UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT No. 25-1327 ROGER A. SALVATORA v. Xto Energy , Inc

UNITED S TATES C OURT OF APPEALS FOR THE
THIRD CIRCUIT
No. 25-1327
ROGER A. SALVATORA ; SANDRA E. SALVATORA; D&M
MARBURGER FAMILY ENTERPRISES , L.P.; H EASLEY ’ S
N URSERIES , INC .; RODNEY L. L ANG ;
BONITA A. L ANG , individually and on behalf of all those
similarly situated
v.
XTO E NERGY , INC .,
Appellant
_____________________________
On Appeal from the U.S. District Court, W.D. Pa.
Judge William S. Stickman, IV, No. 2:19-cv-01097
Before: K RAUSE , PHIPPS , and FISHER , Circuit Judges
Argued: Dec. 10, 2025; Decided: August 24, 2026
_____________________________
O PINION OF THE COURT
PHIPPS , Circuit Judge.
In this Rule 23(b)(3) class action dispute over royalties due
under oil and gas leases, none of the named plaintiffs had
arbitration clauses in their leases, but the proposed classes were
defined broadly enough to include leaseholders with arbitration
clauses in their leases. The defendant moved to compel
arbitration against the leaseholders with arbitration clauses in
their leases but only after class certification and the expiration
of the opt-out period for putative class members. Because that
motion was preceded by years of litigation, the District Court
concluded that the defendant impliedly waived its right to

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compel arbitration against the unnamed class members with
arbitration clauses in their leases by demonstrating a
preference for litigation over arbitration. Through this
interlocutory appeal, the defendant challenges that ruling. In
reviewing the District Court’s legal conclusion of waiver de
novo and its attendant factual findings for clear error, see White
v. Samsung Elecs. Am., Inc., 61 F.4th 334, 338 (3d Cir. 2023),
we will VACATE the order denying the defendant’s motion to
compel arbitration and REMAND the case for further
proceedings consistent with this Opinion.
B ACKGROUND
Six landowners in Western Pennsylvania had oil and gas
leases under which XTO Energy, Inc., a wholly owned
subsidiary of Exxon Mobil Corporation, owed them royalties
on natural gas extracted from their properties. They believed
that XTO, a citizen of Delaware by incorporation and of Texas
through its principal place of business, was underpaying those
royalties. None of those six landowners, who were all citizens
of Pennsylvania with one, a limited partnership, also being a
citizen of North Carolina, had arbitration clauses in their
leases. On August 29, 2019, they sued XTO in the Western
District of Pennsylvania on behalf of themselves and three
putative classes seeking over $5 million in damages for the
underpayment of royalties. As proposed, the putative classes
together included over 100 landowners in Western
Pennsylvania whose oil and gas leases provided similar
methods for calculating royalties due from XTO. The
definition of the putative classes did not exclude landowners
whose leases had arbitration clauses. With minimal diversity
among the parties, the number of putative class members above
the numerosity threshold, and a qualifying amount in
controversy, the case was within the District Court’s subject-

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matter jurisdiction under the Class Action Fairness Act, and the
parties consented to have a Magistrate Judge preside over it.1
Before XTO answered the original complaint, the named
plaintiffs amended it. XTO answered that amended complaint
as well as the second and third amended complaints that
followed. XTO identified many affirmative defenses in each
of those answers, but it never included arbitration among them.
Beyond the pleadings, the initial focus of the case was class
discovery. That involved multiple case management
conferences, several depositions, the production of documents,
and the exchange of expert reports. The parties also engaged
in court-sponsored mediation during the class-discovery period
consistent with local rule. See W.D. Pa. LCvR 16.2 (Nov. 1,
2016) (presumptively requiring that parties to civil cases
engage in some form of alternative dispute resolution).
In March 2022, the six named plaintiffs moved to certify
two classes – one for each count in the operative pleading, the
third amended complaint. Their proposed classes together
included about 500 leaseholders, a fraction of whom had
arbitration clauses in their leases.
XTO opposed class certification on several grounds.
Among those was its contention that if the classes were defined
to include leaseholders with arbitration clauses in their leases,
then the typicality and adequacy requirements for class
certification could not be satisfied. See Fed. R. Civ.
1 See 28 U.S.C. § 1332(d)(2) (requiring an amount in
controversy of over $5 million), (d)(2)(A) (providing that
minimal diversity is satisfied when “any member of a class of
plaintiffs is a citizen of a State different from any defendant”),
(d)(5)(B) (conditioning the grant of jurisdiction on “the
number of members of all proposed plaintiff classes in the
aggregate” being 100 or more); id. § 636(c)(1); Fed. R. Civ.
P. 73(a).

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P. 23(a)(3)–(4). In support of that position, XTO made clear
that it was unwilling to “waive its arbitration rights under any
leases containing [arbitration clauses].” Def.’s Resp. to Pls.’
Am. Mot. for Class Certification 19 (JA321).
Over XTO’s opposition, the Magistrate Judge, who was no
longer presiding, but deciding the motion on a referral, see Fed.
R. Civ. P. 72(a), issued a report recommending certification of
a Rule 23(b)(3) class inclusive of leaseholders with arbitration
clauses in their leases. Salvatora v. XTO Energy, Inc.,
2023 WL 4137306, at *1, *11–24 (W.D. Pa. June 2, 2023).
See generally Fed. R. Civ. P. 23(b)(3). In doing so, the
Magistrate Judge did not address the plaintiffs’ argument that
XTO had implicitly waived its right to arbitration. But, in
recognition of the potential for class members with arbitration
clauses in their leases to opt out of the class, see Fed. R. Civ.
P. 23(c)(2)(B)(v), the Magistrate Judge left open the possibility
that XTO could “raise the arbitration defense post-
certification” by filing a motion to “amend the class definition
to exclude such members after the expiration of the opt-out
period,” which would “enable the Court to determine the class
composition and analyze ‘the specific arbitration agreements
that [XTO] wishes to enforce[.]’” Salvatora, 2023 WL
4137306, at *17 (second alteration in original) (quoting In re
Ductile Iron Pipe Fittings (“DIPF”) Direct Purchaser
Antitrust Litig., 2016 WL 5508843, at *2 (D.N.J. Sept. 28,
2016)).
The District Court adopted that report and recommendation
over XTO’s objections. Salvatora v. XTO Energy, Inc.,
2023 WL 4135570, at *1–2 (W.D. Pa. June 22, 2023). On
July 6, 2023, XTO petitioned this Court under Rule 23(f) for
interlocutory appellate review of that decision and filed a
motion in the District Court to stay the case pending this
Court’s review. In its brief in support of a stay, XTO repeated
its intention to enforce its arbitration rights with respect to
putative class members with arbitration clauses in their leases.

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The District Court denied the stay request in late July, and this
Court denied the Rule 23(f) petition on August 20, 2023.
Without a stay during the pendency of the Rule 23(f)
petition, the proceedings in the District Court focused on notice
to members of the (b)(3) classes. In a proposed case
management order on that topic submitted on July 25, 2023,
XTO reaffirmed its intention to compel arbitration with the
members of the classes whose leases contained arbitration
clauses. The Magistrate Judge approved the class notice in
October and set an exclusion date of January 8, 2024, for class
members to opt out. In a filing on February 23, 2024, the
plaintiffs indicated that one class member had opted out. At
that point, 15 or 16 of the unnamed class members’ leases
contained arbitration clauses.2
Other than the single opt-out and a joint motion to amend
the case management order filed on March 27, 2024, there was
no docket activity from the beginning of the opt-out period
until March 29, 2024, when XTO moved to compel arbitration
with the unnamed class members whose leases had arbitration
clauses. In its motion, XTO quoted the Magistrate Judge’s pre-
certification statement allowing for the possibility that XTO
would move to “amend the class definition to exclude such
members after the expiration of the opt-out period.” Def.’s
Mot. to Compel Arbitration (JA691–93) (quoting Salvatora,
2023 WL 4137306, at *17).
In opposing that motion, the plaintiffs argued that XTO had
implicitly waived its right to arbitrate. They pointed out that
XTO chose to litigate the case for 55 months before moving to
compel arbitration. The plaintiffs further emphasized that
during that time, XTO filed three answers in which it did not
2 The parties disagree on the precise number of leases with
arbitration clauses. XTO identifies 16 leases with arbitration
clauses, and the plaintiffs argue that one of those leases does
not belong in either class.

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mention an arbitration defense; engaged in discovery for class
certification, which included case management orders,
depositions, document production, and expert reports; opposed
class certification; and moved to compel arbitration only after
the opt-out period expired.
On referral, a different Magistrate Judge denied XTO’s
motion to compel arbitration. See Fed. R. Civ. P. 72(a). In
doing so, that Magistrate Judge relied on a decision from a
District Court in New Jersey – Valli v. Avis Budget Rental Car
Group, LLC, 2024 WL 4349747 (D.N.J. Sept. 30, 2024) – to
conclude that XTO had abandoned its right to arbitrate by
“illustrat[ing] a preference for litigation.” Salvatora v. XTO
Energy, Inc., 759 F. Supp. 3d 615, 621–22 (W.D. Pa. 2024).
XTO filed objections to that ruling, see Fed. R. Civ. P. 72(a),
which the District Court rejected.
Through a notice of appeal, XTO invoked this Court’s
appellate jurisdiction to challenge the denial of its motion to
compel arbitration. See 9 U.S.C. § 16(a)(1)(B).3 The parties
completed their briefing and participated in oral argument. Six
days after oral argument, however, this Court issued a
precedential decision vacating and remanding the Valli
decision on which the Magistrate Judge had relied in denying
XTO’s motion to compel arbitration. See Valli v. Avis Budget
Grp., Inc., 162 F.4th 396, 416 (3d Cir. 2025). The parties were
3 The plaintiffs contest the exercise of appellate jurisdiction on
the grounds that XTO’s motion sought to dismiss the claims
brought by leaseholders whose leases had arbitration clauses
instead of moving to compel arbitration with those
leaseholders. But the order denying XTO’s motion precluded
arbitration, and because it had “the effect of declining to
compel arbitration,” a challenge to that order is within this
Court’s appellate jurisdiction. Henry ex rel. BSC Ventures
Holdings, Inc. Emp. Stock Ownership Plan v. Wilmington Tr.,
N.A., 72 F.4th 499, 505 (3d Cir. 2023) (quoting Palcko v.
Airborne Express, Inc., 372 F.3d 588, 592 (3d Cir. 2004)).

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then permitted an opportunity to provide supplemental briefing
about the impact of that Valli decision on this case. In their
supplemental briefing, the plaintiffs added the argument that
XTO’s participation in mediation was evidence of its waiver of
its arbitration rights.
DISCUSSION
To determine whether a party to an arbitration agreement
waives its right to pursue enforcement of that agreement in
federal district court under the Federal Arbitration Act, see
9 U.S.C. § 4, courts apply the standard of waiver applicable to
federal rights. See Morgan v. Sundance, Inc., 596 U.S. 411,
416–17 (2022). Under that standard, a waiver, which may be
explicit or implied, requires (i) an intentional relinquishment
or abandonment (ii) of a known right. See id. at 417; Johnson
v. Zerbst, 304 U.S. 458, 464 (1938) (“A waiver is ordinarily an
intentional relinquishment or abandonment of a known right or
privilege.”); Valli, 162 F.4th at 409 (explaining that a waiver
of arbitration rights can be “explicit” or “implied”).
XTO’s principal argument is that the Magistrate Judge
erred by concluding that XTO, through its conduct, satisfied
the first element of waiver. In the context of the waiver of
arbitration rights, an intentional relinquishment or
abandonment may be established by conduct inconsistent with
an intention to compel arbitration, such as by demonstrating “a
preference for litigation over arbitration.” White, 61 F.4th at
339–40.
The intervening Valli decision articulated a caveat to the
application of that standard in the context of class-action
litigation before class certification. It held that when no named
class member has claims subject to arbitration, but the
proposed class includes putative members with claims
potentially subject to arbitration, the lack of a motion to compel
arbitration by a defendant before class certification does not
indicate a preference for litigation over arbitration. Valli,
162 F.4th at 408, 410. That caveat applies here because none

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of the named class members had arbitration clauses in their
leases, and, as proposed, the classes could include leaseholders
with arbitration clauses in their leases. Therefore, under Valli,
the absence of a motion to compel arbitration by XTO before
class certification is not suggestive of a preference by XTO for
litigation over arbitration.
The Valli caveat, however, is not all-encompassing. Other
actions taken by a defendant before class certification may be
evidence of its intention to waive arbitration, especially when
the defendant does not expressly communicate its interest in
asserting its right to compel arbitration. See id. at 410
(recognizing that the lack of a formal motion to compel
arbitration “does not remove all pre-[certification] conduct
from the waiver inquiry”). A defendant’s conduct after class
certification is likewise outside of the scope of the Valli caveat
and may be considered in evaluating whether a defendant
exhibited a preference for litigation over arbitration. See id.
Applied here, the plaintiffs identify several actions or
inactions by XTO – beyond the lack of a motion to compel
arbitration – that they contend are inconsistent with an
intention to exercise the right to compel arbitration. Those are
(i) XTO’s omission of the arbitration affirmative defense in
each of its three answers; (ii) XTO’s engagement in class
discovery; (iii) XTO’s participation in mediation; (iv) XTO’s
opposition to class certification; and (v) XTO’s delay in
moving to compel arbitration until the opt-out period had
expired. Those facts, however, do not demonstrate a
preference for litigation over arbitration sufficient for an
implied waiver.
XTO’s failure to plead arbitration as an affirmative defense
in each of its three answers does not constitute an intentional
relinquishment or abandonment of the right to compel
arbitration with putative class members whose leases have
arbitration clauses. As a matter of law, putative members of a
Rule 23(b)(3) class are not parties to a case until after class

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certification. See N. Sound Cap. LLC v. Merck & Co., 938 F.3d
482, 492–93 (3d Cir. 2019) (“It is axiomatic that an unnamed
class member is not ‘a party to the class-action litigation before
the class is certified.’” (quoting Smith v. Bayer Corp., 564 U.S.
299, 313 (2011))); Home Depot USA, Inc. v. Lafarge N. Am.,
Inc., 59 F.4th 55, 63 (3d Cir. 2023) (same); see also Devlin v.
Scardelletti, 536 U.S. 1, 16 n.1 (2002) (Scalia, J., dissenting)
(describing the argument that an unnamed class member is a
party to the litigation before certification as “novel and surely
erroneous”). Thus, when XTO answered the three amended
complaints before class certification, it was not litigating
against any putative class members, much less putative class
members with arbitration clauses in their leases – they were not
parties to the case at those times. Consequently, the filing of
those answers without the inclusion of the arbitration
affirmative defense cannot be viewed as exhibiting a
preference for litigation over arbitration with respect to any
putative class members.4
XTO’s involvement in class discovery also does not
demonstrate an intention to relinquish or abandon its right to
compel arbitration. As with XTO’s answers to the amended
complaints, when class discovery was taking place, the
putative class members were not, as a matter of law, parties to
the case. See N. Sound Cap., 938 F.3d at 492–93. So by
4 Even if the putative class members were viewed as parties to
the case at the pleading stage, XTO’s failure to raise arbitration
as an affirmative defense in its answer would not be a waiver
of that defense under the Federal Rules of Civil Procedure
because those rules apply waiver to only four defenses if
omitted from a responsive pleading or an initial motion, and
the affirmative defense of arbitration is not one of those. See
Fed. R. Civ. P. 12(h)(1) (identifying, through cross reference
to Rule 12(b)(2)–(5), the defenses of lack of personal
jurisdiction, improper venue, insufficient process, and
insufficient service of process as waived if not raised in a
Rule 12 motion or a responsive pleading).

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engaging in class discovery, XTO was not actively litigating
against putative class members. Moreover, by participating in
class discovery, XTO was availing itself of an opportunity to
limit the litigation to the named plaintiffs – or at least to classes
defined in a manner that would not include leaseholders with
arbitration clauses in their leases. See Emily Villano,
Arbitration Asymmetries in Class Actions, 131 Yale L.J. F.
742, 745 (2022) (reporting that “[b]y and large . . . [when] a
putative class representative . . . is not bound to arbitrate her
claims[, courts do] not certify a class where a defendant has
asserted that putative class members are bound by arbitration
agreements”). And as set forth in Valli, the “speculative”
nature of a “yet-to-be-defined” class “weakens any reasonable
inference” of waiver. Valli, 162 F.4th at 411. Put simply, by
trying to prevent putative class members with arbitration
clauses in their leases from becoming parties to the case, XTO
was not exhibiting a preference for litigation over arbitration
with respect to them.5
XTO’s participation in mediation during the class-
discovery period likewise does not reflect an intent to
relinquish or abandon its right to enforce its arbitration rights
with respect to putative class members with arbitration clauses
5 The plaintiffs also contend that XTO impermissibly engaged
in merits-discovery during the class-discovery period by
serving four contention interrogatories. That may well be true,
but those contention interrogatories were served upon the
named plaintiffs, and sought information common to both
arbitrable and non-arbitrable claims. That alone is not a firm
enough basis for inferring a preference for litigation over
arbitration with respect to the putative unnamed class members
with arbitration clauses in their leases. See Valli, 162 F.4th at
412 (“Where both arbitrable and non-arbitrable claims are
present, courts ‘might hesitate to infer’ waiver from discovery
efforts that might also ‘be relevant to the non-arbitrable
claims.’” (quoting Nat’l Found. for Cancer Rsch. v. A.G.
Edwards & Sons, Inc., 821 F.2d 772, 775 (D.C. Cir. 1987))).

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in their leases. Mediation, unlike litigation or arbitration, is
non-binding. Participation in mediation does not ordinarily
affect a person’s ability to litigate or to engage in arbitration.
And when mediation is presumptively required by local rule,
as it is in the Western District of Pennsylvania, see W.D. Pa.
LCvR 16.2, a party’s participation in mediation is minimally
indicative of an intention to abandon arbitration rights.
Accordingly, under these circumstances, XTO’s participation
in mediation with named class members before either class was
certified did not reveal an intention to relinquish or abandon its
right to compel arbitration with putative class members. But
cf. Valli, 162 F.4th at 412 (recognizing that participation in
mediation “can support a finding of waiver in appropriate
circumstances”).
The plaintiffs also rely on XTO’s vigorous opposition to
class certification as a basis for implying its intentional
relinquishment or abandonment of its arbitration rights. But
there is a very high bar for such an inference because XTO
expressly indicated its unwillingness to waive its arbitration
rights in opposing class certification. See id. at 410
(recognizing that after consistent, express reservations, “there
is no uncertainty to resolve by inference and the predicate for
implied waiver largely collapses”). To clear the high bar set
by an express reservation of arbitration rights, the conduct
must unambiguously show a preference for litigation over
arbitration. See id. at 410 n.15. And XTO’s opposition does
not demonstrate an unambiguous preference for litigation over
arbitration because its opposition attempted to exclude putative
class members from the litigation, as opposed to resolve their
dispute through litigation.6
6 For the same reason, even in the absence of an express
reservation of arbitration rights, a defendant’s opposition to
class certification of a putative class with arbitration
asymmetries on the grounds that the plaintiff class should not
include members subject to arbitration is not evidence of a

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As a final basis for implying XTO’s intentional
relinquishment or abandonment, the plaintiffs rely on the
timing of XTO’s motion to compel arbitration. Specifically,
they argue that XTO preferred litigation over arbitration for the
class members with arbitration clauses in their leases because
XTO did not move to compel arbitration promptly after class
certification but rather waited until after membership in the
classes was finalized. But XTO, in opposing class
certification, had already stated its intention to preserve its
arbitration rights against the then-putative class members with
arbitration clauses in their leases. Thus, for the timing of
XTO’s motion to be evidence of an intention to relinquish or
abandon arbitration rights, it must demonstrate an
unambiguous preference for litigation over arbitration.
It does not. Waiting to see whether members of the
certified classes chose to opt out here suggests a preference to
avoid litigation with members of the class subject to
arbitration. The Magistrate Judge’s opinion granting class
certification forecasted that any arbitration issues would be
addressed once membership in the class was finalized. See
Salvatora, 2023 WL 4137306, at *17. And adhering to the
Magistrate Judge’s timeline for resolving arbitration disputes
is far removed from unambiguous evidence of a preference for
litigation over arbitration. Nor was XTO using the opt-out
period and the subsequent time needed to finalize class
membership to advance its case against the class members with
arbitration clauses in their leases. The only docket activity
other than the plaintiffs’ submission of the list of excluded
class members was a joint motion to amend the case
management order filed two days before XTO’s motion to
compel arbitration. In addition, the timing of XTO’s motion
was reasonably prompt; XTO filed it within five weeks of
finalization of class membership. Cf. Valli, 162 F.4th at 412–
13 (concluding that a four-month gap between class
preference for litigation over arbitration as to class members
subject to arbitration.

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certification and a motion to compel arbitration was reasonably
prompt). Thus, these circumstances do not clear the high bar
needed to infer that XTO, after stating an intention to preserve
its arbitration rights, intended to relinquish or abandon its
ability to compel arbitration.
From this analysis, no specific action or inaction by XTO
comes close to permitting the inference that XTO intended to
relinquish or abandon its right to compel arbitration. Even so,
the waiver analysis is holistic, cf. White, 61 F.4th at 339–40
(explaining that the waiver analysis is “informed by the
‘circumstances and context of each case’” (quoting Gray
Holdco, Inc. v. Cassady, 654 F.3d 444, 451 (3d Cir. 2011))),
and in theory, the cumulative effect of XTO’s conduct could
still permit the inference of waiver. But when considered in
aggregate, XTO’s conduct produces a negative synergy for
purposes of proving intent. Many of the plaintiffs’ arguments
for an implied waiver have the same shortcoming – they treat
XTO as being in active litigation against the unnamed class
members. That was not the case, however, because those
unnamed class members did not become parties until the
certification order. Moreover, class membership was not
finalized until the expiration of the opt-out period. So, by
continuing to litigate, even for 55 months, XTO did not exhibit
a preference for that mode of dispute resolution over arbitration
with respect to unnamed class members with arbitration
clauses in their leases.
CONCLUSION
For the foregoing reasons, the District Court’s order will be
VACATED and the case will be REMANDED . This Court will not
retain jurisdiction during the remand.

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Counsel for Appellant
Elizabeth Tiblets [Argued]
K&L G ATES LLP
Colin E. Wrabley
REED SMITH LLP
Counsel for Appellees
David A. Borkovic [Argued]
JONES , GREGG , CREEHAN & G ERACE LLP

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