Can a signatory to an arbitration agreement compel a nonsignatory to arbitrate against the other signatory?

MultiRegion, United States of America

The following excerpt is from City of Riverside v. Mitsubishi Heavy Indus., Ltd., CASE NO. 13-CV-1724-BEN (KSC) (S.D. Cal. 2014):

California law recognizes that equitable estoppel can apply to permit a signatory to an arbitration agreement to compel a nonsignatory to arbitrate claims which are dependent upon, or inextricably intertwined with, the obligations imposed by an agreement. JSM Tuscany, LLC v. Super. Ct., 193 Cal. App. 4th 1222, 1240-41 (2d Dist. 2011). When a plaintiff brings a claim which "relies on contract terms" against a defendant, the plaintiff can be equitably estopped from repudiating the arbitration clause contained in that agreement. Id. at 1239. When a plaintiff sues on a contract on the basis that, even though the plaintiff is not a party, they are entitled to recover for its breach, "the plaintiff should be equitably estopped from repudiating the contract's arbitration clause." Id. (citations omitted).

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