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Individuals Sued Under Alter Ego Can Compel Arbitration

Until this week, no published case had expressly decided whether, under California law, alleged alter ego nonsignatories to an arbitration agreement could enforce that agreement, though one had recognized the existence of this theory under federal arbitration law (Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 268). On Tuesday, in Rowe v. Exline, the First District Court of Appeal addressed the issue for the first time in California, holding that individual defendants, who were not signatories to a contract containing an arbitration provision but were sued as alter egos of a corporate defendant who was a signatory, can compel another signatory party to arbitrate the controversies raised in the complaint. You can download the opinion here in pdf or word format.

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