Arbitration Clause Does Not Apply When Consideration of Agreement Is Not Necessary to Determine the Merits of Claims

The Federal Arbitration Act (the “FAA”) embodies a strong federal policy in favor of arbitration.  When the existence of an arbitration agreement is undisputed, any doubts as to whether a claim falls within the scope of that agreement should be resolved in favor of arbitrability.  Despite the broad reach of the FAA, a recent decision issued in Salgado v. NYC Medical Practice P.C. d/b/a Goals Aesthetics & Plastic Surgery, 22-CV-06910(LAK)(SN), 2022 WL 17974915 (S.D.N.Y. Dec. 28, 2022) illustrates that claims may bypass arbitration if the agreement providing for arbitration need not be considered to determine if such claims are meritorious.

In Salgado, the plaintiff signed a contract pertaining to her plastic surgery that contains an arbitration clause.  She declined to allow defendant to use her name, photographs, video images, or written testimonials for marketing purposes, although she did allow the use of two non-identifying photos of her that would not include her face.  Without authorization, defendant later posted four self-identifying photos of plaintiff to defendant’s Instagram story, which identified plaintiff’s name and the type of procedure that plaintiff received.  Plaintiff filed an action alleging that defendant’s actions violated the False Copyright Management Information provision of the Digital Millennium Copyright Act and N.Y. Civil Rights Law § 51.  Defendant moved to compel arbitration.

Even though the Court in Salgado found the arbitration provision in the contract arising from plaintiff’s plastic surgery to be broad, it denied the motion to compel arbitration because it concluded that plaintiff’s claims do not arise out of, or relate to, the contract; the contract does not address the use of plaintiff’s name, image, likeness, or photographs.  2022 WL 17974915, at *3–4.  None of the terms of the agreement are relevant to adjudicate merits of the claims.  Id. at *4.  Hence, the court held that the broad arbitration clause did not reach the parties’ dispute.

If you have any questions about the FAA or the arbitrability of a dispute, please contact Michael Rakower or Melissa Yang.