                                                                     [PUBLISH]

                IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT
                          ________________________
                                                               FILED
                                  No. 10-11912        U.S. COURT OF APPEALS
                           ________________________ ELEVENTH CIRCUIT
                                                        SEPTEMBER 7, 2011
                     D.C. Docket No. 8:09-cv-00909-JDW-EAJ JOHN LEY
                                                              CLERK



SARA E. KRINSK,
on behalf of herself and all others
similarly situated,

                                                              Plaintiff - Appellee,

versus

SUNTRUST BANKS, INC., et al.,

                                                                     Defendants,

SUNTRUST BANK,
a Georgia Banking Corporation,

                                                           Defendant - Appellant.

                           ________________________

                    Appeal from the United States District Court
                        for the Middle District of Florida
                          ________________________

                                (September 7, 2011)
Before TJOFLAT, CARNES and HILL, Circuit Judges.

TJOFLAT, Circuit Judge:

      Defendant SunTrust Bank (“SunTrust”) appeals the district court’s order

denying its motion to compel plaintiff Sara Krinsk to submit her claims to

arbitration pursuant to an arbitration agreement governed by the Federal

Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq. The district court held that SunTrust

had, by participating in the litigation for nine months prior to requesting that the

case be submitted to arbitration, waived its contractual right to compel arbitration.

In its appeal, SunTrust argues that Krinsk’s submission of an amended complaint

revived its right to compel arbitration, notwithstanding its previous waiver of that

right. We find merit in SunTrust’s argument and therefore vacate the order and

remand to the district court for further proceedings.

                                          I.

                                          A.

      In December 2006, Krinsk applied for and obtained from SunTrust a home-

equity loan that allowed her to draw from a $500,000 home-equity line of credit

(“HELOC”) collateralized by Krinsk’s $1.6 million Sarasota, Florida home. In

securing the loan, Krinsk executed SunTrust’s standard-form loan agreement,

known as an “Access 3 Equity Line Account Agreement and Disclosure

                                          2
Statement” (the “Loan Agreement”). Among the Loan Agreement’s terms is an

arbitration clause requiring Krinsk and SunTrust to resolve all disputes through

binding arbitration whenever either party elects arbitration and provides the other

party with written notice of the election to arbitrate. Such notice of election “may

be given after a lawsuit has been filed and/or in papers filed in the lawsuit.” If a

party elects to submit the dispute to arbitration, the Loan Agreement precludes

resolution of the claims by class action.1

                                               B.

      In October 2008, SunTrust unilaterally suspended Krinsk’s right to access

$400,000 of her HELOC. SunTrust earlier had mailed Krinsk a letter requesting

that she provide SunTrust with updated financial information; SunTrust contends

that its decision to suspend Krinsk’s HELOC was based on the information she

subsequently provided in response to that request. Indeed, SunTrust informed

Krinsk by letter that it was suspending her HELOC access due to “reasonable

concern that [she would] be unable to fulfill [her] financial payment obligations

      1
          The Loan Agreement provides in pertinent part:

      5. NO CLASS ACTIONS, ETC. . . . if you or we elect to arbitrate a claim, neither
      you nor we will have the right: (a) to participate in a class action in court or in
      arbitration, either as a class representative, class member or class opponent; or (b)
      to join or consolidate Claims with claims of any person other than you. No
      arbitrator shall have authority to conduct any arbitration in violation of this
      provision.

                                               3
with [SunTrust] under [her] credit line account because of a material change in

[her] financial circumstances.”2

       Krinsk alleges that SunTrust’s justification for suspending her account was

pretextual. She claims that SunTrust suspended her HELOC, as well as those of

other Florida homeowners who had obtained HELOCs from SunTrust around the

same time, as part of a scheme SunTrust concocted to restore its capital reserves,

which had become depleted in the fall of 2008. According to Krinsk, HELOCs

like hers—those sold to Florida residents between the late 1990s and early 2008

and secured by Florida real property—were among the highest-rated risk elements

in SunTrust’s debt portfolio, and SunTrust, recognizing that it had a significant

concentration of credit risk arising from these loans, aimed to systematically

liquidate the loans’ available credit balances. To do that, SunTrust mailed letters,

like Krinsk received, requesting that HELOC customers provide SunTrust with

updated financial information. This, Krinsk posits, provided SunTrust with a

means to assert contrived justifications for suspending customers’ access to their

HELOCs—i.e., under the guise of conducting reviews of customers’ financial



       2
           SunTrust’s letter claimed that the suspension decision was based on a report issued by
Equifax, a credit reporting agency, and added that Krinsk could obtain a copy of her credit report
directly from Equifax. The letter also informed Krinsk that she could request reinstatement of
her borrowing privileges if she were to provide additional financial documentation requested.

                                                4
positions. The most vulnerable targets of SunTrust’s scheme, adds Krinsk, who is

92-years-old, were elderly HELOC borrowers, from whom SunTrust anticipated

little resistance.

                                                C.

       Based on the foregoing allegations, Krinsk, on May 15, 2009, filed a class-

action complaint (the “Original Complaint”) against SunTrust—as well as

SunTrust’s corporate parent, SunTrust Banks, Inc. (“SBI”),3 and SunTrust and

SBI’s President and Chief Executive Officer James M. Wells III. The Original

Complaint stated claims for: (1) financial elder abuse under Florida’s Adult

Protective Services Act, § 415.101; (2) breach of contract; (3) deceit; (4) negligent

misrepresentation; (5) breach of fiduciary duty;4 (6) violation of Regulation Z of

the Truth in Lending Act (“TILA”), 12 C.F.R. § 226.5b(f); and (7) breach of the

implied covenant of good faith and fair dealing. It also requested declaratory

relief concerning Krinsk’s right to access her HELOC.

       The Original Complaint defined the proposed class as:

       all Florida permanent or part-time residents that entered into an
       agreement with SunTrust entitled “Access 3 Equity Line Account
       Agreement and Disclosure” and who, after attaining the age of sixty-

       3
        SunTrust is a wholly owned subsidiary of SunTrust Bank Holding Company, which is a
wholly owned subsidiary of SBI.
       4
           The claim for breach of fiduciary duty was asserted against SunTrust only.

                                                 5
       five (65), received a letter from SunTrust between July 1, 2008 and
       October 16, 2008, requesting updated financial information . . . and
       who were subsequently informed their collateralized credit line had
       been suspended or reduced during the draw period for purportedly
       failing to provide the information requested by SunTrust.

Krinsk reasonably estimated, in a later motion for class certification,5 that this

class would “consist[] of hundreds of members located throughout Florida.” Pl.’s

Mot. for Class Certification and Mem. of Law in Supp. 7–8, Aug. 13, 2009

(emphasis added).

       On July 6, 2009, SunTrust responded to the Original Complaint by filing, in

lieu of an answer, a motion to dismiss, challenging the sufficiency of each of

Krinsk’s causes of action; SBI and Wells filed a joint motion to dismiss the

following day. SunTrust’s motion made no mention of the Loan Agreement’s

arbitration clause.

       The district court did not rule on the motions to dismiss for over six months,

and, in the meantime, the litigation proceeded. On August 10, 2009, for instance,

SunTrust and Krinsk jointly filed a Case Management Report in which

(1) SunTrust expressly stated that it opposed arbitrating the claims asserted against




       5
        Krinsk’s motion for class certification, under Fed. R. Civ. P. 23(c)(1), was filed on
August 13, 2009.

                                                6
it in the Original Complaint; (2) SunTrust laid out its discovery plan;6 and (3) the

parties agreed on a proposed discovery deadline, a proposed dispositive motion

deadline, on a final pretrial conference date “on or after April 11, 2011 and for

trial on or after May 16, 2011.” Moreover, following Krinsk’s August 13, 2009

motion to certify the class defined in the Original Complaint, SunTrust levied a

vigorous defense against and opposition to class certification and class

discovery.7 Throughout this time, SunTrust did not assert its right to compel

arbitration under the Loan Agreement or otherwise indicate its intent to do so.

       The district court finally ruled on the motions to dismiss on January 8, 2010,

granting SunTrust’s motion in part8 and dismissing all of Krinsk’s claims against

SBI and Wells. The court also gave Krinsk twenty days’ leave to amend the

Original Complaint in light of its order. Subsequently, on January 28, Krinsk filed

an amended complaint (the “Amended Complaint”), which asserted revised, but

mostly similar, claims against SunTrust only—for (1) breach of contract; (2)


       6
          The discovery plan covered interrogatories, requests for admissions, production
requests, expert witness disclosures, depositions, and the handling of confidential information.
       7
         For example, on September 9, 2009, SunTrust filed an opposition to Krinsk’s August
13, 2009 motion for class certification, and, from November to December 2009, SunTrust filed
four separate motions for protective orders related to Krinsk’s requests for class-wide discovery.
       8
          The court preserved Krinsk’s claims against SunTrust for breach of contract and breach
of implied covenant of good faith and fair dealing, and her request for declaratory relief. All
other claims against SunTrust were dismissed without prejudice.

                                                 7
violation of Regulation Z of TILA; and (3) breach of the implied covenant of good

faith and fair dealing.9

         Because the district court had yet to rule on Krinsk’s motion for class

certification, the Amended Complaint also offered a new definition for the

proposed class, now defining the class as:

         All Florida residents who entered into one or more agreements for a
         . . . [HELOC] with SunTrust Bank pursuant to its “Access 3 Equity
         Line Account Agreement and Disclosure” that was collateralized by
         real estate located in Florida, and who had the available balance of
         their HELOC suspended or reduced anytime between January 1, 2007
         to the date of class certification (the “Class Period”).

This new definition—now encompassing Florida residents of any age whose

HELOCs SunTrust had suspended for any reason during a three-year class

period—greatly enlarged the potential size of the putative class. Indeed, Krinsk

later estimated, in an amended motion for class certification filed on March 11,

2010, the number of class members to be in the thousands—if not the tens of

thousands. See Pl.’s Am. Mot. for Class Certification and Mem. of Law in Supp.

at 7–8, Mar. 11, 2010 (estimating numerosity of amended class definition based

on “SunTrust’s own records” which “show that at least 56,758 Access 3 HELOCs




         9
             Krinsk also again sought declaratory relief concerning her right to access her HELOC
funds.

                                                   8
issued to residents of Florida and secured by real property located in Florida were

suspended or reduced by SunTrust during the Class Period”).

       SunTrust promptly answered the Amended Complaint on February 10,

2010. In its answer, SunTrust raised its right to arbitration for the first time since

the litigation began, asserting, as an affirmative defense, that the Loan

Agreement’s arbitration clause barred Krinsk from pursuing her action in court

and demanding arbitration of her claims. SunTrust also filed, along with its

answer, (1) a motion, under the FAA,10 to compel arbitration, 9 U.S.C. § 4,11 and to

stay the action pending arbitration, id. § 3,12 and (2) a motion to prohibit

maintenance of a class action pursuant to the terms of the Loan Agreement.



       10
        There is no dispute that the Loan Agreement “evidenc[es] a transaction involving
commerce” and is therefore within the scope of the FAA, 9 U.S.C. § 2.
       11
           9 U.S.C. § 4 states in pertinent part, “A party aggrieved by the alleged . . . refusal of
another to arbitrate under a written agreement for arbitration may petition any United States
district court . . . for an order directing that such arbitration proceed in the manner provided for in
such agreement.”
       12
            9 U.S.C. § 3 states:

       If any suit or proceeding be brought in any of the courts of the United States upon
       any issue referable to arbitration under an agreement in writing for such
       arbitration, the court in which such suit is pending, upon being satisfied that the
       issue involved in such suit or proceeding is referable to arbitration under such an
       agreement, shall on application of one of the parties stay the trial of the action
       until such arbitration has been had in accordance with the terms of the agreement,
       providing the applicant for the stay is not in default in proceeding with such
       arbitration.

                                                  9
Krinsk opposed those motions, claiming that SunTrust had waived its contractual

right to compel arbitration.13

                                                 D.

       The district court, in an order issued March 26, 2010, denied SunTrust’s

motion to compel arbitration, agreeing with Krinsk that SunTrust had waived its

right to require arbitration of the claims she asserted in the Amended Complaint.14

       Although arbitration agreements governed by the FAA are to be liberally

enforced, see Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1,

24, 103 S. Ct. 927, 941, 74 L. Ed. 2d 765 (1983),15 courts will not compel

arbitration when the party who seeks to arbitrate has waived its right to do so, see




       13
          In her memorandum in opposition to SunTrust’s motion to compel arbitration, Krinsk
also claimed that the Loan Agreement’s arbitration and class-action-waiver clauses were
unconscionable.
       14
            Because the district court held that SunTrust had waived its right to compel arbitration,
it did not address Krinsk’s claim that the Loan Agreement’s arbitration and class-action-waiver
clauses were unconscionable. That issue, consequently, is not presented on appeal.
       15
           “[T]he Supreme Court has commanded that ‘questions of arbitrability must be
addressed with a healthy regard for the federal policy favoring arbitration.’” Ivax Corp. v. B.
Braun of Am., Inc., 286 F.3d 1309, 1315 (11th Cir. 2002) (quoting Moses H. Cone Mem’l Hosp.
v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S. Ct. 927, 941, 74 L. Ed. 2d 765 (1983)). The
Court has based this stance on Section 2 of the FAA, 9 U.S.C. § 2, which declares “that a written
agreement to arbitrate ‘in any maritime transaction or a contract evidencing a transaction
involving commerce . . . shall be valid, irrevocable, and enforceable, save upon such grounds as
exist at law or in equity for the revocation of any contract.’” Moses H. Cone, 460 U.S. at 24, 103
S. Ct. at 941 (alteration in original) (quoting 9 U.S.C. § 2).

                                                 10
Morewitz v. W. of Eng. Ship Owners Mut. Prot. & Indem. Ass’n, 62 F.3d 1356,

1365 (11th Cir. 1995) (“Arbitration should not be compelled when the party who

seeks to compel arbitration has waived that right.”); see also Burton-Dixie Corp. v.

Timothy McCarthy Constr. Co., 436 F.2d 405, 407 (5th Cir. 1971) (explaining that

an arbitration agreement, “just like any other contract . . . , may be waived”).16 To

determine whether a party has waived its contractual right to arbitrate, courts

apply a two-part test: “First, [they] decide if, ‘under the totality of the

circumstances,’ the party ‘has acted inconsistently with the arbitration right,’ and,

second, [they] look to see whether, by doing so, that party ‘has in some way

prejudiced the other party.’” Ivax Corp. v. B. Braun of Am., Inc., 286 F.3d 1309,

1315 (11th Cir. 2002) (quoting S & H Contractors, Inc. v. A.J. Taft Coal Co., 906

F.2d 1507, 1514 (11th Cir. 1990)).17

       Here, the district court found both prongs of the waiver test satisfied in

denying SunTrust’s motion to compel arbitration. First, the court determined that


       16
          In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this
court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to
October 1, 1981.
       17
          Because federal policy strongly favors arbitration, the party who argues waiver “bears
a heavy burden of proof” under this two-part test. Stone v. E.F. Hutton & Co., 898 F.2d 1542,
1543 (11th Cir. 1990) (per curiam) (quoting Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693
F.2d 1023, 1025 (11th Cir. 1982), overruled on other grounds by Dean Witter Reynolds, Inc. v.
Byrd, 470 U.S. 213, 105 S. Ct. 1238, 84 L. Ed. 2d 158 (1985)) (internal quotation mark omitted).


                                               11
SunTrust had acted inconsistently with its right to arbitrate Krinsk’s claims

through its participation in the litigation up until the filing of its answer and

motion to compel arbitration. “[A] party that substantially invokes the litigation

machinery prior to demanding arbitration may waive its right to arbitrate,” S & H

Contractors, 906 F.2d at 1514 (quoting E.C. Ernst, Inc. v. Manhattan Constr. Co.,

559 F.2d 268, 269 (5th Cir. 1977)) (internal quotation mark omitted), if that

conduct manifests the party’s intent to waive arbitration, see Morewitz, 62 F.3d at

1366 (“Waiver occurs when a party seeking arbitration substantially participates in

litigation to a point inconsistent with an intent to arbitrate.”). In this case, the

district court concluded that SunTrust had, for nine months prior to filing its

answer and motion to compel arbitration, “invoked the judicial process in

litigating this case without any indication that it was contemplating arbitration.”

Order 6, Mar. 26, 2010. Although “a defendant may test the sufficiency of a

complaint without waiving [the defendant’s] right to arbitration,” the court ruled,

“SunTrust did much more than that.” Id. at 7 (citing Wilson v. Par Builders II,

Inc., 879 F. Supp. 1187, 1189 (M.D. Fla. 1995)). In particular, the court focused

on SunTrust’s express opposition to arbitration in the August 10, 2009 Case

Management Report and SunTrust’s significant motions practice in opposition to




                                           12
Krinsk’s request for class certification and class discovery. These actions, the

court determined, displayed SunTrust’s consent to the case’s proceeding in court.

       Additionally, the district court decided that, due to SunTrust’s actions,

Krinsk would suffer prejudice were SunTrust permitted to assert its arbitration

rights in such an untimely manner. In determining whether the party opposing

arbitration has been prejudiced, courts “consider the length of delay in demanding

arbitration and the expense incurred by that party from participating in the

litigation process.” S & H Contractors, 906 F.2d at 1514. Here, the district court

concluded that SunTrust’s election of arbitration was untimely because

“SunTrust’s right to elect arbitration accrued at least as early as the filing of the

[original] complaint,” and yet, SunTrust had permitted nearly nine months to pass

before it first asserted its right to have the dispute arbitrated. Order 7, Mar. 26,

2010. This “belated election to arbitrate,” the court held, prejudiced Krinsk by

inducing her to expend on class-related motion practice and discovery—“the type

of litigation expense[s] that arbitration was designed to alleviate”—in reasonable

reliance on her expectation that SunTrust would not arbitrate her claims.18 Order

6–7, Mar. 26, 2010; see also Morewitz, 62 F.3d at 1366 (explaining that prejudice


       18
          For example, the court highlighted that Krinsk was required to respond to SunTrust’s
opposition to certification of her original proposed class, which resulted in Krinsk having to file
multiple motions to compel discovery.

                                                 13
is generally found “in situations where the party seeking arbitration allows the

opposing party to undergo the types of litigation expenses that arbitration was

designed to alleviate”). That Krinsk had filed the Amended Complaint, the court

added, was “immaterial” to its assessment, since the claims she raised in both

complaints were “based on the same operative facts,” i.e., SunTrust’s allegedly

improper scheme to suspend HELOCs secured by Florida real property. Order 7

n.5, Mar. 26, 2010.

       SunTrust now appeals the order denying its motion to compel arbitration

and to stay the action. Although the order is an interlocutory ruling, SunTrust may

appeal it under 9 U.S.C. § 16(a)(1)(A), (B).19

                                                 II.

       In its brief on appeal, SunTrust argues that the district court erred in

concluding that the Amended Complaint was immaterial to whether SunTrust had

waived its right to compel arbitration.20 Specifically, SunTrust contends that, even

if its invocation of the judicial process operated to waive its right to arbitrate the

claims in the Original Complaint, the Amended Complaint “rejuvenated” or

       19
            We have jurisdiction under 28 U.S.C. § 1292(a)(1).
       20
           We review this legal conclusion by the district court de novo. See, e.g., Ivax Corp.,
286 F.3d at 1316 (declaring that the district court’s legal conclusion that the defendant waived its
right to compel arbitration through the party’s participation in the litigation process is subject to
de novo review).

                                                 14
revived its right to compel arbitration. Whether SunTrust’s position is correct

presents an issue of first impression for this court. The decisions of other federal

courts that have considered the issue are informative and persuasive. They have

held that, in limited circumstances, fairness dictates that a waiver of arbitration be

nullified by the filing of an amended complaint. We conclude that this case

presents one of those limited circumstances, and that SunTrust’s right to compel

arbitration is therefore revived.

      Although, under the Federal Rules of Civil Procedure, “an amended

complaint supersedes the initial complaint and becomes the operative pleading in

the case,” Lowery v. Ala. Power Co., 483 F.3d 1184, 1219 (11th Cir. 2007), the

filing of an amended complaint does not automatically revive all defenses or

objections that the defendant may have waived in response to the initial complaint.

See 5C Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure

§ 1388 (3d ed. 2004) (“The filing of an amended complaint will not revive the

right to present by motion defenses that were available but were not asserted in

timely fashion prior to the amendment of the pleading.”). However, the defendant

will be allowed to plead anew in response to an amended complaint, as if it were

the initial complaint, when the “amended complaint . . . changes the theory or

scope of the case.” Brown v. E.F. Hutton & Co., 610 F. Supp. 76, 78 (S.D. Fla.

                                          15
1985) (citing Joseph Bancroft & Sons Co. v. M. Lowenstein & Sons Co., 50

F.R.D. 415 (D. Del. 1970)). It simply would be unfair to allow the plaintiff to

change the scope of the case without granting the defendant an opportunity to

respond anew. Id.

      Likewise, a defendant’s waiver of the right to compel arbitration is not

automatically nullified by the plaintiff’s filing of an amended complaint. See, e.g.,

Gilmore v. Shearson/Am. Express Inc., 811 F.2d 108, 112 (2d Cir. 1987) (“[A]

motion to compel arbitration of a claim involves the core issue of a party’s

willingness to submit a dispute to judicial resolution and, if waived, is not

automatically revived by the submission of an amended complaint.”), overruled on

other grounds by McDonnell Douglas Fin. Corp. v. Penn. Power & Light Co., 849

F.2d 761 (2d Cir. 1988). Rather, courts will permit the defendant to rescind his

earlier waiver, and revive his right to compel arbitration, only if it is shown that

the amended complaint unexpectedly changes the scope or theory of the plaintiff’s

claims. Id. at 113 (citing Brown, 610 F. Supp. at 78); Envirex, Inc. V. K.H.

Schussler für Umwelttechnik GmbH, 832 F. Supp 1293, 1296 (E.D. Wis. 1993)

(finding that an amended complaint that “made major . . . changes to [the

plaintiff’s] original complaint, altering and adding to the issues to be determined at

trial,” revived the defendants’ right to demand arbitration); Brown, 610 F. Supp. at

                                          16
78–79 (reviving the defendant’s right to compel arbitration where the amended

complaint “materially alter[ed] the situation” by “significantly broaden[ing] the

focus of the litigation”).

      The invocation of the judicial process ordinarily establishes a waiver of the

defendant’s right to compel arbitration—i.e., such conduct shows, in the normal

case, that the defendant intends to elect a judicial forum rather than an arbitral

tribunal. See Cabinetree of Wis., Inc. v. Kraftmaid Cabinetry, Inc., 50 F.3d 388,

390 (7th Cir. 1995) (“[I]nvoking judicial process is presumptive waiver.”

(emphasis omitted)); see also Iowa Grain Co. v. Brown, 171 F.3d 504, 509 (7th

Cir. 1999) (discussing Cabinetree). However, when a plaintiff files an amended

pleading that unexpectedly changes the shape of the case, the case may be “so

alter[ed] . . . that the [defendant] should be relieved from its waiver.” Cabinetree,

50 F.3d at 391. The district court should then “permit a [defendant’s] previous

waiver to be rescinded.” Id. (citing Gilmore, 811 F.2d at 113; Envirex, 832 F.

Supp at 1296). In such a case, pursuant to the strong federal policy supporting the

enforcement of arbitration agreements, the defendant’s motion to compel

arbitration should be granted absent a new waiver by the defendant based on the

defendant’s lack of diligence in seeking arbitration following the filing of the

amended complaint. See, e.g., Envirex, 832 F. Supp. at 1296 (highlighting that

                                          17
“[t]he defendants promptly responded to the . . . amended complaint” with their

motion to compel arbitration).

      In contrast, however, the defendant’s prior waiver should not be nullified,

and there should be no revival of the arbitration right, when the plaintiff has filed

an amended complaint that does not unexpectedly expand the litigation’s scope.

For example, courts have refused to revive the right to compel arbitration where

the amended complaint has made only minor factual changes. See, e.g., Gilmore,

811 F.2d at 113–14 (finding no revival of arbitration right where only minor

factual changes were made that did not alter the scope or theory of plaintiff’s

claim); see also Weight Watchers of Quebec, Ltd. v. Weight Watchers Int’l, Inc.,

398 F. Supp. 1057, 1060 (E.D.N.Y. 1975) (denying defendant’s motion to compel

arbitration, although plaintiff had filed an amended complaint, because the

amended complaint only “restate[d], in . . . a clearer and more orderly fashion, the

claims arising out of the matters already pleaded and dealt with in [a] summary

judgment motion”).

      Here, the Amended Complaint is clearly not like the amended complaints in

these latter cases. Although, as the district court concluded, the Amended

Complaint does merely assert new claims based on the same operative facts as the

claims in the Original Complaint, the Amended Complaint is by no means

                                          18
“immaterial.” That conclusion flatly ignored the significance of the new class

definition in the Amended Complaint, which greatly broadened the potential scope

of this litigation by opening the door to thousands—if not tens of thousands—of

new class plaintiffs not contemplated in the original class definition by discarding

the old definition’s limits on the class plaintiffs’ age and on the bases for their

HELOC suspensions,21 and by expanding the class period from over three months

to over three years.

       This vast augmentation of the putative class so altered the shape of litigation

that, despite its prior invocations of the judicial process, SunTrust should have

been allowed to rescind its waiver of its right to arbitration. SunTrust’s acts in

furtherance of the litigation all occurred prior to the filing of the Amended

Complaint and thus concerned the class contemplated in the Original Complaint;

SunTrust proceeded in court on the expectation that, if the class action were

certified, it would defend itself against only the relatively small plaintiff class

defined in the Original Complaint. SunTrust could not have foreseen that Krinsk

would expand the putative class in such a broad way nine months into the


       21
           As SunTrust points out in its brief on appeal, the language of the amended class
definition presumably opens the door to allow in class members whose HELOC rights were
suspended for, among other things, “monetary defaults, for failing to provide updated financial
information, for a material change in financial circumstances, or for a significant decline in the
appraised value of the collateral property over [the] three and a half year plus [class period].”

                                                 19
litigation. Given this unforeseen alteration in the shape of the case, SunTrust, in

plain fairness, should have been allowed to rescind its earlier waiver through its

prompt motion to compel arbitration.22

       In sum, having found that SunTrust’s right to compel arbitration, even if

waived with respect to the claims in the Original Complaint, was revived by

Krinsk’s filing of the Amended Complaint, we VACATE the district court’s order

denying SunTrust’s motion to compel arbitration and stay the proceedings and

REMAND for further proceedings consistent herewith.23

       SO ORDERED.




       22
           The only action that SunTrust took after the Amended Complaint was filed was to
submit its answer and its motion to compel arbitration thirteen days later. Thus, in no way did
SunTrust act in a manner inconsistent with its right to elect arbitration following the filing of the
Amended Complaint.
       23
         We are mindful that the district court, on remand, must resolve Krinsk’s claim that the
Loan Agreement’s arbitration and class-action-waiver clauses are unconscionable.

                                                 20
