A lawsuit is often brought against a primary defendant, but names other defendants who may be vicariously liable on theories like agency or conspiracy. If the primary defendant signed an arbitration agreement and has the right to compel arbitration, the non-signatories may have a similar right. JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1238–39. That is, a nonsignatory defendant can compel a signatory plaintiff to arbitrate under the doctrine of equitable estoppel. For the doctrine to apply, the claims the plaintiff asserts against the nonsignatory must be dependent upon, or founded in and inextricably intertwined with, the underlying contractual obligations of the agreement containing the arbitration clause. This doctrine prevents a party from using the terms or obligations of an agreement as the basis for their claims against a nonsignatory, while simultaneously refusing to arbitrate with the nonsignatory under another clause of that same agreement.
How to gauge “inextricably intertwined” –Courts applying this doctrine against a signatory have looked to the relationships of persons, wrongs, and issues, particularly whether the claims the nonsignatory sought to arbitrate are intertwined with the underlying contract obligations. Claims that rely upon, make reference to, or are intertwined with claims under the subject contract are arbitrable.