5-Star General Store v. American Express Company
Split Score
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Case Summary
Disposition
Affirmed
The First Circuit held that American Express waived— and therefore defaulted on—its contractual right to compel arbitration by repeatedly refusing to pay AAA filing fees, causing the arbitrations to be administratively closed. Because Amex was in default under 9 U.S.C. § 3, the court affirmed the district court’s denial of Amex’s motion to stay the litigation and compel arbitration.
Circuit Split Identified
Legal Issue
Whether a party’s non-payment of arbitration filing fees presents a question for the court (as waiver/default) or for the arbitrator under the FAA.
Circuit Positions
Non-payment of arbitration fees is a litigation-related waiver/default that the court must decide.
Non-payment of arbitration fees is a procedural matter for the arbitrator to decide.
Conflict Summary
The First and Tenth Circuits treat a party’s failure to pay contractually-required arbitration fees—when that conduct halts the arbitral process—as a litigation-related waiver/default that a court must decide before compelling arbitration. The Fifth Circuit, by contrast, characterizes the same fee-payment dispute as a procedural question that the arbitrator, not a court, must resolve.