Commercial Litigation and Arbitration

In Determining Arbitrability, Court Focuses on Factual Allegations of Complaint, Not Legal Claims

From E.S. Originals Inc. v. Totes Isotoner Corp., 734 F. Supp. 2d 523 (S.D.N.Y. 2010):

"Because the arbitration clause is narrow, the next question is 'whether the dispute is over an issue that is on its face within the purview of the clause, or over some collateral issue that is somehow connected to the main agreement that contains the arbitration clause.'" Negrin v. Kalina, No. 09 Civ. 6234, 2010 U.S. Dist. LEXIS 71068, at *16 (S.D.N.Y. July 15, 2010) (Jones, J.) (quoting Louis Dreyfus Negoce, 252 F.3d at 224 (internal quotation marks omitted)); cf. ACE Capital Re Overseas Ltd. v. Cent. United Life Ins. Co., 307 F.3d 24, 34 (2d Cir. 2002) ("'[W]hen parties use expansive language in drafting an arbitration clause, presumably they intend all issues that touch matters within the main agreement to be arbitrated, while the intended scope of a narrow arbitration clause is obviously more limited.'" (quoting Louis Dreyfus, 252 F.3d at 225)). "In determining whether a particular claim falls within the scope of the parties' arbitration agreement, this Court 'focuses on the factual allegations in the complaint rather than the legal causes of action asserted.'" Specht v. Netscape Comm. Corp., 306 F.3d 17, 36 (2d Cir. 2002) (Sotomayor, J.) (quoting Genesco, Inc. v. T. Kakiuchi & Co., Ltd., 815 F.2d 840, 846 (2d Cir. 1987)); see also Abduljaami v., Inc., No. 05 Civ. 9464, 2006 U.S. Dist. LEXIS 26327, at *12 (S.D.N.Y. Apr. 25, 2006) (Lynch, J.) ("When determining whether a claim is subject to arbitration, courts must look to the factual allegations in the complaint, not the causes of action asserted by the plaintiff."); JVN Music, Inc. v. Rodriguez, No. 99 Civ. 11889, 2000 U.S. Dist. LEXIS 8771, at *9-10 (S.D.N.Y. June 27, 2000) ("[W]hether a contractual arbitration agreement is deemed to be broad or narrow, a court must look to the factual allegations in the complaint rather than the legal claims asserted for aid in determining whether a specific issue is covered by the arbitration agreement.").

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