby 1105, Inc., No. 5:20-cv-00472 (E.D.N.C. Aug. 19, 2021).Recovery, 96 F.3d at 95. b.
- Optical Mechanics, Inc. v. Cybioms Corp., No. 8:20-cv-01947 (D. Md. Feb. 9, 2021).However, in Cain, the motion to compel was filed in state court under the Maryland Uniform Arbitration Act, while this is a federal case involving an agreement subject to the FAA, and federal law requires a showing of actual party opposing…
- Citibank, N.A. v. Perry, 797 S.E.2d 803 (W. Va. 2016).published“[b]e-cause of the strong federal policy favoring arbitration, ... [courts] will not lightly infer the circumstances constituting waiver”
- United States ex rel. TBI Investments, Inc. v. BrooAlexa, LLC, 119 F. Supp. 3d 512 (S.D. W. Va. 2015).publishedRecovery Corp., 96 F.3d at 95 (finding that the plaintiffs quantum meruit claim was significantly related to the agreements containing an arbitration provision where the plaintiffs claim relied on “the terms of the ... agreement,” “a prior…
Show 14 more citing cases
- Elliott v. Kb Home North Carolina, Inc., 2012 NCBC 55 (N.C. Bus. Ct. 2012).publishedRecovery Corp., 96 F.3d at 95). [35] The North Carolina Supreme Court has recognized that a party waives its right to compel arbitration if it acts inconsistently with arbitration, and the party opposing arbitration can show it has been pr…
- Griggs v. Evans, 43 A.3d 1081 (Md. Ct. Spec. App. 2012).published In that case, after entering into a joint venture to install thermal imaging equipment in hospitals in China, Computerized Thermal Imaging, Inc. (“CTI”), contracted with American Recovery Corporation (“ARC”), a consulting firm, “to provide…
- C.B. Fleet Co. v. Aspen Ins. UK Ltd., 743 F. Supp. 2d 575 (W.D. Va. 2010).published Recovery Corp., 96 F.3d at 95), on the basis of either express or implied waiver.
- Shoosmith Bros. v. Hopewell Nursing Home, L.L.C., 78 Va. Cir. 427 (Hopewell Cir. Ct. 2009).published“Because of the strong federal policy favoring arbitration, however, we will not lightly infer the circumstances constituting waiver”
- Forrester v. Penn Lyon Homes, Inc., 553 F.3d 340 (4th Cir. 2009).publishedRecovery Corp., 96 F.3d at 95.
- Brown v. Green Tree Servs., LLC, 585 F. Supp. 2d 770 (D.S.C. 2008).published(Resp. in Opp’n at 16.) Plaintiff, as the party opposing arbitration, “‘bears the heavy burden of proving waiver.’ ” MicroStrategy, Inc. v. Lauricia, 268 F.3d 244, 250 (4th Cir.2001) (quoting American Recovery Corp. v. Computerized Thermal…
- Karnette v. Wolpoff & Abramson, L.L.P., 444 F. Supp. 2d 640 (E.D. Va. 2006).published Recovery Corp., 96 F.3d at 95.
- Hasco, Inc. v. Schuyler, Roche & Zwirner, 981 F. Supp. 445 (S.D. W. Va. 1997).published
- Patten Grading & Paving, Inc. v. Skanska USA Bldg., Inc., 380 F.3d 200 (4th Cir. 2004).published
- Commonwealth Equity Servs., Inc. v. Messick, 831 A.2d 1144 (Md. Ct. Spec. App. 2003).published
- Frank v. Am. Gen. Fin., Inc., 23 F. Supp. 2d 1346 (S.D. Ala. 1998).published
- Am. Reliable Ins. v. Stillwell, 212 F. Supp. 2d 621 (N.D. W. Va. 2002).published
- Lauricia v. MicroStrategy Inc., 114 F. Supp. 2d 489 (E.D. Va. 2000).published
- MicroStrategy, Inc. v. Lauricia, 268 F.3d 244 (4th Cir. 2001).published
At page 97 District court discretion in staying non-arbitrable claims17 citing cases“the decision to stay the litigation of non-arbitrable claims or issues is a matter largely within the district court's discretion to control its docket.”
- Simpson Unlimited, Inc. v. Whiting-Turner Contracting Co., No. 1:19-cv-01400 (D. Md. July 18, 2019).([T]he decision to stay the litigation of non-arbitrable claims or issues is a matter largely within the district court’s discretion to control its docket.)
- Narragansett Elec. Co. v. Constellation Energy Commodities Grp., Inc., 563 F. Supp. 2d 325 (D.R.I. 2008).published(Enforcement of agreements to arbitrate under the Federal Arbitration Act may require piecemeal litigation ... and the decision to stay the litigation of non-arbi-trable claims or issues is a matter largely within the d…)
- Hetrick Companies LLC v. IINK, Corp., 710 F. Supp. 3d 467 (E.D. Va. 2024).publishedThe “decision to stay the litigation of non-arbitrable claims or issues is [left to] the district court’s discretion.” Am. Recovery Corp., 96 F.3d at 97; see Moses H.
- Smith v. Walmart Inc., No. 7:22-cv-00568, 2023 WL 5215376 (W.D. Va. Aug. 14, 2023).Corp., 460 U.S. 1 , 20 n.23 (1983)). “[T]he decision to stay the litigation of non-arbitrable claims or issues is a matter largely within the district court’s discretion to control its docket.” Am. Recovery Corp., 96 F.3d at 97.
- Drake v. Chop Hosp., LLC, No. 1:20-cv-01574, 2021 WL 1088276 (N.D. Ill. Mar. 22, 2021).However, the defendant in Halim sought to dismiss the entire complaint on the basis of a binding arbitration clause and the Seventh Circuit treats the issue of “whether to stay the entire case as discretionary in cases involving both arbit…
- Chorley Enter., Inc. v. Dickey's Barbecue Restaurants, Inc., 807 F.3d 553 (4th Cir. 2015).publishedRecovery Corp., 96 F.3d at 97, so we leave it to the district court to decide this matter in the first instance on remand.
- C.B. Fleet Co. v. Aspen Ins. UK Ltd., 743 F. Supp. 2d 575 (W.D. Va. 2010).published Recovery Corp., 96 F.3d at 95), on the basis of either express or implied waiver.
- Creative Telecomm., Inc. v. Breeden, 120 F. Supp. 2d 1225 (D. Haw. 1999).published
- Choice Hotels Int'l, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707 (4th Cir. 2001).published
- Choice Hotels Int'l, Inc. v. Patel, 236 F. App'x 868 (4th Cir. 2007).unpublished
Show 7 more citing cases
- Choice Hotels Intl v. BSR Tropicana Resort, No. 00-2507 (4th Cir. June 8, 2001).published
- Jones v. Halliburton Co., 625 F. Supp. 2d 339 (S.D. Tex. 2008).published
- United States ex rel. MPA Constr., Inc. v. XL Specialty Ins., 349 F. Supp. 2d 934 (D. Md. 2004).published
- Dalton v. Dow Chem. Co., No. 2:18-cv-01494 (S.D. W. Va. June 10, 2019).
- Davis v. BMW Fin. Servs. NA, LLC, No. 1:24-cv-01804 (D. Md. Nov. 26, 2024).
- Clark v. Appalachian Power Co., No. 2:24-cv-00424 (S.D. W. Va. Feb. 25, 2025).
- Brogan v. Vanderbilt Mortg. & Fin., Inc., No. 2:25-cv-00386 (S.D. W. Va. Sept. 19, 2025).
At page 94 Determining scope of arbitration clause under significant relationship test10 citing casesthe test for an arbitration clause of this breadth is not whether a claim arose under one agreement or another, but whether a significant relationship exists between the claim and the agreement containing the arbitration clause
- Dale Supply Co. v. York Int'l Corp, No. M2002-01408-COA-R3-CV, 2003 WL 22309461 (Tenn. Ct. App. Oct. 9, 2003).published (the test for an arbitration clause of this breadth is not whether a claim arose under one agreement or another, but whether a significant relationship exists between the claim and the agreement containing the arbitrati…)
- Think Tank, Inc. v. ITegrity, Inc., No. 8:22-cv-01587 (D. Md. June 9, 2023). Am. Recovery Corp., 96 F.3d at 93.
- Masters v. KOL, Inc., 846 S.E.2d 893 (S.C. Ct. App. 2020).published Recovery, 96 F.3d at 94).
- Dome Tech., LLC v. Golden Sands Gen. Contractors, Inc., 257 F. Supp. 3d 735 (W.D. Va. 2017).publishedRecovery Corp., 96 F.3d at 94; see also Gen.
- Wilson v. Willis, 786 S.E.2d 571 (S.C. Ct. App. 2016).publishedRecovery, 96 F.3d at 94).
- Landers v. Fed. Deposit Ins., 739 S.E.2d 209 (S.C. 2013).published Recovery, 96 F.3d at 94.
- Griggs v. Evans, 43 A.3d 1081 (Md. Ct. Spec. App. 2012).published In that case, after entering into a joint venture to install thermal imaging equipment in hospitals in China, Computerized Thermal Imaging, Inc. (“CTI”), contracted with American Recovery Corporation (“ARC”), a consulting firm, “to provide…
- Gen. Elec. Capital Corp. v. Union Corp. Fin. Grp., 142 F. App'x 150 (4th Cir. 2005).unpublished
- Parfi Holding AB v. Mirror Image Internet, Inc., 817 A.2d 149 (Del. 2002).published
- P&P Indus., Inc. v. Sutter Corp., 179 F.3d 861 (10th Cir. 1999).published
At page 96 Evaluating prejudice to plaintiff regarding arbitration waiver11 citing casesevaluating prejudice to plaintiff when considering timeliness of affirmative defense of arbitration
- Smith v. Ironworks Dev., LLC, No. 3:22-cv-00020 (W.D. Va. Oct. 14, 2022).Recovery Corp., 96 F.3d at 96 (internal quotations omitted)).
- Ortiz v. Wilmington Sav. Fund Soc'y, FSB, No. 2:18-cv-01129 (S.D. W. Va. Aug. 1, 2019).(evaluating prejudice to plaintiff when considering timeliness of affirmative defense of arbitration)
- Karnette v. Wolpoff & Abramson, L.L.P., 444 F. Supp. 2d 640 (E.D. Va. 2006).published Recovery Corp., 96 F.3d at 95.
- Patten Grading & Paving, Inc. v. Skanska USA Bldg., Inc., 380 F.3d 200 (4th Cir. 2004).published
- Vincent L. Pryner, Counterclaim v. Tractor Supply Co., Counterclaim Eugene Sobierajski v. Thoesen Tractor & Equip. Co., 109 F.3d 354 (7th Cir. 1997).published
- Sloan Fin. Grp., Inc. v. Beckett, 583 S.E.2d 325 (N.C. Ct. App. 2003).published
- State ex rel. Barden & Robeson Corp. v. Hill, 539 S.E.2d 106 (W. Va. 2000).published
- Goldsmith v. Pinez, 84 F. Supp. 2d 228 (D. Mass. 2000).published
- Creative Telecomm., Inc. v. Breeden, 120 F. Supp. 2d 1225 (D. Haw. 1999).published
- Brinkley v. Harbour Rec. Club, 180 F.3d 598 (4th Cir. 1999).published
At page 90 Determining arbitrability of disputes under contract4 citing casesenforcing arbitration clause that provided that "[a]ny dis- pute, controversy or claim arising out of or related to this . . . Agree- ment shall be resolved by binding arbitration"(emphasis omitted)
- Diana Mey v. Directv, LLC, 971 F.3d 284 (4th Cir. 2020).published We have characterized such provisions as “broad arbitration clauses capable of an expansive reach,” Am. Recovery Corp., 96 F.3d at 93, and have construed them to cover “disputes that do not arise under the governing contract when a ‘signif…
- Griggs v. Evans, 43 A.3d 1081 (Md. Ct. Spec. App. 2012).published In that case, after entering into a joint venture to install thermal imaging equipment in hospitals in China, Computerized Thermal Imaging, Inc. (“CTI”), contracted with American Recovery Corporation (“ARC”), a consulting firm, “to provide…
- Trimless-Flashless v. Thomas & Betts Corp, No. 00-1572 (4th Cir. Oct. 23, 2000).unpublished
- Gen. Elec. Capital Corp. v. Union Corp. Fin. Grp., 142 F. App'x 150 (4th Cir. 2005).unpublished
At page 91 Determining the scope of the government's search authority6 citing casesShortly after the negotiation with EDS, Secord resigned as a director and officer of ARC and entered into a personal services agreement with CTI. Pursuant to…
- Griggs v. Evans, 43 A.3d 1081 (Md. Ct. Spec. App. 2012).published In that case, after entering into a joint venture to install thermal imaging equipment in hospitals in China, Computerized Thermal Imaging, Inc. (“CTI”), contracted with American Recovery Corporation (“ARC”), a consulting firm, “to provide…
- Int'l Bhd. of Elec. Workers, Local 26 v. Advin Elec., Inc., 98 F.3d 161 (4th Cir. 1996).published
- Smith Barney, Inc. v. Critical Health Sys. of North Carolina, Inc., 212 F.3d 858 (4th Cir. 2000).published
- Technosteel, LLC v. Beers Constr. Co., 271 F.3d 151 (4th Cir. 2001).published
[T]he Supreme Court has announced its healthy regard for the federal policy favoring arbitration.
- Fruth, Inc. v. OptumRX, Inc., No. 2:25-cv-00751 (S.D. W. Va. Sept. 28, 2026).([T]he Supreme Court has announced its healthy regard for the federal policy favoring arbitration.)
- Duncan v. Riverside Health & Rehab. LLC, No. 2:23-cv-00780 (S.D. W. Va. May 23, 2024).([T]he Supreme Court has announced its healthy regard for the federal policy favoring arbitration.)
- Lee Sartin Trucking, Inc. v. Se. Land, LLC, No. 2:22-cv-00326 (S.D. W. Va. Dec. 8, 2022).([T]he Supreme Court has announced its healthy regard for the federal policy favoring arbitration.)
The ‘heavy presumption of arbitrability requires that when the scope of the arbitration clause is open to question, a court must decide the question in favor of arbitration.’
- Jackson v. Velocity Investments, LLC, No. 8:25-cv-00087 (D. Md. July 30, 2025).(The ‘heavy presumption of arbitrability requires that when the scope of the arbitration clause is open to question, a court must decide the question in favor of arbitration.’)
- Hays v. Equitex, Inc. (In re RDM Sports Grp., Inc.), 260 B.R. 905 (Bankr. N.D. Ga. 2001).published(when the scope of the arbitration clause is open to question, a court must decide the question in favor of arbitration)
v.
COMPUTERIZED THERMAL IMAGING, INCORPORATED; David B. Johnston, Defendants-Appellants, and Richard v. Secord; Looper, Reed, Mark, and McGraw, Incorporated; Donald R. Looper; Fluor-Daniel, Incorporated, Defendants
Vacated and remanded by published opinion. Judge WILLIAMS wrote the opinion, in which Judge MURNAGHAN and Judge MOTZ joined.
OPINION
WILLIAMS, Circuit Judge:Computerized Thermal Imaging, Incorporated, and David B. Johnston (collectively, CTI) appeal from the district court’s denial of their motion for a stay pending arbitration. Relying on Mediterranean Enterprises v. Ssangyong, 708 F.2d 1458 (9th Cir.1983), the district court held that American Recovery Corporation’s (ARC) claims against CTI neither arose out of nor related to the consulting agreement that contained the arbitration clause upon which CTI based its motion. Concluding that the district court used the improper legal standard for determining whether ARC’S claims were arbitrable, we hold that ARC’s claims against CTI relate to the consulting agreement. Accordingly, we vacate the district court’s order denying CTI’s motion for a stay pending arbitration and remand the case to the district court for further proceedings.
I.
CTI was a member of a consortium of business firms that formed a joint venture for the purpose of installing thermal imaging, hospital services, and related medical technology in a network among the hospitals and medical centers in the Peoples Republic of China. CTI retained ARC, a corporation that specializes in facilitating national and international transactions and joint ventures, to provide assistance in seeking the services of a professional communications engineering firm for the project.
ARC and CTI memorialized their compact in a consulting agreement. The agreement provided that ARC would introduce representatives of a professional communications engineering firm to CTI or another member of the consortium with the ultimate goal of persuading the engineering firm to provide its services to the consortium in conjunction with the China venture. In addition to the consulting agreement with CTI, ARC entered into noneircumvention agreements with two engineering firms, Fluor-Daniel and Parsons Engineering, which prevented those engineering firms from negotiating with the consortium except through ARC. In the consulting agreement, CTI acknowledged the existence of the noncircumvention agreements and agreed not to enter into any agreements with engineering firms except in compliance with the consulting agreement and the noncircumvention agreements. Additionally, the consulting agreement contained an arbitration clause that provided that “[a]ny dispute, controversy, or claim arising out of or related to this Consulting Agreement shall be resolved by binding arbitration.” (J.A. at 132.)
The consulting agreement was later amended to provide incentives to ARC to secure funding for the China project through the sale of medical identification cards. Finding itself in need of additional financing, CTI requested that ARC enter negotiations with Electronic Data Systems (EDS) to contribute capital in addition to systems management and systems integration services for the China project. Through the efforts of ARC, CTI obtained the capital it sought from EDS. Although Richard V. Secord, director, president, and one-third shareholder of ARC, informed ARC that he was negotiating with CTI for an amendment to the consulting agreement to compensate ARC for these efforts, ARC alleges that it never received compensation from CTI.
[*91] Shortly after the negotiation with EDS, Secord resigned as a director and officer of ARC and entered into a personal services agreement with CTI. Pursuant to that agreement, Secord assisted CTI in obtaining a letter of intent from Fluor-Daniel to assist in the China project, which ARC alleges is in violation of the noncircumvention and consulting agreements.
In July 1995, CTI filed a declaratory judgment action in the United States District Court for the Southern District of Texas seeking to have the court declare that Se-eord’s personal services agreement with CTI did not violate the terms of his stockholder’s agreement with ARC and that CTI owed no compensation to ARC under the consulting agreement. On CTI’s motion, that lawsuit was dismissed for lack of jurisdiction before responsive pleadings were due from ARC. In September 1995, CTI refiled an identical lawsuit in the same district; ARC successfully moved the district court to dismiss this suit, again on jurisdictional grounds, before any discovery had taken place.
Later that month, ARC filed a ten-count complaint in the United States District Court for the Eastern District of Virginia against CTI, Secord, a law firm that formerly represented ARC (Looper, Reed, Mark, and McGraw), and Donald R. Looper, the lawyer who negotiated Seeord’s personal services agreement with CTI. On November 1, CTI filed a notice of arbitration pursuant to the arbitration clause of the consulting agreement for the three claims [1] ARC asserted against it: (1) that CTI induced Seeord’s breach of his fiduciary duty to ARC; (2) that CTI induced Fluor-Daniel’s breach of the noncircumvention agreement; and (3) under a theory of quantum meruit, that CTI owed ARC compensation for securing financing from EDS for the China venture. Also on November 1, CTI filed a motion to dismiss ARC’s Virginia complaint for lack of personal jurisdiction and improper venue. The district court later denied this motion.
After receiving notice of the arbitration filing on November 10, ARC informed CTI and the arbitrators of its intent not to participate in the arbitration proceedings and, on November 22, filed its first discovery requests in the Virginia action. On December 6, CTI answered ARC’s complaint, raising arbitration as an affirmative defense, and filed a motion pursuant to the Federal Arbitration Act to stay proceedings pending arbitration, see 9 U.S.C.A § 3 (West 1970) (providing for a stay of proceedings in the district court upon any issue which is referable to arbitration under a written arbitration agreement). After the district court denied the motion to stay, reasoning that ARC’s claims were not within the scope of the arbitration clause, CTI timely filed this appeal, see 9 U.S.CA. § 16(a)(1)(A) (West Supp. 1996) (“An appeal may be taken from an order refusing a stay of any action under section 3 of this title_”).
Before us, CTI raises three issues: (1) whether the district court erred in denying CTI’s motion to stay proceedings pending arbitration; (2) if we determine that the district court erred in denying the stay, whether CTI waived its right to the stay pending arbitration; and (3) if we determine that the district court erred in denying the stay and that CTI did not waive its right to that stay, whether we should remand this case to the district court with the direction to stay the non-arbitrable claims pending the resolution of the arbitration proceedings. We address each of CTI’s contentions in turn.
II.
CTI contends that the district court erred in denying its motion to stay proceedings pending arbitration. In contesting the ruling of the district court, CTI argues that the district court incorrectly concluded that the claims ARC asserts did not fall within the scope of the arbitration clause of the consulting agreement. We review de novo the district court’s conclusions regarding the arbitrability of the disputes between ARC and CTI. See Kansas Gas & Elec. Co. v. Westinghouse Elec. Corp., 861 F.2d 420, 422 (4th Cir.1988). After briefly reviewing the governing principles that guide a court in[*92] determining whether a dispute is arbitrable, we find that the district court applied the incorrect legal standard in reaching its decision and conclude that each of ARC’s claims falls within the scope of the arbitration clause of the consulting agreement.
A.
Whether a party has agreed to arbitrate an issue is a matter of contract interpretation: “[A] party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960). Nevertheless, the Supreme Court has announced its “healthy regard for the federal policy favoring arbitration” and has explained that the Federal Arbitration Act, 9 U.S.C.A. §§ 1-16 (West 1970 & Supp.1996), “establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone Memorial Hosp. v. Mercury Constr. Co., 460 U.S. 1, 24-25, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983). To that end, “the heavy presumption of arbitrability requires that when the scope of the arbitration clause is open to question, a court must decide the question in favor of arbitration.” Peoples Sec. Life Ins. Co. v. Monumental Life Ins. Co., 867 F.2d 809, 812 (4th Cir.1989). Thus, we may not deny a party’s request to arbitrate an issue “unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” Warrior & Gulf Navigation Co., 363 U.S. at 582-83, 80 S.Ct. at 1353. Having established our principles for review, we turn to CTI’s arguments.
B.
As an initial matter, CTI contends that the district court applied an improper legal standard in concluding that ARC’s three claims against CTI did not fall within the scope of the arbitration clause in the consulting agreement. Relying on the Ninth Circuit’s decision in Mediterranean Enterprises, the district court reasoned that the tortious-in-terference-with-eontraet claim and the in-dueement-of-breach-of-fiduciary-duty claim did not arise out of or relate to the consulting agreement because the claims sounded in tort rather than contract and because the resolution of the claims in no way turned upon the interpretation of the terms of the consulting agreement. See Mediterranean Enters., 708 F.2d at 1464 (holding that a tortious interference claim did not fall within the scope of an arbitration clause because the claim “allege[d] activity and raise[d] issues which [were] predominantly unrelated to the central conflict over the interpretation and performance of the Agreement” containing the arbitration clause). Regarding the quantum meruit claim, the district court again relied on Mediterranean Enterprises in finding that ARC’s claim did not fall within the scope of the arbitration clause. The district court held that ARC’s quantum meruit claim by its very definition arose outside the scope of the consulting agreement. See id. at 1464-65 (holding that a quantum meruit claim could not arise out of a contract containing ah arbitration clause because “[a]n action does not lie on an implied contract where there exists between the parties a valid express contract which covers the identical subject matter”).
We agree with CTI that the standard in Mediterranean Enterprises was an improper foundation for the district court’s decision. In Mediterranean Enterprises, the Ninth Circuit construed the scope of a clause in a joint venture agreement that provided: “ ‘Any disputes arising hereunder or following the formation of joint venture shall be settled through binding arbitration.’ ” Id. at 1461 (emphasis added) (quoting the arbitration clause in part). The court found that the phrase “arising hereunder” was synonymous with “arising under the Agreement^]” a phrase that had previously been construed to be “ ‘relatively narrow as arbitration clauses go.’ ” Id. at 1464 (quoting Sinva, Inc. v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 253 F.Supp. 359, 364 (S.D.N.Y.1966)). The court then concluded that the clause limited the arbitration of disputes to those that “relat[ed] to the interpretation and per-[*93] formanee of the contract itself[,]” noting that this formulation was much narrower than “the arising out of or relating to” standard recommended by the American Arbitration Association. Id. Thus, the Ninth Circuit explicitly held that the tortious interference and quantum meruit claims were not arbitra-ble in the presence of a narrow arbitration clause, the scope of which was limited to disputes relating to the interpretation and performance of the contract containing the arbitration clause itself.
In contrast, ARC and CTI agreed through the arbitration clause in the consulting agreement to arbitrate any dispute that “arfóse] out of or related to ” the consulting agreement. (J.A. at 132.) Both the Supreme Court and this court have characterized similar formulations to be broad arbitration clauses capable of an expansive reach. See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 398, 87 S.Ct. 1801, 1803, 18 L.Ed.2d 1270 (1967) (labelling as “broad” a clause that required arbitration of “[a]ny controversy or claim arising out of or relating to this Agreement”); J.J. Ryan & Sons v. Rhone Poulenc Textile, S.A., 863 F.2d 315, 321 (4th Cir.1988) (after declaring that the scope of a clause providing for the arbitration of “[a]ll disputes arising in connection with” a contract was identical to that of a clause providing for the arbitrability of disputes that “may arise out of or in relation to” an agreement, construing the arbitration clause “to encompass a broad scope of arbi-trable issues” (alteration in original)). In J.J. Ryan & Sons, we distinguished narrow arbitration clauses that required only the arbitration of claims arising under the contract and we explained that the sweeping language of a similarly broad arbitration clause “d[id] not limit arbitration to the literal interpretation or performance of the contract [, but] embrace[d] every dispute between the parties having a significant relationship to the contract regardless of the label attached to the dispute.” Id. (emphasis added).
Because the broad arbitration clause negotiated by ARC and CTI rendered arbitrable all disputes having a significant relationship to the consulting agreement regardless of whether those claims implicated the terms of the consulting agreement, the district court erred in concluding that ARC’s claims did not fall within the scope of the arbitration agreement because they did not turn upon the interpretation of the terms of the consulting agreement. Thus, the district court employed an improper legal standard in determining whether ARC’s claims against CTI were arbitrable.
Consequently, we must now determine whether the arbitration clause in the consulting agreement encompasses the disputes between ARC and CTI, applying the proper legal standard by examining the significance of the relationship between each of ARC’s claims and the consulting agreement. See id. In applying this standard, we “must determine whether the factual allegations underlying the claim are within the scope of the arbitration clause, regardless of the legal label assigned to the claim.” Id. at 319. Bearing in mind the strong federal policy in favor of arbitration and the broad nature of this arbitration clause, we examine each of ARC’s claims seriatim.
1.
In its first claim against CTI, ARC contends that CTI tortiously induced Se-cord’s breach of fiduciary duty by secretly negotiating the personal services agreement with Secord. In its complaint, ARC asserts that Secord’s personal services agreement with CTI “was a continuation of the services ARC was already providing to CTI under the CTI Consulting Agreement[ because b]oth the CTI Consulting Agreement and the Personal Services Agreement ... essentially require the services of a ‘liaison’ between CTI and other participants in the China Project, including the engineers.” (J.A at 24-25.) In effect, ARC contends that CTI, through the personal services agreement, induced Se-cord to misappropriate a corporate opportunity that rightly belonged to ARC.
We agree with CTI that ARC’s claim significantly relates to the consulting agreement and is thus arbitrable. To prove that the benefits accruing to Secord under the personal services agreement were a corporate opportunity, ARC must prove that it had “a[*94] legitimate interest or expectancy in ... a particular business opportunity.” See, e.g., Alexander v. Sturkie, 909 S.W.2d 166, 169 (Tex.Ct.App.1995); 3 Beth A. Buday & Gail A. O’Gradney, Fletcher Cyclopedia of the Law of Private Corporations § 861.10 (perm, ed. rev.vol.1994) (“[T]he doctrine of corporate opportunity ... prohibits one who occupies a fiduciary relationship to a corporation from acquiring, in opposition to the corporation, property in which the corporation has an interest or tangible expectancy_”). To establish that it had a legitimate interest, ARC posits in its complaint that the personal services agreement encompasses its obligations under the consulting agreement in addition to other duties that are a logical extension of the services provided by ARC under the consulting agreement. To strengthen its claim, ARC asserts that “[t]he compensation under the Personal Services Agreement is compensation for work ARC was already performing under the CTI Consulting Agreement.” (J.A. at 28.) Therefore, the proof of ARC’s claim that CTI induced Seeord to breach his fiduciary duty is rooted in the existence and terms of the consulting agreement.
ARC argues that its claim regarding CTI’s inducement of Secord’s breach of fiduciary duty is not related to the consulting agreement because the personal services agreement would have breached Secord’s duty of loyalty even without the existence of the consulting agreement. This contention, although arguably plausible given the appropriate factual circumstances, is belied by ARC’s clear reliance on the consulting agreement to establish its claim in the complaint; thus, we reject it. ARC further argues that we should not find the claim to be arbitrable because the parties did not intend for the arbitration clause to be this broad. Athough ARC is correct in noting that the intention of the parties is relevant, the intentions of parties to an arbitration agreement are generously construed in favor of arbitrability, see Peoples Sec. Life Ins. Co., 867 F.2d at 813, and here, ARC and CTI explicitly agreed on an arbitration clause that by its plain language has a broad scope. Because the factual allegations underlying ARC’s claim fall within the scope of the consulting agreement’s arbitration clause, we hold that the district court erred in finding this claim not to be arbitrable.
2.
In its second claim against CTI, ARC contends that CTI tortiously interfered with its contractual relationship with Fluor-Daniel by inducing Fluor-Daniel to breach its non-circumvention agreement with ARC. ARC alleges that Fluor-Daniel breached the non-circumvention agreement by agreeing to provide project management services and a financing commitment to CTI for the China project without compensating ARC for its release from the noncircumvention agreement as agreed. In the consulting agreement, CTI had expressly promised “not [to] enter any agreements with [Fluor-Daniel] except in compliance with [the] Noncircumvention Agreement ] and this Consulting Agreement.” (J.A. at 21 (second alteration in original).)
ARC’s claim of tortious interference with contractual relations clearly relates to the consulting agreement: An express term of the consulting agreement mandates that CTI will not enter into any agreement with Fluor-Daniel in violation of the noncircum-vention agreement. Thus, the conduct of which ARC complains explicitly contravenes a term of the consulting agreement.
ARC attempts to minimize this relationship by pointing out that its claim arises under the noncircumvention agreement, not the consulting agreement. We find this argument unpersuasive: As explained above, the test for an arbitration clause of this breadth is not whether a claim arose under one agreement or another, but whether a significant relationship exists between the claim and the agreement containing the arbitration clause. See J.J. Ryan & Sons, 863 F.2d at 321. Because we find such a relationship clearly exists here, we hold that ARC’s tortious interference claim is properly referable to arbitration.
3.
In its third claim against CTI, ARC contends that it is entitled to compensation[*95] from CTI for securing a financing commitment from EDS for the China project. ARC alleges a prior pattern of compensation in which CTI requested that ARC find additional funding for the China project, ARC secured that funding, and then CTI compensated ARC for its efforts through an amendment to the consulting agreement. Furthermore, ARC alleges in its complaint that “Secord told ARC that he ... w[as] negotiating another amendment to the CTI Consulting Agreement which would provide compensation to ARC for its efforts to secure funding for the China Project from EDS.” (J.A. at 23.)
As with ARC’s first and second claims, we likewise find that ARC’s quantum meruit claim relates to the consulting agreement: ARC again clearly relies on the terms of the consulting agreement to prove its claim. To establish its entitlement to compensation, ARC relies on a prior amendment to the consulting agreement as well as its allegation that Secord informed ARC that its efforts in securing the EDS funding would be compensated through the vehicle of an amendment to the consulting agreement, as had been done before.
In urging us to find that the quantum meruit claim does not relate to the consulting agreement, ARC argues, as the district court held, that a quantum meruit claim by its definition arises outside of the consulting agreement. As we have explained, however, a claim may arise outside of an agreement and yet still be related to that agreement; we must analyze the relationship between the claim and the agreement without regard to “the legal label assigned to the claim.” See J.J. Ryan & Sons, 863 F.2d at 319. Because we find that ARC’s quantum meruit claim is sufficiently related to the consulting agreement as to fall within the scope of the arbitration clause, we hold that the district court erred in not referring it to arbitration. Having concluded that ARC’s claims against CTI fell within the scope of the arbitration clause in the consulting agreement, we must next consider whether CTI has waived its right to a stay pending arbitration.
III.
ARC contends that even if its claims against CTI were arbitrable under the consulting agreement, CTI waived its right to invoke the Federal Arbitration Act by filing the two Texas declaratory judgment actions and by failing in the Virginia action to raise arbitration as an affirmative defense in a timely manner. [2] See 9 U.S.C.A § 3 (providing that a party with an arbitrable claim may apply for a stay of the trial of that action if “the applicant for the stay is not in default in proceeding with such arbitration”). Because we find that CTI has not so substantially utilized the litigation machinery as to prejudice ARC, we decline to hold that CTI waived its right to arbitration.
Under the Federal Arbitration Act, “[a] litigant may waive its right to [arbitration] by so substantially utilizing the litigation machinery that to subsequently permit arbitration would prejudice the party opposing the stay.” Maxum Foundations, Inc. v. Salus Corp., 779 F.2d 974, 981 (4th Cir.1985). Because of the strong federal policy favoring arbitration, however, we will not lightly infer the .circumstances constituting waiver. Id. Our key inquiry is whether the party opposing the stay has suffered any actual prejudice. Id. at 982. Although “mere delay, without more, will not suffice to constitute waiver,” id., “delay and the extent of the moving party’s trial-oriented activity are material factors in assessing a plea of prejudice,” Fraser v. Merrill Lynch Pierce, Fenner & Smith, Inc., 817 F.2d 250, 252 (4th Cir.1987). The party opposing the stay bears the heavy burden of proving waiver. Britton v. Co-op Banking Group, 916 F.2d 1405, 1412 (9th Cir.1990).
[*96] ARC first contends that CTI waived its right to arbitration by filing the consecutive, identical declaratory judgment actions in the United States District Court for the Southern District of Texas. We disagree. ARC is unable to state how it was prejudiced by CTI’s filing of the declaratory judgment actions. Neither ARC nor CTI ever initiated discovery in either action, and we cannot consider CTI’s defense to ARC’s motion to dismiss in the second action to be a “ ‘substantia^ ] invocation] [of] the litigation machinery,’ which would support a finding of waiver.” See Marlin Oil Corp. v. Colorado Interstate Gas Co., 700 F.Supp. 1076, 1081 (W.D.Okla.1988) (holding that defense to motion to dismiss declaratory judgment action insufficient to waive right to arbitration) (alterations in original) (quoting E.C. Ernst, Inc. v. Manhattan Constr. Co., 559 F.2d 268, 269 (5th Cir.1977), cert. denied, 434 U.S. 1067, 98 S.Ct. 1246, 55 L.Ed.2d 769 (1978)). Without more, CTI’s mere filing of the declaratory judgment actions in the Southern District of Texas does not constitute legally sufficient prejudice for CTI to have waived its rights to arbitration. See Carolina Throwing Co. v. S & E Novelty Corp., 442 F.2d 329, 330-31 (4th Cir.1971) (per curiam) (holding that filing of a counterclaim alone is insufficient to waive right to arbitration; prejudice must be proven); Marlin Oil Corp., 700 F.Supp. at 1081.
Next, ARC argues that by failing to raise arbitration as an affirmative defense in the Eastern District of Virginia until December 6,1995, ARC experienced sufficient prejudice that CTI should be held to have waived its right to arbitration. ARC contends that by the time CTI raised arbitration as a defense, ARC had already expended considerable efforts in serving discovery requests on all parties. ARC asserts that it was further prejudiced after CTI raised arbitration as an affirmative defense because CTI “vigorously pursued full discovery from ARC” after its motion to stay was denied. Appellee’s Brief at 15.
We cannot accept ARC’S arguments: CTI’s conduct in the Eastern District of Virginia is not legally sufficient to constitute a default of its arbitration rights under the Federal Arbitration Act. Although CTI did not raise arbitration as an affirmative defense until after ARC had served discovery requests, ARC received notice that CTI intended to pursue arbitration when ARC received a notice on November 10 from the arbitration authority. By the time it propounded its first discovery requests on November 22, ARC had known for nearly two weeks that CTI planned to pursue arbitration of the claims and also that ARC had not yet filed its answer, the pleading where the affirmative defense of arbitration must be raised, see Fed.R.Civ.P. 8(c) (providing that arbitration is required to be raised as an affirmative defense in the answer). Under these circumstances, we cannot find that CTI waived its right to arbitration. See Maxum Foundations, Inc., 779 F.2d at 982-83 (holding that defendant had not waived its right to arbitrate when it did not raise arbitration as an affirmative defense in its answer, it delayed three months after the complaint to file a motion to dismiss because of arbitrability, and it filed the motion to dismiss after discovery had been initiated in the action). Regarding the alleged prejudice suffered by ARC because of CTI’s pursuit of discovery after the district court denied its motion to stay pending arbitration, we observe that a “party seeking arbitration does not lose its contractual right by prudently pursuing discovery in the face of a court-ordered deadline.” Id. at 982 (“declin[ing] to create a rule that would require a party seeking arbitration to avoid a finding of default by ignoring court ordered discovery deadlines and assuming the risk that its motion under the Federal Arbitration Act will be unsuccessful”). Thus, we hold that ARC has failed to carry its burden of proving that CTI’s actions constituted a default of its right to arbitrate under the Federal Arbitration Act. ARC’S claims against CTI therefore are subject to arbitration.
IV.
Finally, ARC and CTI disagree on whether the non-arbitrable claims remaining before the district court should be stayed pending the resolution of the arbitration proceedings. CTI contends that we should stay the entire[*97] action before the district court because many of the issues underlying the arbitrable claims are the same as those underpinning the non-arbitrable claims, and allowing arbitration to proceed and staying the district court action would preserve judicial resources by narrowing the issues eventually set for trial. ARC responds with the opposite contention: Because a trial would conclude before the completion of the arbitration proceedings, the trial should continue. A trial would narrow the issues and potentially obviate the need for arbitration, ARC argues.
We believe that the answer to this question lies within the sound discretion of the district court. Enforcement of agreements to arbitrate under the Federal Arbitration Act may require piecemeal litigation, see Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221, 105 S.Ct. 1238, 1242-43, 84 L.Ed.2d 158 (1985), and the decision to stay the litigation of non-arbitrable claims or issues is a matter largely within the district court’s discretion to control its docket, Moses H. Cone Mem. Hosp., 460 U.S. at 20 n. 23, 103 S.Ct. at 939 n. 23; Summer Rain v. Donning Co./Publishers, Inc., 964 F.2d 1455, 1461 (4th Cir.1992). Therefore, we leave this issue for the district court to resolve on remand.
V.
In summary, we hold that the district court erred in denying CTI’s motion for a stay pending arbitration because ARC’S claims fall within the scope of the consulting agreement’s arbitration clause and CTI has not waived its rights to arbitration through its utilization of the litigation machinery. We remand for further proceedings not inconsistent with this opinion and for a determination by the district court of whether to stay the non-arbitrable claims pending resolution of the arbitration proceedings.
VACATED AND REMANDED.
. The parties to the lawsuit do not dispute that the other seven claims, lodged by ARC against Secord, Looper, and the law firm, do not fall within the scope of the arbitration clause and are thus not arbitrable.
. Because the district court concluded that ARC’s claims against CTI were not arbitrable, it did not rule on whether CTI had waived its right to arbitration. In any event, because a district court’s ruling on waiver under the Federal Arbitration Act is subject to de novo review, Fraser v. Merrill Lynch Pierce, Fenner & Smith, Inc., 817 F.2d 250, 252 (4th Cir.1987), we may reach this issue, see Maxum Foundations, Inc. v. Salus Corp., 779 F.2d 974, 981-83 (4th Cir.1985) (reaching waiver issue not ruled on by the district court after concluding that the district court erred in holding that the plaintiff’s claims were not arbitrable).