## Facts

- Customers purchased UPS “declared value” coverage for shipments made before December 30, 2013 under UPS’s then-effective tariff/terms.
- The tariff stated there was no additional charge for the first $100 of coverage, but UPS allegedly charged $0.85 per $100 increment, including the first $100, resulting in systematic overcharges.
- Plaintiffs filed a putative class action alleging contract-based overcharging.
- UPS moved to dismiss on the merits, arguing the tariff language authorized the challenged charge; it included a sentence purporting to reserve a right to seek arbitration.
- The court of appeals previously reversed dismissal, holding the tariff was at least ambiguous, and remanded.
- After remand, UPS pleaded arbitration as an affirmative defense, participated in months of discovery, and then moved to compel arbitration based on UPS terms amended effective December 30, 2013, which added an arbitration clause.
- The district court denied the motion to compel, concluding the amended terms did not apply to the pre-amendment shipments and that UPS waived arbitration through its litigation conduct.

## Issues

1. Whether UPS’s December 30, 2013 amended terms containing an arbitration clause governed claims arising from shipments made under earlier UPS terms.
2. If the amended terms applied, whether UPS waived any right to compel arbitration by substantially invoking federal litigation and prejudicing plaintiffs.

## Decision

- The court of appeals affirmed the order denying UPS’s motion to compel arbitration.
- The arbitration clause in the amended terms did not apply retroactively to the pre–December 30, 2013 shipments that generated the dispute.
- Even assuming the arbitration clause could apply, UPS waived arbitration by pursuing merits-based litigation (including a dispositive motion and an appeal), participating in discovery after remand, and only then seeking arbitration.
- UPS’s unilateral “reservation of rights” statement in its motion to dismiss did not prevent a waiver finding given UPS’s overall conduct.

## Legal Principles

- Arbitration is a matter of contract; absent clear contractual language, later-added arbitration clauses do not bind parties as to completed transactions or disputes arising under earlier terms.
- A party waives arbitration by acting inconsistently with an intent to arbitrate and causing prejudice to the opposing party through litigation-related time, expense, or strategic disadvantage.
- Boilerplate reservations asserting no waiver are not dispositive; courts evaluate waiver based on objective litigation conduct as a whole.

## Conclusion

The Sixth Circuit held that UPS could not compel arbitration because the arbitration clause adopted after the relevant shipments did not govern the dispute, and UPS’s extensive merits litigation and delay independently constituted waiver, leaving the case to proceed in federal court.


Solo v. United Parcel Serv. Co., 947 F.3d 968 (6th Cir. 2020)