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Fifth Circuit Affirms Order Denying Motion to Compel Against Non-Signatories to Arbitration Agreement
June 09, 2020

The Fifth Circuit Court of Appeals affirmed a district court order denying the plaintiff's motion to compel arbitration against two non-signatories to the relevant contract. The plaintiff was issued a credit card by defendant Regions Bank. The credit card agreement contained an arbitration clause that the plaintiff relied on in seeking to compel arbitration of his claims against two of the three major credit bureaus, neither of which was a signatory to the credit card agreement. The district court denied the plaintiff's motion and the Fifth Circuit affirmed. The court found that neither of the credit bureau defendants had claims against either of the parties to the arbitration agreement - the plaintiff and Regions Bank - and that the agreement did not contemplate the consolidation of third-party claims under present circumstances. Thus, applying Alabama law, the court held that the credit bureau defendants could not be compelled to arbitrate the plaintiff's claims against them as they were neither expressly nor implicitly parties to the credit card agreement and were not otherwise third-party beneficiaries to it.

Patel v. Regions Bank, No. 19-30582 (5th Cir. Apr. 21, 2020).
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Image: Alex B. Silverman
Alex B. Silverman
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