3rd Party Exception Rule Bars Motion to Compel Arbitration, Calif. Appeals Court Affirms

LOS ANGELES — A California appeals court did not err in refusing to compel arbitration based on the third party litigation exception to the general rule requiring the enforcement of an agreement to arbitrate, an appeals court has ruled, finding the exception is not preempted by federal arbitration law.

In a Jan. 8 ruling, the California Court of Appeal, 2nd District, further found the exception is applicable to this case because one of the defendants in the action is not a party to the arbitration provisions at issue and the claims against it arise from the same transactions.

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