“Knowledge-Based Waiver” and the Party-Presentation Rule:
A Comprehensive Commentary on Andrew Berzanskis v. FCA US, LLC
(6th Cir. July 10, 2025)
1. Introduction
The Sixth Circuit’s published opinion in Andrew Berzanskis v. FCA US, LLC emerges from
multi-district litigation over alleged fire risks in Chrysler Pacifica minivans. Eighteen of the sixty-nine
named plaintiffs had unknowingly signed retail installment contracts that contained arbitration
agreements. After discovery revealed those clauses, the manufacturer (FCA) moved to compel only those
eighteen plaintiffs to individual arbitration. The district court sua sponte denied the motion, holding
that FCA had waived
its arbitration right by previously filing a Rule 12(b)(6) motion addressed to
the entire consolidated complaint.
On interlocutory appeal, the Sixth Circuit (Batchelder, J.) reversed. The panel crystallises two
doctrinal points of first impression in the Circuit—and, arguably, nationally—regarding arbitration
waiver and civil procedure:
- Knowledge-Based Waiver Rule. A litigant cannot implicitly waive the contractual right
to arbitrate unless it knew or had reason to know the right existed at the time of the alleged
inconsistent conduct. Mere industry custom or speculation about standard-form contracts is
insufficient.
- Strict Party-Presentation in Arbitration Motions. Absent truly exceptional
circumstances, district courts may not sua sponte invoke waiver (or forfeiture) to defeat a motion
to compel arbitration. Doing so violates the adversarial system and risks reversible error.
2. Summary of the Judgment
- The court reversed the district court’s order denying FCA’s motion to compel arbitration.
- It held that (a) waiver-through-litigation is presumptively a judicial question (not for the arbitrator)
and the purchase contracts did not clearly delegate it to arbitration; (b) waiver requires
knowledge of the right, which FCA lacked until it received the contracts in discovery; and
(c) the district court erred by raising waiver sua sponte, contravening the party-presentation
principle.
- The case was remanded for further proceedings consistent with the opinion; practically, the
eighteen plaintiffs will proceed to arbitration unless they can raise other contract formation
defences.
3. Analysis
3.1 Precedents Cited and Their Influence
The panel knit together Supreme Court, Sixth Circuit, and out-of-circuit authority to
re-calibrate waiver doctrine post-Morgan v. Sundance (U.S. 2022).
- JPD, Inc. v. Chronimed Holdings, 539 F.3d 388 (6th Cir. 2008): Establishes the presumption
that courts—not arbitrators—decide waiver based on litigation conduct. The panel relied on
JPD to reject FCA’s threshold argument that an arbitrator should decide.
- Rent-A-Center v. Jackson, 561 U.S. 63 (2010) & Howsam v. Dean Witter Reynolds,
537 U.S. 79 (2002): Supply the “
clear and unmistakable
” delegation standard. The Sixth
Circuit found the retail clauses’ reference to “arbitrability” too vague to shift waiver questions to
the arbitrator.
- Morgan v. Sundance, Inc., 596 U.S. 411 (2022): Abolished the requirement that the
non-movant show prejudice from delay before a finding of waiver. Berzanskis applies
Morgan but fills the doctrinal vacuum by emphasising knowledge instead of prejudice.
- American Locomotive Co. v. Chemical Research Corp., 171 F.2d 115 (6th Cir. 1948):
Early Sixth Circuit pronouncement that waiver cannot occur without
knowledge of [the] right’s
existence.
Berzanskis revives and elevates this vintage precedent.
- Solo v. UPS, 947 F.3d 968 (6th Cir. 2020) & Schwebke v. United Wholesale Mortgage,
96 F.4th 971 (6th Cir. 2024): Both involved waiver where the defendant possessed all
documents from the outset. The panel distinguished these cases because FCA lacked such
documents until discovery.
- Out-of-Circuit Cases: White v. Samsung (3d Cir. 2023), Smith v. GC Services
(7th Cir. 2018), and Hill v. Xerox (9th Cir. 2023) were cited by plaintiffs. The panel read them as
consistent with the “should have known” standard rather than dispensing with knowledge
entirely.
- Party-Presentation Authorities: Greenlaw v. United States, 554 U.S. 237 (2008);
Sineneng-Smith, 590 U.S. 371 (2020); Wood v. Milyard, 566 U.S. 463 (2012). Provide the
normative force for rebuking sua sponte waiver findings.
3.2 Legal Reasoning
- Who decides waiver?
• The presumption from JPD stands: courts decide waiver-through-litigation.
• Delegation requires express language. A generic reference to “arbitrability” is not enough.
- Elements of Waiver Post-Morgan.
The Sixth Circuit articulates two indispensable elements:
(a) Knowledge of an existing right to arbitrate; and
(b) Conduct inconsistent with reliance on that right.
Without element (a), element (b) cannot logically occur.
- Application to FCA.
• FCA lacked actual knowledge until May 2023.
• The district court’s assumption that FCA “must” have known was unsupported by evidence and
therefore clearly erroneous.
- Party-Presentation Violation.
• Waiver is an affirmative defence. Plaintiffs never raised it.
• No exceptional circumstance justified judicial intervention. Consequently, the district court
overstepped its role.
3.3 Impact on Future Cases
The opinion recalibrates arbitration litigation within the Sixth Circuit and offers guidance
nation-wide:
- Litigants’ Playbook. Defendants may safely litigate threshold motions—e.g., Rule 12(b)(6)
or MDL consolidation—while investigating whether arbitration clauses exist, without fearing
automatic waiver. The clock begins when they possess (or negligently fail to possess) the
contracts.
- Plaintiffs’ Strategy. Plaintiffs who seek to avoid arbitration must affirmatively plead and
prove waiver. Silence or tactical omission risks forfeiture of the argument.
- District Court Practice. Judges must solicit party input before denying arbitration on sua
sponte grounds. Failure to do so invites reversal and prolongs litigation, undermining the FAA’s
efficiency goals.
- National Dialogue. By foregrounding “knowledge” rather than “prejudice,”
Berzanskis supplies a doctrinal tool other circuits may adopt in reconciling Morgan.
Whether the Supreme Court will eventually endorse a knowledge-based approach remains to be
seen.
4. Complex Concepts Simplified
- Arbitration Clause
- A contractual provision requiring the parties to submit disputes to a private arbitrator
instead of a court.
- Waiver vs. Forfeiture
- Waiver = intentional relinquishment of a known right.
Forfeiture = failure to assert a right timely, sometimes unintentionally. The opinion uses the
term “waiver” for consistency, but notes the technical distinction.
- Delegation Clause
- A provision sending gateway issues (e.g., whether the arbitration agreement is valid) to the
arbitrator. It must be “clear and unmistakable.”
- Party-Presentation Principle
- The court decides only issues the parties raise, acting as a neutral umpire—not as an
advocate for either side.
- Clear-Error Review
- An appellate standard deferring to the trial court’s factual findings unless the appellate judges
are left with a “definite and firm conviction” that a mistake occurred.
5. Conclusion
Berzanskis v. FCA US delivers a robust, two-pronged precedent: waiver of arbitration requires
knowledge, and courts cannot conjure waiver on the parties’ behalf. In doing so, the Sixth Circuit
both reinforces the Federal Arbitration Act’s mandate for efficient resolution and safeguards the
adversarial structure of American adjudication. Practitioners must now pay closer attention to the
timing of their knowledge (or constructive knowledge) of arbitration clauses and be prepared to
litigate waiver explicitly—lest the issue be deemed abandoned. The opinion’s disciplined approach
to party autonomy and evidentiary support is likely to echo well beyond the automotive MDL from
which it arose, influencing arbitration jurisprudence in both federal and state courts nationwide.