This Week At The Ninth: Arbitration Two Ways

This week, the Ninth Circuit addresses the ability of non-parties to invoke arbitration agreements, and refreshes its law on the applicability of Eleventh Amendment sovereign immunity in the arbitration context.

KIM NGO V. BMW OF NORTH AMERICA, LLC

The Court holds that a non-signatory car manufacturer could not enforce an arbitration clause in a purchase agreement between a customer and a car dealership.

Panel: Judges Wardlaw, Parker (2d Cir.), and Hurwitz, with Judge Parker writing the opinion.

Key Highlight: "The clause is pellucid that only three parties may compel arbitration, none of which is BMW. Language limiting the right to compel arbitration to a specific buyer and a specific dealership (and its assignees) means that extraneous third parties may not compel arbitration."