In Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764 (3d Cir. 2013), the Third Circuit addressed the question of, when considering a motion to compel arbitration, what standards district courts should apply when determining whether an agreement to arbitrate was actually formed between the parties. The court held that the Rule 12(b)(6) standard should apply when the arbitrability of claims is apparent on the face of a complaint, or documents replied upon in the complaint. Otherwise, the Rule 56 summary judgment standard applies.
In Guidotti, the court also suggested that, where arbitrability was not established on the face of the complaint:
a restricted inquiry into factual issues will be necessary to properly evaluate whether there was a meeting of the minds on the agreement to arbitrate, and the non-movant “must be given the opportunity to conduct limited discovery on the narrow issue concerning the validity of the arbitration agreement
Some district courts had read this language in Guidotti as mandating the denial of a motion to compel pending such limited discovery wherever the 12(b)(6) standard was not satisfied.
Today, in Young v. Experian Information Solutions, the Third Circuit, in an opinion authored by Judge Jordan–who had also authored Guidotti–clarified that discovery was not always required in such scenarios. Rather, only, as “will often be the case,” where a factual dispute over the existence of an agreement exists will discovery be appropriate.
[D]iscovery addressing a motion to compel arbitration is unnecessary when no factual dispute exists as to the existence or scope of the arbitration agreement.
Since, in the case before it, there was no factual dispute as to the existence of the agreement, but rather only to its scope and enforceability–which were delegated to the arbitrator to decide, there was no basis for discovery, and the Third Circuit held the district court should have granted the motion to compel arbitration.
