United States District Court, D. New Jersey
JOSEPHINE F. TAILOR and ALISON GEORGE, on behalf of themselves and those similarly situated,, Plaintiffs,
RUSHMORE SERVICE CENTER, LLC., et al.,, Defendants.
WILLIAM J. MARTINI, U.S.D.J.
matter comes before the Court on Defendants Rushmore Service
Center, LLC's, Miles K. Beacom's, Dale
Dobberpuhl's, and Thomas D. Sanford's Motion to
Compel Arbitration. ECF No. 20. For the reasons set forth
below, the Motion is DENIED.
Allegations in the Amended Complaint
F. Tailor and Alison George (“Plaintiffs”) bring
this purported class action against Rushmore Service Center,
LLC (“Rushmore”) and its managers Miles K.
Beacom, Dale Dobberpuhl, and Thomas D. Sanford
(“Defendants”) for alleged violations of the Fair
Debt Collection Practices Act (“FDCPA”), 15
U.S.C. § 1692, et seq. Amend. Compl. ¶ 2
(hereinafter, “AC”). Plaintiffs allegedly
incurred personal debts that became past due and in default.
AC ¶¶ 20, 26. The debts were “placed with or
assigned to Defendants for collection.” AC ¶ 26.
To collect the debts, Rushmore sent collection letters to
Plaintiffs. AC ¶¶ 27-29. “The collection
letters do not properly identify the name of the current
creditor to whom the debt is owed.” AC ¶ 32.
Specifically, Tailor's collection letter does not list a
current creditor and lists the original creditor” as
“PREMIER Bankcard, LLC, ” even though PREMIER
Bankcard, LLC was never the original creditor. AC
¶¶ 33, 35-36. Similarly, George's letter states
“Current/Original Creditor: PREMIER Bankcard, LLC,
” which Plaintiffs allege “is confusing as to
whether PREMIER Bankcard, LLC, is the current or original
creditor.” AC ¶ 34. Regardless, PREMIER Bankcard,
LLC was never the original creditor. AC ¶ 36. Plaintiffs
propose to represent a class and subclass made up of New
Jersey residents receiving similar collection letters from
Rushmore. AC ¶ 42.
The Motion to Transfer
Defendants move to compel arbitration and stay the current
proceedings. Defs' Br. in Support of Mot. to Arb, ECF No.
20 (hereinafter, “Motion”). They assert that
Plaintiffs incurred the debts described in the Amended
Complaint pursuant to credit card agreements that include an
arbitration clause. Mot. at 1-3. In support of that
contention, Defendants submit a declaration from Julie K.
Gilson (“Gilson Declaration”), an employee of
PREMIER Bankcard, LLC, the servicing entity for First Premier
Bank “FPB, ” which issued the credit cards.
Gilson Decl. ¶¶ 1, 4-5, ECF No. 20-2. She asserts
that after Plaintiffs applied for the credit cards, FPB
directed its data vendor to mail the applicable credit card
agreement to Plaintiffs' addresses. Id.
¶¶ 6-7. Gilson attached “exemplar Credit Card
Contract and Account Opening Disclosures containing the terms
and conditions” governing Plaintiffs accounts.
Id. ¶ 7. Those contracts included arbitration
clauses encompassing “all disputes arising out of or
connected to this contract” and applicable to
employees, affiliates, beneficiaries, agents, and assigns of
FPB. Id. Exs. A-B (capitalization adjusted); Mot. at
respond that because “arbitrability is not apparent
based on the face of the Complaint, ” the Motion should
be denied pending an opportunity for discovery. Pl. Mot. in
Opp. at 6, ECF No. 22 (hereinafter,
“Opposition”). In reply, Defendants make clear
that “[t]he Motion was brought under the Fed.R.Civ.P.
12(b)(6) standard, ” yet argue “Plaintiffs'
arguments fall flat as they are insufficient to challenge the
admissible evidence set forth in the Gilson
Declaration.” Defs' Reply Br. at 4-5, ECF No. 25
are authorized to compel arbitration “upon being
satisfied that the making of the agreement for arbitration .
. . is not in issue.” 9 U.S.C. § 4. “In
determining whether a valid arbitration agreement exists, a
court must first decide whether to use the Rule 12(b)(6) or
Rule 56 standard of review.” Torres v. Rushmore
Serv. Ctr., LLC, No. 18-9236, 2018 WL 5669175, at *2
(D.N.J. Oct. 31, 2018).
[W]here the complaint does not establish with clarity that
the parties have agreed to arbitrate . . ., a Rule 12(b)(6)
standard is not appropriate because the motion cannot be
resolved without consideration of evidence outside the
pleadings, and, if necessary, further development of the
factual record. In such circumstances, the non-movant must be
given a limited opportunity to conduct discovery on the
narrow issue of whether an arbitration agreement exists.
Afterwards, the court may entertain a renewed motion to
compel arbitration, this time judging the motion under a Rule
56, summary judgment standard.
Id. (citations omitted).
Defendants insist “[t]he Motion was brought under the
Fed.R.Civ.P. 12(b)(6) standard.” Reply at 4. Therefore,
granting the Motion would only be appropriate if the Amended
Complaint “establish[ed] with clarity that the parties
have agreed to arbitrate.” Torres, 2018 WL
5669175, at *2. It does not. No arbitration clause appears in
the Amended Complaint, nor any documented incorporated by
reference therein. See generally AC.
Defendant moved under Rule 12(b)(6) and not Rule 56, their
argument that Plaintiffs fail to “raise any valid
challenge to the . . . dispositive facts established by the
Gilson Declaration” is irrelevant. See Reply
at 5. As binding precedent makes clear, under the 12(b)(6)
standard, when arbitrability is not “apparent on the
face of the complaint, the motion to compel arbitration must
be denied pending further development of the factual
record.” Guidotti v. Legal Helpers Debt Resolution,
L.L.C., 716 F.3d 764, 774 (3d Cir. 2013). Therefore,
Plaintiffs must be given a limited opportunity to conduct
discovery on the narrow ...