Legal Memorandum: Right to Arbitrate a Dispute

Issue: Under federal law, may a third-party defendant claim a right to arbitrate a dispute with a third-party plaintiff?

The issue whether a claim is subject to arbitration is determined by whether there is a written agreement between the parties to arbitrate and whether such agreement encompasses the claims at issue.  It is irrelevant whether the parties are the plaintiff and the defendant, the third‑party plaintiff and third-party defendant, or some other combination.  As the Court of Appeals for the First Circuit stated in Maldonado v. PPG Indus., Inc., 514 F.2d 614, 617 (1st Cir. 1975), that the dispute involves parties to a third-party action rather than the first parties “is a distinction without a difference.”

Thus, in the case of a third-party action, the question always turns on whether there was a written agreement to arbitrate the claims at issue.  That is a question for the courts to resolve as a matter of law.  See Maldonado, 514 F.2d at 616; United Steel Workers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 583 n.7 (1960).

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