Noye v. Johnson & Johnson

310 F. Supp. 3d 470
CourtDistrict Court, M.D. Pennsylvania
DecidedMay 11, 2018
DocketNo. 1:15–cv–2382
StatusPublished
Cited by4 cases

This text of 310 F. Supp. 3d 470 (Noye v. Johnson & Johnson) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Noye v. Johnson & Johnson, 310 F. Supp. 3d 470 (M.D. Pa. 2018).

Opinion

III. DISCUSSION

A. Equitable Estoppel and Whether a Non-Signatory May Compel Arbitration

A non-signatory to an arbitration agreement may bind a signatory to that agreement in certain circumstances under the theory of equitable estoppel. See, e.g., Dwayne E. Williams, Binding Nonsignatories to Arbitration Agreements, 25-SPG FRANCHISE L.J. 175, 178 (2006) ("Equitable estoppel is typically applied against signatory plaintiffs ... to compel them to arbitrate claims asserted against defendant nonsignatories to the arbitration agreement."); see also Abrams v. Chesapeake Energy Corp., Nos. 4:16-cv-1343, 4:16-cv-1345, 4:16-cv-1346, 4:16-cv-1347, 2017 WL 6541511, at *8 (M.D. Pa. Dec. 21, 2017) (citing Griswold v. Coventry First LLC, 762 F.3d 264, 271 (3d Cir. 2014) ). "[W]hen a signatory resists arbitration, courts may use equitable estoppel to join a 'willing' nonsignatory to a proceeding where arbitration between the underlying signatory participants is appropriate." Alexandra Anne Hui, Equitable Estoppel and the Compulsion of Arbitration, 60 VAND. L. REV. 711, 728-29 (2007) (quoting David F. Sawrie, Equitable Estoppel and the Outer Boundaries of Federal Arbitration Law: The Alabama Supreme Court's Retrenchment of an Expansive Federal Policy Favoring Arbitration, 51 VAND. L. REV. 721, 736 (1998) ). However, within the Third Circuit, the use of equitable estoppel by a non-signatory to compel arbitration is limited to circumstances in which there is a close relationship among the entities involved, as well as a connection between the wrongs allegedly committed by the non-signatory and the non-signatory's obligations and duties under the relevant contract. See id. (citing E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.A., 269 F.3d 187 (3d Cir. 2001) ).

1. Applicable Law on Equitable Estoppel

i. Pennsylvania and Michigan Law

The Court's choice of law analysis is governed by Pennsylvania choice of law rules, as Pennsylvania is the forum state. See, e.g., LaSala v. Bordier et Cie, 519 F.3d 121, 140 (3d Cir. 2008) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) ). As noted by the parties in their respective briefs, both Pennsylvania and Michigan- the only states whose laws would be applicable *475to the Court's analysis of equitable estoppel in this case-permit a non-signatory to compel a signatory to arbitrate claims against it under certain circumstances.2 (Doc. Nos. 75 at 14, 77 at 8, 85 at 6, 86 at 4, 87 at 2.) Under Pennsylvania law, "non-signatories to an arbitration agreement can enforce such an agreement when there is an obvious and close nexus between the non-signatories and the contract or the contracting parties," and the claims involved are "inextricably entwined with the [c]ontract." See Elwyn v. DeLuca, 48 A.3d 457, 463 (Pa. Super. 2012) (quoting Dodds v. Pulte Home Corp., 909 A.2d 348, 351 (Pa. Super. Ct. 2006) ).

Similarly, Michigan Law recognizes that "a party to an arbitration agreement may be equitably estopped from litigating its claims against non-parties in court and may be ordered to arbitration" under circumstances in which: (1) "the signatory to a written agreement containing an arbitration clause must rely on the terms of the written agreement in asserting its claims against a non-signatory;" or (2) "when the signatory raises allegations of substantially interdependent and concerted misconduct by both the non-signatory and one or more signatories to the contract." See Tobel v. AXA Equitable Live Ins. Co., No. 298129, 2012 WL 555801, at *11 (Mich. Ct. App. Feb. 21, 2012) (citing Grigson v. Creative Artists Agency, LLC, 210 F.3d 524, 528 (5th Cir. 2000) ). Because both Pennsylvania and Michigan law on equitable estoppel ultimately hinge on the relationship or connection between the relevant parties, the Court concludes that no conflict exists and either state's law can be applied to the Court's equitable estoppel analysis.

ii. Third Circuit's Acknowledgment of Equitable Estoppel in DuPont

In E.I. Dupont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S., the United States Court of Appeals for the Third Circuit discussed the applicability of equitable estoppel to arbitration agreements, remarking that although the court had not previously "applied an equitable estoppel theory to bind a non-signatory to an arbitration clause[,] there appears to be no reason why, in an appropriate case, [the court] would refrain from doing so."See DuPont, 269 F.3d 187 at 199. DuPont involved a joint venture agreement, which "ultimately failed and DuPont ... brought suit against [the defendants] to recover ... not for breach of the [a]greement, to which it was not a party, but rather for breach of an oral agreement and fraudulent misrepresentations." Id. at 191.

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Bluebook (online)
310 F. Supp. 3d 470, Counsel Stack Legal Research, https://law.counselstack.com/opinion/noye-v-johnson-johnson-pamd-2018.