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Wednesday, February 14, 2007

Arbitration by Equitable Estoppel. In a class action antitrust case against certain credit card companies that had allegedly conspired to fix prices of foreign currencies, the Court had ordered the case to arbitration because of arbitration provisions in the customer agreements. The Court also held that the parties must arbitrate the case against companies with which the plaintiffs did not have an agreement under the doctrine of equitable estoppel.

Certain parties filed an action against American Express, advancing the same claims raised in the other case. Amex sought to dismiss the case and compel arbitration, but the district court denied the motion. Amex appealed and the plaintffs sought to dismiss the appeal, asserting that the Second Circuit lacked jurisdiction because the provision of the Federal Arbitration Act which allows interlocutory appeals of denials of motions to compel arbitration only apply when the arbitration is required by a written agreement, not when the requirement is based on the doctrine of equitable estoppel.

The Second Circuit denied the motion, holding that all of the plaintiffs had signed customer agreements with arbitration clauses (although not with Amex) and arbitration had been provided in the other case because the claims being asserted against the parties with whom there was no arbitration agreement were subject to arbitration because the claim against them were inextricably intertwined with the claims advanced against the defendant with whom the plaintiffs did agree to arbitrate. The Court noted that the arbitration clauses that the plaintiffs had signed controlled the scope of the arbitration and that the arbitration, therefore, was based on a written agreement. Accordingly, the Second Circuit held that it did have appellate jurisdiction.

The decision in Roth v. American Express Company can be found here.

Comments:
Good for people to know.
 
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