UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA 

BRUCE REASER, :

:CIVIL ACTION NO. 3:15-CV-1765

Plaintiff, :

:(JUDGE CONABOY)

v. :

:

CREDIT ONE FINANCIAL, :

d/b/a Credit One Bank, :

:

Defendant. :

:

___________________________________________________________________

MEMORANDUM

Here we consider Credit One’s Motion to Dismiss and Compel

Arbitration (Doc. 4) filed on December 7, 2015, and accompanied by

a supporting brief. (Docs. 4, 4-1.) Plaintiff filed his

opposition brief on December 21, 2015. (Doc. 6.) Defendant filed

a reply brief on January 7, 2016. (Doc. 7.) Therefore this matter

is fully briefed and ripe for disposition. For the reasons

discussed below, I conclude Defendant’s motion is properly denied. 

I. Background

Plaintiff filed this action on September 10, 2015, asserting a

claim under the Telephone Consumer Protection Act, 47 U.S.C. § 227

et seq. (“TCPA”). (Doc. 1 at 1.) Plaintiff specifically alleges

that “[b]eginning in or around early to mid April 2015, and

continuing through July 2015, Defendant called Plaintiff on his

cellular phone on a repetitive and continuous basis, on average,

twelve (12) to twenty (20) times a day.” (Doc. 1 at 2-3.) 

Plaintiff also alleges that Defendant used an automatic telephone

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dialing system and/or automatic and/or pre-recorded messages and

the calls were not made for emergency purposes. (Doc. 1 at 3.) 

Plaintiff further avers that, on the occasions when he spoke with a

live representative, he informed the representative that he was

unable to pay due to financial circumstances and requested that

Defendant not call his cellular phone, and despite the request, he

continued to receive calls on his cellular phone. (Id.) 

With this motion, Defendant asserts that Plaintiff agreed to

resolve any disputes between them in arbitration, Plaintiff’s

claims arise out of Plaintiff’s nonpayment of the credit card

account and Defendant’s subsequent attempts to contact Plaintiff,

Plaintiff’s claims are subject to the arbitration agreement, and

Plaintiff should be compelled to pursue his claims in arbitration. 

(Doc. 4-1 at 1.) 

Solicitation for the pre-approved credit card at issue was

mailed to Plaintiff in October 2014. (Doc. 4-1 at 2.) Defendant

does not retain actual copies of the solicitation it sends

potential customers. (Id.) Rather, Defendant provides a sample

copy of the solicitation as an exhibit attached to the Affidavit of

Gary Harwood in Support of Credit One’s Motion to Dismiss and

Compel Arbitration. (Doc. 4-2 at 2-5; Doc. 4-3.) The “AGREEMENT”

portion of the Disclosures and Important Information included in

the solicitation includes the following pertinent language: 

If this application is accepted and one or

more credit cards are issued, I agree to pay

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all charges incurred in accordance with the

terms and conditions of the Acceptance

Certificate, Cardholder Agreement, Disclosure

Statement and Arbitration Agreement . . .

which will be sent with my card. I

understand that once my credit card Account

is opened, it will be subject to the terms

and conditions of the Cardholder Agreement,

Disclosure Statement and Arbitration

Agreement sent with my card. 

(Doc. 4-3.) The Disclosures and Important Information also

contains the following language under the heading “ARBITRATION

AGREEMENT”: “You and we agree that either you or we may, without

the other’s consent, require that any dispute between you and us be

submitted to mandatory, binding arbitration. A more detailed

description of this Arbitration Agreement will be sent with your

card.” (Doc. 4-3.) The Acceptance Certificate was signed by

Plaintiff and dated October 10, 2014. (Doc. 4-4 at 2.) The

following language precedes the signature line of the Acceptance

Certificate: “By signing/submitting this Acceptance Certificate, I

have read the terms and conditions on this Acceptance Certificate

and the ‘Disclosures and Important Information’ brochure, and agree

to be bound by those terms.” (Id.) 

According to Mr. Harwood’s affidavit, Defendant issued

Plaintiff a Visa credit card, and, per Defendant’s policy and

ordinary business practice, in the same envelope it included a copy

of the Visa/Mastercard Cardholder Agreement, Disclosure Statement

and Arbitration Agreement which is attached to the Affidavit. 

(Doc. 4-2 at 3-4; Doc. 4-5 at 3-8.) The introductory language of

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the Visa/Mastercard Cardholder Agreement, Disclosure Statement and

Arbitration Agreement which is attached to the Affidavit states the

following: “This Agreement, together with the application you

previously signed and the enclosed Arbitration Agreement, governs

the use of your VISA or Mastercard Account issued by Credit One

Bank, N.A. . . . By requesting and receiving, signing or using your

Card, you agree as follows: IMPORTANT NOTICE: Please read the

Arbitration Agreement portion of this document for important

information about your and our legal rights under this Agreement.” 

(Doc. 4-5 at 3.) The ARBITRATION portion of the document advises

the cardholder “PLEASE READ THIS PROVISION OF YOUR CARD AGREEMENT

CAREFULLY. IT PROVIDES THAT EITHER YOU OR WE CAN REQUIRE THAT ANY

CONTROVERSY OR DISPUTE BE RESOLVED BY BINDING ARBITRATION. 

ARBITRATION REPLACES THE RIGHT TO GO TO COURT.” (Doc. 4-5 at 7.) 

The Agreement to Arbitrate states: “You and we agree that either

you or we may, without the other’s consent, require that any

controversy or dispute between you and us (all of which are called

“Claims”), be submitted to mandatory, binding arbitration.” (Id.) 

Claims subject to arbitration specifically include “communications

relating to your account . . . or collections matters relating to

your account” and claims based “on any theory of law, any contract,

statute, regulation [or] tort.” (Id.) The agreement also provides

that “[a]ny questions about what Claims are subject to arbitration

shall be resolved by interpreting this arbitration provision in the

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broadest way the law will allow it to be enforced.” (Id.) Also

pertinent is the statement regarding litigation: “If you or we

require arbitration of a particular Claim, neither you, we, nor any

other person may pursue the Claim in any litigation, whether a

class action, private attorney general action, other representative

action or otherwise.” (Id.) 

According to Mr. Harwood’s affidavit, Plaintiff activated his

account on or about November 20, 2014, by telephone via Credit

One’s Interactive Voice Response System. (Doc. 4-2 at 4.) 

Documents attached to the affidavit also show that Plaintiff made

charges to the account using his VISA credit card. (Doc. 4-6.) 

 II. Discussion

Defendant asserts that Plaintiff’s TCPA claims for improper

phone calls arise out of and directly relate to his Credit One

credit card and his nonpayment of the account and because Plaintiff

and Defendant agreed to arbitrate such a Claim, the Court should

dismiss the Complaint and allow the parties to resolve their

dispute in arbitration. (Doc. 4-1 at 5.) Plaintiff avers that

Defendant’s motion is deficient for the following reasons: 1)

Plaintiff has stated a claim for relief under the TCPA; 2)

Defendant has failed to meet its burden of establishing the

existence of a valid and binding contract and that Plaintiff agreed

to the terms upon which Defendant relies in that the affidavit of

Gary Hardwood is insufficient; 3) Defendant has failed to produce

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any evidence that Plaintiff opened any account or that he was put

on notice of the existence of any arbitration agreement; and 4) any

existing arbitration clause is unconscionable. (Doc. 6 at 6-7.) 

A. Legal Standards 

“To determine whether the parties agreed to arbitrate, we turn

to ‘ordinary principles that govern the formation of contracts.’” 

Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3d 156, 160 (3d

Cir. 2009) (quoting First Options of Chicago, Inc. v. Kaplan, 514

U.S. 938, 944 (1995)). Under Pennsylvania law, a motion to compel

arbitration can only be granted if the court determines that “(1) a

valid agreement to arbitrate exists, and (2) the particular dispute

falls within the scope of that agreement.” Id. (citing Trippe Mfg.

Co. v. Niles Audio Corp., 401 F.3d 529, 532 (3d Cir. 2005); Quiles

v. Fin. Exch. Co., 879 A.2d 281, 283 n.3 (Pa. Super. 2005)). 

Contract formation under Pennsylvania law requires “(1) a mutual

manifestation of an intention to be bound, (2) terms sufficiently

definite to be enforced, and (3) consideration.” Id. (citing Blair

v. Scott Specialty Gases, 283 F.3d 595, 603 (3d Cir. 2002)). 

The Court of Appeals for the Third Circuit clarified the

appropriate standard district courts are to apply when determining

whether an agreement to arbitrate was actually reached in Guidotti

v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764 (3d Cir.

2013). The clarification was necessary because some cases

supported “‘the traditional practice of treating a motion to compel

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arbitration as a motion to dismiss for failure to state a claim

upon which relief can be granted,’ under Rule 12(b)(6) of the

Federal Rules of Civil Procedure.” Guidotti, 716 F.3d at 771

(quoting Palcko v. Airborne Express, Inc., 372 F.3d 588, 597 (3d

Cir. 2004)). Other cases “said, however, ‘that when considering a

motion to compel arbitration . . . [a district court] should’

employ ‘the standard used . . . in resolving summary judgment

motions pursuant to [Rule 56 of the Federal Rules of Civil

Procedure].’” Id. (quoting Par-Knit Mills, Inc. v. Stockbridge

Fabrics Co., Ltd., 636 F.2d 51, 54 & n.9 (3d Cir. 1980)

(alternation in Guidotti); citing Kaneff v. Del. Title Loans, Inc.,

587 F.3d 616, 620 (3d Cir. 2009)). After noting that inconsistent

pronouncements on the applicable standard for evaluating motions to

compel arbitration “are perhaps explained by the FAA [Federal

Arbitration Act], and by the values underlying contract

interpretation,” Guidotti summarized the reconciliation of the

split pronouncements.

[W]hen it is apparent, based on the face of a

complaint, and documents relied upon in the

complaint that certain of a party’s claims

are subject to an enforceable arbitration

clause, a motion to compel arbitration should

be considered under a Rule 12(b)(6) standard

without discovery’s delay. . . . But if the

complaint and its supporting documents are

unclear regarding the agreement to arbitrate,

or if the plaintiff has responded to a motion

to compel arbitration with additional facts

sufficient to place the agreement to

arbitrate in issue, then the parties should

be entitled to discovery on the question of

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arbitrability before a court entertains

further briefing on the question. . . . After

limited discovery, the court may entertain a

renewed motion to compel arbitration, this

time judging the motion under a summary

judgment standard. 

716 F.3d at 776 (internal quotations omitted). 

In a case recently decided in the Middle District of

Pennsylvania, District Judge Yvette Kane determined that a motion

almost identical to that at issue here was properly denied because

a similar complaint did not reference an arbitration clause and

neither party contended that the complaint establishes

arbitrability on its face. Rajput v. Credit One Financial, Civil

Action No. 1:15-cv-00807, 2015 WL 8012938, at *2 (M.D. Pa. December

7, 2015); see also Griffin v. Credit One Financial, Civil Action

No. 15-3700, 2015 WL 6550618 (E.D. Pa. Oct. 29, 2015).

In its reply brief (Doc. 7) Defendant does not address the

Third Circuit standard noted by Plaintiff: “Where an arbitration

agreement is not apparent from the face of the Plaintiff’s

Complaint, the Third Circuit uses the summary judgment standard in

determining whether a valid arbitration clause exists and binds the

parties[,]” (Doc. 6 at 9 & n.1 (citing Sanford v. Bracewell &

Guiliani, LLP, 618 F. App’x 114 (3d Cir. 2015)).) Nor does

Defendant address the Guidotti standard upon which Sanford relies,

618 F. App’x at 117, and which we must follow. 

Because Defendant does not address Guidotti’s guidance on the

issue before us and because the agreement to arbitrate is not clear

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from the face of the Complaint, this appears to be a case where the

parties should be entitled to discovery on the question of

arbitrability. 716 F.3d at 776. Therefore, consistent with Judge

Kane’s decision in Rajput, 2015 WL 8012938, we will deny Credit

One’s Motion to Dismiss and Compel Arbitration (Doc. 4), and

limited discovery will be allowed on the narrow issue concerning

the validity of the arbitration agreement. Id. at n.2; Guidotti,

716 F.3d at 775. 

III. Conclusion

For the reasons discussed above, Defendant has not met its

burden of establishing that Credit One’s Motion to Dismiss and

Compel Arbitration (Doc. 4) is properly granted. Therefore, this

motion is denied. An appropriate Order is filed simultaneously

with this Memorandum. 

S/Richard P. Conaboy

 RICHARD P. CONABOY

United States District Judge

DATED: January 21, 2016

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