Margaret Palcko v. Airborne Express, Inc

PRECEDENTIAL
UNITED STATES COURT OF
APPEALS FOR THE THIRD CIRCUIT
No. 03-2227
MARGARET PALCKO
v.
AIRBORNE EXPRESS, INC.,
Appellant
On Appeal from the United States
District Court
for the Eastern District of Pennsylvania
(D.C. No. 02-cv-02990)
District Judge: Hon. Thomas N. O’Neill,
Jr.
Argued January 12, 2004
Before: SLOVITER, RENDELL, and
ALDISERT, Circuit Judges
(Filed: June 18, 2004)
Sharon M . Erwin (Argued)
Law Offices of Sharon M. Erwin, LLC
Philadelphia, PA 19129
Attorney for Appellant
David L. DaCosta (Argued)
Joseph J. McAlee
Sprague & Sprague
Philadelphia, PA 19103
Attorneys for Appellee
OPINION OF THE COURT
SLOVITER, Circuit Judge.
The principal questions before us
on this appeal are the scope of the
exclusion from the Federal Arbitration Act
(“FAA”), 9 U.S.C. §§ 1-16 (2004), for a
“class of workers engaged in foreign or
interstate commerce” and the preemptive
effect, if any, of the statutory exclusion.
I.
Defendant Airborne Express, Inc.
(“Airborne”) appeals from the District
Court’s order dated April 23, 2003
denying Airborne’s motion to compel
arbitration of plaintiff Margaret Palcko’s
claims under Title VII of the Civil Rights
Act of 1964 (“Title VII”), 42 U.S.C. §
2000e (2004), and the Pennsylvania
Human Relations Act, 43 Pa. Cons. Stat.
Ann. §§ 951-963 (2004). Airborne
contends that Palcko is required to
arbitrate her claims pursuant to a
contractual arbitration agreement based on
the FAA and Washington state law. Its
appeal challenges the District Court’s
rulings that Palcko, as a transportation
worker engaged in interstate commerce, is
excluded from the FAA’s coverage, and
that this FAA exemption preempts
enforcement of Palcko’s arbitration

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a g r e e m e n t w i t h A i r b o rn e u n d e r
Washington state law.
II.
A i r b o r n e i s a p a c k a g e
transportation and delivery company that
engages in intrastate, interstate, and
international shipping. It began employing
Palcko as a Field Services Supervisor in
Philadelphia in 1998. Palcko’s duties
included supervising between thirty and
thirty-five drivers who delivered packages
from Airborne’s facility near the
Philadelphia International Airport to their
ultimate destinations in the Philadelphia
area, and picked up packages from
customers in the Philadelphia area and
brought them back to Airborne’s facility
for shipment. Palcko monitored and
improved the performance of the drivers
under her supervision to ensure timely and
efficient delivery of packages.
When Palcko was hired, she agreed
to enter into a “M utual Agreement to
Arbitrate Claims” with Airborne. The
relevant portions of the Agreement, which
covers “all claims,” provides:
Except as provided in this
Agreement, the Federal
Arbitration Act shall govern
t h e i n t e r p r e t a t i o n ,
e n f o r c e m e n t a n d a l l
proceedings pursuant to this
Agreement. To the extent
that the Federal Arbitration
A c t i s i n a p p l i c a b l e ,
Washington law pertaining
to agreements to arbitrate
shall apply.
App. at 19.
According to Palcko, once she
began performing her duties at Airborne
she encountered immediate resistance and
hostility from the drivers under her
supervision. She alleges that other
Airborne employees falsely accused her of
sexual misconduct, verbally and physically
intimidated her during work, created a
hostile work environment through sexist
remarks, spread offensive rumors about
her sex life and moral character through
Airborne’s internal communications
system, and generally discriminated
against her because of her gender. Pl.’s
Compl. at 3-7. Palcko contends that
Airborne did not meaningfully investigate
and address these incidents, which she
reported to the company management.
According to Palcko, when her immediate
supervisor, Michael Matey, told her in the
presence of others during a March 5, 2001
meeting that “[m]aybe you don’t belong in
this industry” and “[m]aybe you should
just leave,” she left the meeting and never
returned to her position at Airborne. Pl.’s
Compl. at 7. Airborne denies all Palcko’s
f a c t u a l a l l e g a t io n s o f c o m p a n y
wrongdoing. Def.’s Answer at 3-6.
Palcko filed a charge against
Airborne with the Equal Employment
Opportunity Commission on May 31,
2001, seeking administrative remedies for
her allegations under Title VII, 42 U.S.C.
§ 2000e-5. After 180 days elapsed without
a finding by the Commission on Palcko’s
charge against Airborne, she requested a
Dismissal and Notice of Rights from the
Commission. 42 U.S.C. § 2000e-5(f)(1).

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The Commission issued the Dismissal and
Notice, thereby exhausting Palcko’s
administrative remedies and allowing her
to seek judicial recourse.
Palcko filed a complaint against
Airborne in the District Court for the
Eastern District of Pennsylvania on May
20, 2002 under Title VII and the
Pennsylvania Human Relations Act. After
the parties resolved issues unrelated to this
appeal pertaining to the service of process,
Airborne filed a motion to compel
arbitration of Palcko’s claims under the
parties’ arbitration agreement. The
District Court denied Airborne’s motion
on April 24, 2003, holding that Palcko’s
employment contract is “excluded from the
coverage of the FAA because of the nature
of her work.” App. at 14, 17-18. The
court also found that the exclusionary
effect of the FAA preempts alternative
enforcement of the arbitration contract
under Washington state law, as such
enforcement “would directly conflict with
Congress’s express purpose” of exempting
a certain class of workers “from a federal
law otherwise favoring arbitration.” App.
at 18. Airborne now appeals from the
District Court’s order.
III.
A. The Federal Arbitration Act
1. Jurisdiction
The District Court had subject
matter jurisdiction over Palcko’s Title VII
claim under 28 U.S.C. §§ 1331, 1343. The
FAA, 9 U.S.C. § 16(a), provides for
appellate jurisdiction over Airborne’s
appeal from the District Court’s order
denying its motion to compel arbitration.1
Brayman Constr. Corp. v. Home Ins. Co.,
319 F.3d 622, 624-25 (3d Cir. 2003).
Palcko contends, however, that because
the District Court found Palcko’s
employment contract to be exempt from
the FAA, we have no jurisdiction to
review that court’s denial of Airborne’s
motion to compel arbitration under 9
U.S.C. § 16(a), which is a section of the
FAA. Appellee’s Br. at 1.
1 9 U.S.C. § 16(a) states:
(a) An appeal may be taken from–
(1) an order–
(A) refusing a stay of any
action under section 3 of
this title,
(B) denying a petition
under section 4 of this title
to order arbitration to
proceed,
(C) denying an application
under section 206 of this
title to compel arbitration,
(D) confirming or denying
confirmation of an award
or partial award, or
(E) modifying, correcting,
or vacating an award;
(2) an interlocutory order
granting, continuing, or
modifying an injunction
against an arbitration that is
subject to this title; or
(3) a final decision with
respect to an arbitration
that is subject to this title.

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Palcko’s contention is without
merit. We have held in Sandvik AB v.
Advent International Corporation, 220
F.3d 99 (3d Cir. 2000), that the FAA’s
provision for interlocutory appeals of
orders denying motions to compel
arbitration clearly endows us with
appellate jurisdiction even in instances
when the validity of the underlying
contract to arbitrate is in doubt, as in
Palcko’s case with respect to the
arbitration agreement’s reference to the
FAA. See id. at 100 (stating that the
FAA’s “plain language contemplates
interlocutory appeals from orders” denying
arbitration because of questions related to
the validity of the underlying contract, and
that “other parts of the statute evince clear
Congressional intent that challenges to
refusals to compel arbitration be promptly
reviewed by appellate courts”).
Acceptance of Palcko’s argument
would create the curious situation in which
either all district courts’ orders denying
arbitration based on section 1’s exemption
clause would be beyond appellate review,
which contradicts section 16(a)’s plain
language, or the determination of our
appellate jurisdiction would be contingent
on the outcome of our review of the merits
of the District Court’s finding on the
exemption question, which is precisely
what we are barred from doing in the
absence of appellate jurisdiction. As we
stated in Sandvik, “The more natural
reading [of Section 16(a) is] to treat all
orders declining to compel arbitration as
reviewable.” Id. at 103. No appellate
court has held to the contrary.
Our jurisdiction over the District
Court’s order here, therefore, is clear.
2. Exemption Under Section 1 of
the FAA
Section 1 of the FAA provides:
. . . [N]othing herein
contained shall apply to
contracts of employment of
seamen, railroad employees,
or any other class of
workers engaged in foreign
or interstate commerce.
9 U.S.C. § 1.
In Circuit City Stores, Inc. v.
Adams, 532 U.S. 105 (2001), the Supreme
Court considered the scope of this
exemption from the FAA. The employer
in that case, Circuit City, sought to compel
arbitration as provided for in its
employment contracts. The Ninth Circuit
held that arbitration was not appropriate
because section 1 of the FAA exempts
from its coverage all employment
contracts. The Supreme Court reversed,
rejecting the Ninth Circuit’s expansive
reading of section 1. The Court noted that
“[m]ost Courts of Appeals conclude the
exclusion provision is limited to
transportation workers, defined, for
instance, as those workers ‘actually
engaged in the movement of goods in
interstate commerce.’” Id. at 112 (citing
Cole v. Burns Int’l Security Servs., 105
F.3d 1465, 1471 (D.C. Cir. 1997)).
Looking to the statutory language, the
Court applied the interpretation maxim of
ejusdem generis and read the words “any

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other class of workers engaged in . . .
commerce,” as giving “effect to the terms
‘seamen’ and ‘railroad employees.’”
Circuit City, 532 U.S. at 115. The Court
held that the residual phrase “any other
class of workers engaged . . . in interstate
commerce” should “be controlled and
defined by reference to the enumerated
categories of workers which are recited
just before it . . . .” Id. at 115. Reading
section 1 in this narrow manner, the Court
noted, also concurs with Congress’s intent
in enacting the FAA to compel
enforcement of arbitration agreements in
response to then-prevalent judicial hostility
toward such agreements, especially given
the fact that more specific and
comprehensive fede ral arbitra tion
procedures for seamen and railroad
employees were already in existence or on
the verge of passage. See id. at 121 (“It
would be rational for Congress to ensure
that workers in general would be covered
by the provisions of the FAA, while
reserving for itself more specific
legislation for those engaged in
transportation.”) (citation omitted).
To determine whether Palcko’s
employment contract, including the
arbitration agreement, is exempt from the
FAA’s coverage, we must therefore
determine whether Palcko can be
considered to be a “transportation worker”
in a “class of workers . . . engaged in . . .
commerce” within the meaning of the
FAA, as interpreted by Circuit City. The
District Court, citing our decision in
Tenney Engineering, Inc. v. United
Electrical Radio & Machine Workers of
America, 207 F.2d 450, 452 (3d Cir.
1953), reasoned that Palcko qualifies as a
transportation worker because her job
“was so closely related [to the transport of
the goods] as to be in practical effect part
of [the shipping of the goods].” App. at 17
(internal quotations omitted). Airborne
challenges the court’s finding, arguing that
Palcko, as a “management employee” with
no close contact with channels of interstate
commerce and not subject to other existing
statutory employment dispute resolution
schemes, cannot qualify as an exempt
worker under section 1 of the FAA.
Appellant’s Br. at 27-36.
Fifty years ago, this court in Tenney
was required to construe the meaning of
the exception clause in the context of a
labor dispute. The union sought a stay
pending arbitration which was provided in
the collective bargaining agreement. The
parties stipulated that the employer was
engaged in the manufacture of goods for
sale in interstate commerce and that the
employees were eng aged in that
manufacture and incidental plant
maintenance. Presaging the Supreme
Court’s holding in Circuit City, we held
that the exception was inapplicable. We
stated that as the language “any other class
of workers engaged in foreign or interstate
commerce” followed seamen and railroad
workers, the rule of ejusdem generis
demands that the phrase includes “only
those other classes of workers who are
likewise engaged directly in commerce,
that is, only those other classes of workers
who are actually engaged in the movement
of interstate or foreign commerce or in

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work so closely related thereto as to be in
practical effect part of it.” Tenney, 207
F.2d at 452. The Supreme Court’s later
decision in Circuit City essentially
affirmed the Tenney analysis. 532 U.S. at
119.
Adopting the narrow interpretation
of section 1 stated in Tenney and Circuit
City, Airborne argues that Palcko’s work,
as a supervisor, was not only dissimilar to
that of seamen or railroad workers, but
also did not directly involve the interstate
delivery of packages. She therefore cannot
be a “transportation worker” in the sense
envisioned by the Court in Circuit City.
We do not agree. According to Palcko’s
affidavit, she was responsible for
“ m o n i t o ri n g a n d i m p rovin g th e
performance of drivers under my
supervision to insure [sic] timely and
efficient delivery of packages.” App. at
67. Such direct supervision of package
shipments makes Palcko’s work “so
closely related [to interstate and foreign
commerce] as to be in practical effect part
of it.” Tenney, 207 F.2d at 452; see
generally Great W. Mortgage Corp. v.
Peacock, 110 F.3d 222, 226-27 (3d Cir.
1997) (declaring that Tenney is still good
law).
Airborne suggests that the
exemption clause should be limited to
those truck drivers who physically move
the packages. If we were to accept that
limitation, we would unnecessarily narrow
the section 1 exemption in a way never
intended by the FAA; had Congress
intended the residual clause of the
exemption to cover only those workers
who physically transported goods across
state lines, it would have phrased the
FAA’s language accordingly.2 We
therefore concur with the District Court’s
finding that Palcko’s employment contract
with Airborne is exempt from the FAA’s
coverage because she is a transportation
worker engaged in interstate and foreign
commerce under section 1 of that statute.
B. The FAA’s Preemptive Effect over
Washington State Law Governing
Arbitration
1. Jurisdiction
Airborne also argues that even if its
arbitration agreement with Palcko is
exempt from the FAA’s coverage, the
2 We are not persuaded by
Airborne’s suggestion that the inclusion
of Palcko in the class of workers exempt
from the FAA’s coverage would create a
“slippery slope” problem that would
ultimately lead to the exemption of all
“management employees” in the same
chain of command. Palcko was a direct
supervisor of Airborne’s drivers that
transported packages, and our decision is
based only on her particular relations to
the channels of interstate commerce. In
this regard Palcko’s situation differs
from the employee litigants in Cole, 105
F.3d at 1469, and Kropfelder v. Snap-On
Tools Corp., 859 F. Supp. 952 (D. Md.
1994); neither the railroad security guard
in Cole nor the warehouse manager in
Kropfelder was a transportation worker,
let alone engaged in the transportation of
goods interstate.

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agreement is nonetheless enforceable
under the alternative ground that the
arbitration agreement is valid under
Washington state law. Before we examine
the merit of Airborne’s argument,
however, we must first ascertain whether
there is a basis for our jurisdiction to
inquire into this state-law claim.
The District Court exercised
supplemental jurisdiction over Palcko’s
Pennsylvania state law cause of action
under 28 U.S.C. § 1367, and issued an
order denying Airborne’s motion to
compel arbitration on both FAA and
Washington state law grounds. While we
may review Airborne’s appeal with respect
to the FAA under 9 U.S.C. § 16(a), that
section does not cover our review of a
non-FAA, state-law arbitration claim in an
otherwise nonappealable interlocutory
order. Our ability to review the
Washington state law issue before us, if
any, must therefore rest on the doctrine of
pendent appellate jurisdiction, which is
discretionary and narrow in nature.
In E.I. Dupont de Nemours and Co.
v. Rhone Poulenc Fiber and Resin
Intermediates, S.A.S., 269 F.3d 187 (3d
Cir. 2001), we explained that “[t]he
doctrine of pendent appellate jurisdiction,
in its broadest formulation, allows an
appellate court in its discretion to exercise
jurisdiction over issues that are not
independently appealable but that are
intertwined with issues over which the
appellate court properly and independently
exercises its jurisdiction.” Id. at 202-03.
Recognizing that the Supreme Court has
endorsed, but also limited, the use of
pendent appellate jurisdiction by Courts of
Appeals, we concluded that “the doctrine
should be used ‘sparingly,’ and only where
there is sufficient overlap in the facts
relevant to both the appealable and
nonappealable issues to warrant plenary
review.” Id. at 203 (emphasis in original).
Here, both the FAA exemption and
Washington state law issues arise from a
single arbitration agreement that provides
alternative grounds for the arbitration of
all claims arising from Palcko’s
employment with Airborne. Moreover,
both Palcko’s Title VII and Pennsylvania
Human Relations Act claims arise from the
same set of facts related to her conditions
as an Airborne employee. Thus, not only
does sufficient overlap of facts exist to
warrant plenary rev iew, b ut the
Washington state law arbitration issue is
so closely intertwined with the FAA claim
that our taking of pendent appellate
jurisdiction over the former is necessary to
ensure meaningful review of the District
Court’s order in its entirety. We therefore
conclude we may exercise pendent
appellate jurisdiction over the state-law
portion of the District Court’s order.
2. Discussion
The District Court ruled that the
exemption of Palcko’s employment
contract from the FAA’s coverage also
precludes enforcement of the arbitration
agreement under Washington state law.
The court found that “[a]lthough the FAA
contains no express preemptive provision
and its preemptive effect is limited, its
preemptive effect does encompass

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questions of arbitrability.” App. at 17. It
reasoned that enforcement of the
arbitration agreement between Palcko and
Airborne “in accordance with state laws
favoring arbitration would directly conflict
with Congress’s express purpose,” in
drafting the exemption clause in section 1
of the FAA, of exempting workers
engaged in interstate commerce from
arbitration. App. at 18.
In considering whether the
inclusion of the exemption clause was
intended to preempt state law regarding
enforcement of arbitration agreements, we
must keep in mind that Congress enacted
the FAA “to ensure judicial enforcement
of privately made agreements to arbitrate,”
rather than restrict the force of arbitration
agreements. Dean Witter Reynolds, Inc. v.
Byrd, 470 U.S. 213, 219 (1985). The
Supreme Court has stated that “passage of
the Act was motivated, first and foremost,
by a congressional desire to enforce
agreements into which parties had entered,
and [courts] must not overlook this
principal objective when construing the
statute, or allow the fortuitous impact of
the Act on efficient dispute resolution to
overshadow the underlying motivation.”
Id. at 220 (footnote omitted). In seeking to
fulfill the FAA’s purpose, the Court has
enforced an agreement to arbitrate claims
under the Securities Act of 1933, even
though prior case law stated that the
Securities Act’s language prohibits the
arbitration of such claims. Rodriguez de
Quijas v. Shearson/American Express,
Inc., 490 U.S. 477 (1989) (overruling
Wilko v. Swan, 346 U.S. 427 (1953)); see
also Gilmer v. Interstate/Johnson Lane
Corp., 500 U.S. 20 (1991) (enforcing
arbitration clause in a securities
registration application to cover an Age
Discrimination in Employment Act claim).
In doing so, the Supreme Court has held
that the FAA represents a “liberal federal
policy favoring arbitration agreements.”
Moses H. Cone Mem’l Hospital v.
Mercury Constr. Corp., 460 U.S. 1, 24
(1983). The Court has also stated that
parties to an arbitration agreement,
“[h]aving made the bargain to arbitrate . .
. should be held to it unless Congress itself
has evinced an intention to preclude a
waiver of judicial remedies for the
statutory rights at issue.” Mitsubishi
Motors Corp. v. Soler Chrysler-Plymouth,
Inc., 473 U.S. 614, 628 (1985).
There is no language in the FAA
that explicitly preempts the enforcement of
state arbitration statutes. As the Supreme
Court explained in Volt Information
Sciences, Inc. v. Board of Trustees of
Leland Stanford Junior University, 489
U.S. 468 (1989), “The FAA contains no
express pre-emptive provision, nor does it
reflect a congressional intent to occupy the
entire field of arbitration.” Id. at 477
(citing Bernhardt v. Polygraphic Co., 350
U.S. 198 (1956), which upheld application
of state arbitration law to an arbitration
provision in a contract not covered by the
FAA). The Volt Court, in determining
whether to enforce an arbitration
agreement using a California procedural
rule that has no counterpart in the FAA,
stated that “[t]here is no federal policy
favoring arbitration under a certain set of

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procedural rules; the federal policy is
simply to ensure the enforceability,
according to their terms, of private
agreements to arbitrate.” Id. at 476. The
Court then ruled that the application of the
California procedural rule to stay
arbitration to the agreement, in accordance
with a choice-of-law provision contained
therein, is appropriate because while “state
law may nonetheless be pre-empted [by
the FAA] to the extent that it actually
conflicts with federal law – that is, to the
extent that it stands as an obstacle to the
accomplishment and execution of the full
purposes and objectives of Congress,” the
application of the state procedural rule, “in
accordance with the terms of the
arbitration agreement itself, would [not]
undermine the goals and policies of the
FAA.” Id. at 477-78 (internal quotations
and citations omitted).
Applying the Supreme Court’s
precedent, we conclude that the District
Court erred in holding that Palcko’s
exemption status under section 1 of the
FAA preempts the enforcement of the
arbitration agreement under Washington
state law. It is telling that the arbitration
agreement itself envisioned the possibility
that Palcko’s employment contract would
be deemed exempt from the FAA’s
coverage under section 1 of the Act. It
provided for that contingency by including
the following: “To the extent that the
Federal Arbitration Act is inapplicable,
Washington law pertaining to agreements
to arbitrate shall apply.” App. at 19. We
see no reason to release the parties from
their own agreement. We stated in
Mason-Dixon Lines, Inc. v. Local Union
No. 560, 443 F.2d 807 (3d Cir. 1971), “In
our view, the effect of Section 1 is merely
to leave the arbitrability of disputes in the
excluded categories as if the [Federal]
Arbitration Act had never been enacted.”
Id. at 809.3 Here, enforcement of the
arbitration agreement between Palcko and
Airborne under Washington state law, as if
the FAA “had never been enacted,” does
not contradict any of the language of the
FAA, but in contrast furthers the general
policy goals of the FAA favoring
arbitration. We will therefore remand so
that the District Court can take the actions
necessary to enforce the arbitration
agreement under Washington state law.
C. Whether Airborne Waived Its Right
to Arbitration
Palcko also argues on appeal that
Airborne has waived its right to arbitration
3 Although Mason-Dixon Lines
involved the different issue of staying
judicial proceedings pending arbitration
under an agreement excluded from
section 1 of the FAA, the principle we
put forth in that case regarding the
exclusionary effect of section 1 on other
arbitration issues not related to the FAA
is equally applicable here. The case also
demonstrates that enforcing the
arbitration agreement under Washington
state law does not contradict our finding
above that Palcko’s employment
contract, of which the arbitration
agreement is a part, is exempted from the
FAA’s coverage.

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by failing to include it in its initial motion
to dismiss on the ground of alleged
defective service of process under Federal
Rule of Civil Procedure 12(b). Palcko’s
argument is unpersuasive. Rule 12 deals
with defenses and objections by pleading
or motion. The relevant portions of Rule
12, for Palcko’s purposes, are as follows:
(b) How Presented. Every
defense, in law or fact, to a
claim for relief in any
pleading, whether a claim,
counterclaim, cross-claim,
or third-party claim, shall be
asserted in the responsive
pleading thereto if one is
required, except that the
following defenses may at
the option of the pleader be
made by motion: (1) lack of
jurisdiction over the subject
m a t t e r , ( 2 ) la c k o f
jurisdiction over the person,
(3) improper venue, (4)
insufficiency of process, (5)
insufficiency of service of
process, (6) failure to state a
claim upon which relief can
be granted, (7) failure to
join a party under Rule 19.
A motion making any of
these defenses shall be made
before pleading if a further
pleading is permitted. No
defense or objection is
waived by being joined with
one or more other defenses
or objections in a responsive
pleading or motion. . . .
(g) Consolidation of
Defenses in Motion. A
party who makes a motion
under this rule may join
with it any other motions
herein provided for and then
available to the party. If a
party makes a motion under
this rule but omits therefrom
any defense or objection
then available to the party
which this rule permits to be
raised by motion, the party
shall not thereafter make a
motion based on the defense
or objection so omitted,
except a motion as provided
in subdivision (h)(2) hereof
on any of the grounds there
stated.
(h) Waiver or Preservation
of Certain Defenses.
(1) A defense of lack
of jurisdiction over the
person, improper venue,
insufficiency of process, or
insufficiency of service of
process is waived (A) if
omitted from a motion in the
circumstances described in
subdivision (g), or (B) if it is
neither made by motion
under this rule nor included
in a responsive pleading or
an amen dmen t thereof
permitted by Rule 15(a) to
be made as a matter of
course.

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(2) A defense of
failure to state a claim upon
which relief can be granted,
a defense of failure to join a
party indispensable under
Rule 19, and an objection of
failure to state a legal
defense to a claim may be
made in any pleading
permitted or ordered under
Rule 7(a), or by motion for
judgment on the pleadings,
or at the trial on the merits.
Fed. R. Civ. P. 12(b), (g), (h).
Palcko contends that although
motions to dismiss based on the existence
of an arbitration agreement are most
commonly filed under Rule 12(b)(1) (lack
of subject matter jurisdiction) or Rule
12(b)(6) (failure to state a claim upon
which relief can be granted), that practice
is inappropriate and that motions to
dismiss based on an arbitration agreement
are more appropriately brought under Rule
12(b)(2) (lack of personal jurisdiction) or
Ru le 12(b)(3) (improper venue).4
Appellee’s Br. at 14. Palcko’s novel
categorization of the arbitration agreement
claim is critical to her waiver argument
because motions under Rule 12(b)(1) and
(b)(6) are not waived under Rule 12(h)(1),
but motions under Rule 12(b)(2) and (b)(3)
are.
Existing legal authorities do not
support Palcko’s creative theory. The only
support Palcko has cited is a Pennsylvania
state cour t decisio n interp retin g
Pennsylvania state rules of civil procedure.
Wilk v. Ravin, 46 Pa. D. & C. 4th 347 (Ct.
Com. Pl. Allegheny County 1991);
Appellant’s Reply Br. at 13. Wilk is of
little relevance to interpretation of federal
procedural rules. Our prior decisions
support the traditional practice of treating
a motion to compel arbitration as a motion
to dismiss for failure to state a claim upon
which relief can be granted. See
Nationwide Ins. Co. v. Patterson, 953 F.2d
44, 45 n.1 (3d Cir. 1991) (“Dismissal of a
declaratory judgment action because the
dispute is covered by an arbitration
provision is generally effected under Rule
12(b)(6) covering dismissals for failure to
state a claim upon which relief can be
granted, see, e.g., Aetna Casualty & Surety
Co. v. Hameen, 758 F. Supp. 1049 (E.D.
Pa. 1990), . . . .”).
Allowing a waiver of the right to
arbitration based on Rule 12(h)(1) would
undermine the strong judicial posture
favoring arbitration as discussed above.
Our precedent holds that waiver of
arbitration rights “is not to be lightly
inferred” by federal courts. PaineWebber
Inc. v. Faragalli, 61 F.3d 1063, 1068 (3d
Cir. 1995) (quoting Gavlik Constr. Co. v.
H.F. Campbell Co., 526 F.2d 777, 783 (3d
Cir. 1975)). We have also stated that
“prejudice is the touchstone for
determining whether the right to arbitrate
has been waived.” Hoxworth v. Blinder,
Robinson & Co., Inc., 980 F.2d 912, 925
(3d Cir. 1992); see also Thyssen, Inc. v.
4 Improper venue claims fall within
Rule 12(b)(3); Palcko incorrectly cited
Rule 12(b)(4).

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Calypso Shipping Corp., 310 F.3d 102 (2d
Cir. 2002) (ruling that no waiver exists
even though defendant did not seek
arbitration until more than eighteen
months after the suit was filed and after
plaintiff filed a motion for partial summary
judgment).
Although we found prejudice in
Hoxwo rth because defendants had
engaged in extensive pretrial practice
(including filing a motion to dismiss for
failure to state a claim) in the more than
eleven months prior to filing a motion to
compel arbitration, Hoxworth, 980 F.2d at
925, nothing in the record suggests that
Palcko has suffered a similar adverse
effect here. Airborne filed its motion to
compel arbitration within thirty-eight days
of learning of the lawsuit and within
roughly twenty-two days of filing its initial
motion to dismiss for insufficiency of
service of process. Appellant’s Reply Br.
at 12 n.2. Airborne had also requested that
Palcko voluntarily agree to arbitration ten
days before filing its motion to compel
arbitration. Appellant’s Reply Br. at 14.
Although the length of the time period
involved alone is not determinative,
Palcko has failed to show what adverse
effects, if any, she has suffered within that
short period of time. Therefore waiver
cannot be inferred from the facts of this
case.
IV.
For the above reasons, we will
reverse the order of the District Court
denying enforcement of the arbitration
agreement under Washington state law and
remand for further proceedings consistent
with this opinion.

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