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When parties employ broad language in arbitration provisions, courts will broadly construe the scope of the arbitrable issues within to encompass all claims that would refer "to the contract or relationship at issue," according to the United States District Court for the Northern District of Ohio.
In Health Quip, Inc. v. 8805, Inc., No. 1:06 CV 3002, 2007 WL 1452629 (N.D. Ohio May 15, 2007), the buyer of a health care company sought to stay court proceedings initiated by the seller, arguing that the various statutory, contract, and tort claims raised in the lawsuit were within the scope of arbitration provisions contained in the sale documents.
The Court held that the claims raised in the court proceedings were within the scope of the arbitration provisions. It noted the "broad" language contained within the arbitration provisions, indicating that all claims which arose out of the agreements "should be reserved for arbitration."
The Court applied the Sixth Circuit's analysis for determining what lies outside the scope of a "broad" arbitration clause, considering "if an action could be maintained without reference to the contract or relationship at issue." The issues raised in the court proceedings were found to arise out of the contractual relationship memorialized in the agreements, and therefore within the scope of the agreements' arbitration provisions.
Federal RICO claims were also determined to be arbitrable by the Court, since Congress had expressed no contrary intent to forbid arbitration of RICO claims.
Since court claims involving individual defendants not subject to arbitration agreements "depended upon the same facts" and were "inherently inseparable from the arbitrable claims," a stay on the court proceedings was ordered pending the outcome of arbitration.
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