Nationwide Biweekly Administration, Inc. v. BMO Harris Bank, N.A.

There are numerous legal and equitable concerns raised when, as here, a district court grants an order compelling arbitration and dismisses a third-party complaint when the original plaintiff was not a signatory to the arbitration agreement. First and foremost, the original plaintiff is prejudiced by the loss of their federal right to have their entire Article III case heard in federal court, including supplemental claims that fall under the supplemental jurisdiction statute, 28 U.S.C. § 1367. Second, compelling arbitration may result in contrary conclusions on factual issues, legal issues, or remedies between the federal court proceeding and the arbitration proceeding, since the original plaintiff is not before the arbitrator, and the thirdparty defendant is no longer before the federal court. Thus, the federal court and the arbitrator could reach different conclusions regarding the same “supplemental claims,” even though such claims “are so related to claims in the action” that “they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367. Accordingly, the question presented in this case is: 1. Whether a plaintiff loses their right to have all claims that form part of the same case or controversy under Article III of the United States Constitution heard in federal court, pursuant to 28 U.S.C. § 1367, solely because of the existence of an arbitration agreement between a third-party plaintiff and third-party defendant which the original plaintiff is not a signatory?