n Barnett v. American Express National Bank, 24-CA-60391 (5th Cir. 7/29/2025), the U.S. Fifth Circuit reaffirmed that a waiver of the right to arbitrate by “substantially invoking the judicial process” requires a showing that the party litigates a “specific claim” the party subsequently seeks to arbitrate. That claims have the same operative facts is insufficient.
In November 2016, cardholder Barnett began disputing charges to her American Express Business Gold Rewards account as fraudulent, refusing to pay the charges. In May 2019, American Express filed suit against Barnett in state court seeking to collect the unpaid balance. The suit was later dismissed for American Express’s failure to prosecute.
In August 2020, Barnett sued American Express under the Fair Credit Reporting Act (FCRA) for failing to perform a reasonable investigation of the disputed charges, among other claims. American Express removed the case to the Southern District of Mississippi and moved to compel arbitration.
Barnett opposed the arbitration motion, arguing American Express’s prior suit waived any right it had to force Barnett to arbitrate her current claims. The District Court denied American Express’s motion to compel arbitration because the “state court action mirrors the claim Barnett wage[d] against American Express” and the parties merely “dispute[] whether she owes the sum.”
The Fifth Circuit reversed, relying on its 2021 decision in Forby v. One Technologies, LP, 13 F.4th 460 (5th Cir. 2021). In Forby, the Court held that “[f]or waiver purposes, a party only invokes the judicial process to the extent it litigates a specific claim it subsequently seeks to arbitrate.” 14 F.4th at 465 (emphasis in original)(quotations omitted).
Same Facts Does Not Equal Same Claim
In this case, American Express did not substantially invoke the judicial process on Barnett’s FCRA claim by suing Barnett to collect the debt. The Fifth Circuit concluded that American Express’s generic breach of contract claim under Mississippi law was “undoubtedly a different claim” than Barnett’s FCRA claim and “[j]ust because the two claims involve the same factual predicate – Barnett’s debt – does not mean they are the same.”
Barnett’s contention that Forby did not bar her suit was unpersuasive. Barnett argued that whether she owed the money would have resolved American Express’s claim and was a threshold issue for her FCRA claim because accuracy of the debt is a complete defense. The Fifth Circuit found that this theory does not survive Forby’s rejection of the idea that a claim is any allegation stemming from the same nucleus of operative facts. While both claims involve the same facts to establish an element or an affirmative defense, this does not satisfy Forby’s “same claim” rule.
Creditors Can Litigate Collection of Debts Without Waiving Arbitration
Barnett reaffirms that creditors can file suit to collect unpaid debts without losing the right to demand arbitration for other claims. So long as a party does not assert a claim in court and attempt to later assert the same claim in arbitration, courts in the Fifth Circuit should maintain contractual arbitration provisions.
