Richards v. Ernst & Young, LLP

Issue: Whether a party should be required to demonstrate prejudice after the opposing party waived its contractual right to arbitrate by participating in litigation, in order for such waiver to be binding and irrevocable under Section 3 of the Federal Arbitration Act; (2) whether, if prejudice is required, what constitutes sufficient “prejudice” in order to find “waiver;” and (3) whether state law contractual defenses to enforcement of an arbitration agreement preserved under Section 2 of the Act, such as defenses of waiver or estoppel, provide a defense to an application for either a stay under Section 3 of the Act or an order compelling arbitration under Section 4.