Non-Signatories Lose In Two Federal Circuits When Trying To Enforce Arbitration
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Two federal circuit courts recently reversed district court decisions allowing non-signatories to compel arbitration. The analysis emphasizes that for a defendant to prove equitable estoppel compels arbitration, the plaintiff’s legal claims must be closely related to the contract containing the arbitration clause.
Retail grocers asserted antitrust claims against wholesalers in In re Wholesale Grocery Products Antitrust Litig., ___ F.3d __, 2013 WL 514758 (8th Cir. Feb. 13, 2013). The plaintiffs expressly crafted their claims to avoid arbitration: ”[i]n an effort to avoid arbitration, each Retailer brought claims only against the Wholesaler with whom they did not have a supply and arbitration agreement.” In other words, while each retailer-plaintiff did have an arbitration agreement with one wholesaler-defendant, no retailer asserted claims against the wholesaler with whom they contracted, and instead asserted claims only against another wholesaler, alleging conspiracy. (Why? Because the arbitration clause prohibited class actions, of course. At least, that’s what the district court opinion suggests.)
Read original articleTags: arbitration agreement, Arbitration Clause, district court decisions, Wholesale Grocery Products Antitrust Litig.
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