PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 21-2438

_____________

BENJAMIN ZIRPOLI, individually and on behalf of all 

others similarly situated

 

v.

MIDLAND FUNDING, LLC; MIDLAND CREDIT 

MANAGEMENT, INC.

MIDLAND FUNDING, LLC.,

Appellant

______________

On Appeal from United States District Court for the Middle 

District of Pennsylvania

(D. C. No. 1-19-cv-01428)

District Court Judge: Honorable Jennifer P. Wilson

______________

Argued June 22, 2022

Before: McKEE, RESTREPO, and BIBAS, Circuit Judges

(Filed: September 1, 2022)

Kevin J. Abramowicz

Kevin W. Tucker

East End Trial Group

6901 Lynn Way

Suite 215

Pittsburgh, PA 15208
2

Karla Girbride [ARGUED]

Public Justice

1620 L Street, N.W.

Suite 630

Washington, DC 20036

John B. Keller

Keller Keller Beck & Ross

1035 Wayne Avenue

Chambersburg, PA 17201

Counsel for Appellee

Lauren M. Burnette [ARGUED]

Messer Strickler Burnette

12276 San Jose Boulevard

Suite 718

Jacksonville, FL 32223

Counsel for Appellant

_______________________

OPINION

_______________________

McKEE, Circuit Judge.

Arbitration is a contractual obligation. Thus, parties to 

a contract may delegate questions of arbitrability to an 

arbitrator. If parties clearly and unmistakably make this

choice, then district courts generally must send threshold 

questions of arbitrability to arbitration to comply with the 

parties’ agreement. 

Here, OneMain Financial Group legally contracted with 

Benjamin Zirpoli. This contract includes a clause that delegates 

any question of arbitrability to arbitrators. OneMain then 

assigned this contract to Midland Funding LLC. Litigation 

between Midland and Zirpoli ensued, and Midland filed a 

motion to compel arbitration. Zirpoli opposes that motion,

arguing that Midland cannot compel arbitration because 

OneMain’s assignment to Midland is void under Pennsylvania 
3

law. We must decide if the District Court erred in not granting 

the motion to compel and refusing to refer the dispute to an 

arbitrator. For the reasons that follow, we hold that the court 

did err and that the motion to compel should have been granted.

I.

OneMain is a consumer discount company: a non-bank 

finance company that makes, buys, or sells consumer loans in 

amounts under $25,000 with combined fees, interest, charges, 

and other amounts that aggregate in excess of 6% per year.

Zirpoli applied for and received a loan from OneMain (the 

“Loan”). Under the terms of the Loan, Zirpoli was to borrow 

$6,200.08 and repay at a rate of 26.91% (for a total of 

$11,364.35). His Loan was issued under the Consumer 

Discount Company Act (CDCA), a consumer protection 

statute, which creates an exception to, and is a corollary of,

Pennsylvania’s usury law.1 The obligations of the Loan are 

governed by a disclosure statement, note and security 

agreement, and an arbitration agreement. 

The arbitration agreement states: 

You and We agree that either You or We have an 

absolute right to demand that any Claim be 

submitted to an arbitrator in accordance with this 

Arbitration Agreement. If either You or We file 

a lawsuit, counterclaim, or other action in court, 

the other party has the absolute right to demand 

arbitration following the filing of such action.2

The “Definitions for Arbitration Agreement” section provides: 

“We” or “Us” or “Our” means the Lender under 

the Note listed above, its past, present or future 

respective parents, subsidiaries, affiliates, 

predecessors, assignees, successors, and their 

respective employees, agents, directors, and 

officers. . . . “Claim” means any case, 

controversy, dispute, tort, disagreement, lawsuit, 

1 7 PA. STAT. AND CONS. STAT. ANN. §§ 6201–6219 (West 

2022).

2

JA 82.
4

or claim now or hereafter existing between You 

and Us.3

Pursuant to the terms of the agreement, a claim “includes, 

without limitation, anything related to”:

The Note, this Agreement, or the enforceability, 

or the arbitrability of any Claim pursuant to this 

Agreement, including but not limited to the 

scope of this Agreement and any defenses to 

enforcement of the Note or this Agreement; . . . 

[and] [a]ny federal or state statute or regulation, 

or any alleged violation thereof, including 

without limitation insurance, usury, and lending 

laws.

Midland is a Delaware limited liability corporation. Its

sole business is purchasing defaulted consumer debt. After 

Zirpoli and OneMain executed the Loan, OneMain and 

Midland executed a sales agreement through which OneMain

sold several delinquent accounts to Midland; those accounts 

included Zirpoli’s Loan. Midland acquired these accounts in a 

sales agreement even though it did not possess a CDCA license 

or request approval from the Department of Banking.4

OneMain’s records show that it had charged-off Zirpoli’s 

account with an outstanding balance of $7,391.90. 

After acquiring Zirpoli’s Loan from OneMain, Midland 

sued Zirpoli to collect the amount Zirpoli owed on the Loan.

Zirpoli hired counsel and entered a defense, but Midland 

thereafter dismissed the suit rather than litigating. Subsequent 

to dismissing the litigation, Midland allegedly attempted to 

collect the delinquent Loan by reporting it to various consumer 

agencies, thereby negatively impacting Zirpoli’s credit.

Midland also allegedly obtained and used Zirpoli’s credit 

report from various consumer reporting agencies. 

3

Id. 

4 The CDCA prohibits CDCA licensees from “sell[ing] 

contracts to a person or corporation not holding a license . . . 

without the prior written approval of the Secretary of 

Banking.” 7 P.S. § 6214.I. 
5

In response, Zirpoli filed this class action lawsuit in the 

Middle District of Pennsylvania. He alleged that Midland’s 

collection activities including the since-dismissed lawsuit and 

reporting the Loan delinquency to credit agencies constituted

an unlawful attempt to collect the Loan. Zirpoli contends that 

because Midland does not have a CDCA license and never 

obtained nor requested approval from the Department of 

Banking, Midland was not lawfully permitted to purchase the 

Loan. Accordingly, he argues, Midland’s attempts to collect on 

the Loan violated several consumer protection acts. 

Midland responded to the suit by filing a motion to 

compel arbitration and to stay the proceedings. The District 

Court denied this motion without prejudice, finding that it was 

not apparent from the face of the complaint that Zirpoli’s 

claims were subject to a valid and enforceable arbitration 

agreement and that discovery was necessary. The District 

Court then ordered additional, limited discovery on the 

following issues:

▪ Whether the Secretary of Banking approved the 

purported transaction involving Midland 

Funding, an unlicensed consumer-discount 

company;

▪ Whether, in accordance with the terms of the sale 

agreement, Midland Funding obtained approval 

to compel arbitration with Zirpoli; and, 

▪ Whether Midland Funding maintains a clear 

chain of title to the loan account.5

Thereafter, the District Court found that the discovery 

revealed that (1) the Pennsylvania Secretary of Banking did not 

approve the assignment between OneMain and Midland, and 

(2) Midland was not licensed under the CDCA during the time 

period at issue in this litigation. 

Midland then filed a renewed motion to compel 

arbitration and to stay proceedings. It argued that it obtained 

the right to enforce Zirpoli’s obligations under the Loan as part 

of the purchase agreement with OneMain, including the right 

to compel arbitration. Zirpoli renewed his objection to the 

motion, arguing that the assignment was illegal and void and 

5

JA 298–99.
6

that he was therefore not bound by the arbitration clause in the 

agreement between OneMain and Midland. The District Court 

denied Midland’s motion to compel. In doing so, it focused on 

the validity of the assignment from OneMain and Midland and 

reasoned that was the dispositive question governing 

arbitrability. The District Court then denied as moot Midland’s 

motion to stay. This appeal follows. 

II.

6

We are once again confronted with the “mind-bending 

issue” of arbitration about arbitration.7 Not too long ago, we 

answered the question of “[w]ho decides—a court or an 

arbitrator—whether an agreement exists, when the putative 

agreement includes an arbitration provision empowering an 

arbitrator to decide whether an agreement exists.”8 We held 

that “questions about the ‘making of the agreement to arbitrate’ 

are for the courts to decide unless the parties have clearly and 

unmistakably referred those issues to arbitration in a written 

contract whose formation is not in issue.”9 We are confronted 

with the question of whether a challenge to the legality of an

assignment of a loan that is subject to an agreement to arbitrate 

challenges the very formation of the arbitration agreement. We 

hold that it does not. Accordingly, the District Court erred in 

6 The District Court had subject matter jurisdiction pursuant 

to 28 U.S.C. § 1332. We review the denial of a motion to 

compel arbitration de novo. Harper v. Amazon.com Services, 

Inc., 124 F.4th 287, 292 n.3 (3d Cir. 2021). Because 

Midland’s renewed motion came after the parties had 

completed a period of discovery on the arbitration issue, we 

apply the same standard of review district courts use when 

resolving motions for summary judgment. See Guidotti v. 

Legal Helpers Debt Resol., LLC, 716 F.3d 764, 776 (3d Cir. 

2013). We thus give the benefit of all reasonable doubts and 

inferences to the party opposing arbitration. Griswold v. 

Coventry First LLC, 762 F.3d 264, 270 (3d Cir. 2014). 

7 David Horton, Arbitration About Arbitration, 70 STAN. L.

REV. 363, 370 (2018). 

8 MZM Constr. Co., Inc. v. New Jersey Bldg. Labs. Statewide 

Benefit Funds, 974 F.3d 386, 392 (3d Cir. 2020).

9

Id. 
7

finding that it had the authority to adjudicate this question of 

arbitrability. 

A. Section 4 of the Federal Arbitration Act

Zirpoli argues that the District Court did not have 

jurisdiction to resolve Midland’s motion to compel in the first 

place because it is not a “party” under § 4 of the Federal 

Arbitration Act.10 We must address this jurisdictional 

argument before reaching the question of arbitrability. 

Section 4 provides:

A party aggrieved by the alleged failure, 

neglect, or refusal of another to arbitrate under a 

written agreement for arbitration may petition 

any United States district court which, save for 

such agreement, would have jurisdiction ... 

[over] the subject matter of a suit arising out of 

the controversy between the parties, for an order 

directing that such arbitration proceed in the 

manner provided for in such agreement.11

Zirpoli claims that to be a party under this section, Midland 

must actually be a party to an arbitration agreement.12 He 

reasons that Midland is not a party to the arbitration agreement 

because the assignment from OneMain was invalid, and thus, 

according to Zirpoli, Midland could not petition the court to 

compel arbitration.13

The argument does have facial appeal; however, we are 

not persuaded. The most natural reading of “party” in § 4 is 

that it refers to a party to a litigation. The Supreme Court has 

read “parties” in § 3 of the Act to mean “litigants.”14 And we 

presume that Congress uses words consistently throughout a 

10 Appellee Br. at 36–37. 

11 9 U.S.C. § 4. 

12 Appellee Br. at 36. 

13 Id. 

14 Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 632 (2009) 

(“[A] litigant who was not a party to the relevant arbitration 

agreement may invoke §3 if the relevant state contract law 

allows him to enforce the agreement.”).
8

statute.15 That suggests that “party” means “litigant” in both §§

3 and 4.

Though context can rebut this presumption, we find that 

the context of § 4 here actually confirms that “party” means 

“party to litigation.”16 “Party” or “parties” is used eight times 

in § 4.

17 Even Zirpoli admits that many of these uses refer most 

naturally to litigants.18 Accordingly, we conclude that “parties”

in § 4 refers to litigants. Therefore, the District Court had 

jurisdiction to hear Midland’s motion to compel arbitration. 

B. Arbitrability

Accordingly, we must resolve the “threshold 

arbitrability question”—who decides whether the parties must 

arbitrate: the arbitrator or the court—before a question of 

arbitrability can be decided.

19 In other words, courts must 

figure out whether the parties should arbitrate the question of 

15 Antonin Scalia & Bryan Garner, Reading Law: The 

Interpretation of Legal Texts 170 (2012).

16 Id. at 170–71; see also Frank H. Easterbrook, The Absence 

of Method in Statutory Interpretation, 84 CHI. L. REV. 81, 83 

(2017) (noting that “every canon implicitly begins or ends 

with the statement ‘unless the context indicates otherwise’”).

17 Zirpoli also points out that § 4 allows a “party aggrieved by 

the alleged failure . . . of another to arbitrate . . . [to] petition” 

the court to compel arbitration. Appellee Br. at 27. Zirpoli 

argues that “party” cannot be referencing a litigant as how 

could a “party” be a litigant before he has petitioned the court 

in the first place. Id. at 27. This argument falls short as it is 

not unheard of to refer to “litigants” as “parties” before a case 

is filed. See, e.g., Fed. R. Civ. P. 4(a)(1)(A). 

18 Appellee Br. at 29 n.14. For example, after a party moves the 

court to compel arbitration, “[t]he court shall hear the parties[]

and . . . shall make an order directing the parties to proceed to 

arbitration.” 9 U.S.C. §4 (emphasis added). Typically, we 

speak of courts hearing and ordering litigants, not parties to 

contracts. 

19 Mabe v. OptumRX, -- F.4th

--, No. 21-2192, 2022 WL 

3094577, at *9 (3d Cir. 2022) (citing Henry Schein, Inc. v. 

Archer & White Sales, Inc., 139 S. Ct. 524, 527 (2019)).
9

whether the parties agreed to arbitrate the dispute. Here, the 

District Court found that it must answer that question. Midland 

argues that the arbitrator should have decided this question.

Although Congress has “expressed a strong federal 

policy in favor of resolving disputes through arbitration,”20 it 

does not follow that Congress intended parties to arbitrate 

disputes even in the absence of any agreement to arbitrate; 

arbitration remains a creature of contract.21 The policy favoring 

arbitration is not intended to force arbitration where the parties 

to a contract did not agree to it.22 Rather, it is merely intended 

to ensure that courts honor and enforce contractual 

undertakings to entrust agreed upon questions to arbitrators 

rather than to courts.23 By expressly “plac[ing] arbitration 

agreements on equal footing with all other contracts,” the 

Federal Arbitration Act merely “requir[es] courts to ‘enforce 

such agreements according to their terms.’”24 A court can 

compel a party to arbitrate only if the party agreed to 

arbitration. A party agrees to arbitrate if (1) “there is a valid 

agreement to arbitrate between the parties and, if so, (2) . . . the 

merits-based dispute in question falls within the scope of that 

valid agreement.”25

However, these seemingly clear waters can become 

very murky when parties agree to delegate questions of 

arbitrability to arbitrators and a dispute thereafter arises about 

the legality or enforceability of the contract. Resolving such 

20 Flintkote Co. v. Aviva PLC, 769 F.3d 215, 219 (3d Cir. 

2014) (quoting Century Indem. Co. v. Certain Underwriters 

at Lloyd’s, London, 584 F.3d 513, 522 (3d Cir. 2009)). 

21 Id. at 220 (quoting Bel-Rey Co., Inc. v. Chemrite (Pty) Ltd.

181 F.3d 435, 444 (3d Cir. 1999)). 

22 See MZM, 974 F.3d at 401.

23 See id. at 397.

24 Singh v. Uber Techs. Inc., 939 F.3d 210, 214–15 (3d Cir. 

2019) (alteration omitted) (quoting MacDonald v. CashCall, 

Inc., 883 F.3d 220, 226 (3d Cir. 2018)). See 9 U.S.C. §§ 2, 4. 

25 Flintkote, 769 F.3d at 220 (quoting Century Indem. Co., 

584 F.3d at 527). 
10

questions of arbitrability involves an analysis that is nearly 

identical to the two aforementioned steps.

The first step now targets the delegation clause: Is there 

a valid agreement to delegate questions of arbitrability between 

the parties? The Dissent would end the inquiry here, 

concluding that one does not.

26 But it would do so by 

answering the very question needed to determine the merits: 

whether the assignment from OneMain to Midland was valid.27

If we were to answer that question at this point of the analysis, 

we risk pushing up against Supreme Court precedent that 

prohibits us from “deny[ing] effect to an arbitration provision 

in a contract that the court [may] later finds to be perfectly 

enforceable.”28

Zirpoli does not dispute that he signed an agreement in 

which he agreed to arbitrate claims not only with OneMain but 

also with OneMain’s “past, present or future respective . . . 

assignees.”29 Midland is an assignee. Perhaps the assignment 

will later be invalidated as there is indeed a question as to the 

validity of the assignment, but not as to whether the agreement 

itself is valid. Accordingly, there exists here a valid agreement. 

One that Zirpoli signed, binding him to arbitrate claims with 

OneMain and its future assignee—Midland.

Applying the Dissent’s reasoning would also render the 

threshold question of arbitrability meaningless. If we were to 

apply the Dissent’s reasoning and decide whether the 

assignment was valid in performing the first step of the inquiry, 

we would also be reaching the merits of the motion. In 

answering the merits, the Dissent happens to find the 

assignment invalid: “A valid assignment required one of two 

things. Either Midland needed a Pennsylvania license to hold 

this type of loan. Or the companies needed the Pennsylvania 

Secretary of Banking’s blessing. [Midland] had neither.”

30

This conclusion conveniently hides the fact that prematurely 

26 Dissent at 1.

27 Id. at 2.

28 Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 

448–49 (2006)

29 JA 82. 

30 Dissent at 2.
11

answering this question makes asking the “who decides” 

question pointless. Either we decide the assignment is invalid 

and deny the motion. Or we decide the assignment is valid and 

send the arbitrability question of whether the assignment is 

valid to an arbitrator to decide—even though we already

decided it. This would be nothing more than performative, not 

to mention antithetical to the FAA’s purpose of unwanted 

judicial interference. 

Moreover, even if we were to reach the merits here, this 

issue would still need to be sent to an arbitrator because the 

assignment was valid. The Dissent is correct that, under the 

CDCA, a valid assignment would require either “a 

Pennsylvania license to hold this type of loan” or “the 

Pennsylvania Secretary of Banking’s blessing.”31 But this 

assignment falls outside of the CDCA’s purview as it is a 

charged-off loan—i.e., no longer performing as a loan.

Midland’s purchase of a charged-off loan does not constitute 

extending loans or negotiating credit as the CDCA would 

prohibit. Both the language of the CDCA32 and an amicus 

curiae letter filed by the Pennsylvania Secretary of Banking in 

a case recently before this court bolster this conclusion.33

Accordingly, for all the reasons described above, we find that 

the first inquiry is satisfied as a valid agreement to delegate 

questions of arbitrability between the parties exists. 

The analysis is also slightly different at the second step 

of the inquiry. There, the parties’ intent to delegate arbitrability 

questions must be “clear and unmistakable.”34 Just as an 

arbitration agreement is “‘severable’ and independently 

enforceable from the rest of the contract in which it is 

31 Id.

32 7 PA. STAT. AND CONS. STAT. ANN. §§ 6201–6219 (West 

2022) (“[N]o person shall engage or continue to engage . . . in 

the business of negotiating or making loans or advances or 

money on credit . . . .” (emphasis added)). 

33 Amicus Curiae Letter, Lutz v. Portfolio Recovery Assoc., 

No. 21-1656 (3d Cir. Feb. 15, 2022) (similarly concluding 

that the purchase of a charged off credit card loan did not 

require a CDCA license). 

34 Henry Schein, 139 S. Ct. at 531.
12

contained,”35 a clause delegating a question to an arbitrator 

may also be severable from the arbitration agreement.

36

 

Under this doctrine of severability, when an arbitration 

agreement contains a delegation clause, a challenge to 

arbitrability must be “directed at the delegation [clause] 

specifically to invoke a court’s power to intervene.”37

However, that is not true if a party challenges the very 

formation of the arbitration agreement.

38 Courts have the 

authority to adjudicate formation challenges—even if there is 

a delegation clause—unless the parties have clearly and 

unmistakably referred formation issues to arbitration in a 

written contract whose formation is not in issue.

39 We have 

distinguished formation challenges in this context from 

validity or enforceability challenges; the latter must go to the 

arbitrator unless directed specifically at the delegation clause.

40

A validity or enforceability challenge is “either on a ground 

that directly affects the entire agreement (e.g., the agreement 

was fraudulently induced) or on the ground that the illegality 

of one of the contract’s provisions renders the whole contract 

invalid.”41

Zirpoli cites MZM Construction Co. v. New Jersey Bldg. 

Funds to claim that its challenge of the assignment constitutes 

a challenge to the arbitration agreement’s formation (i.e., no 

contract between Zirpoli and Midland was ever made).

42 But 

Zirpoli does not dispute that he entered into a valid arbitration 

agreement with OneMain. Nor does he dispute that OneMain 

assigned that agreement to Midland. His challenge to 

Midland’s motion to compel arbitration instead targets the 

validity of the assignment from OneMain to Midland under the 

35 MZM, 974 F.3d at 397 (citing Sandvik AB v. Advent Int’l 

Corp., 220 F.3d 99, 105 (3d Cir. 2000)). 

36 Id. (quoting Sandvik, 220 F.3d at 105). 

37 Id. at 399 (citing Rent-A-Center, West, Inc. v. Jackson, 561 

U.S. 63, 71 (2010)).

38 Id. at 402.

39 Id.

40 Id. at 397. 

41 Mabe, -- F.4th --, 2022 WL 3094577, at *9 (quotations 

omitted) (quoting Buckeye, 546 U.S. at 444). 

42 Appellee Br. at 41. 
13

CDCA; Midland is not a party to the arbitration agreement. 

Under the terms of that contract only an assignee can collect 

on the Loan and force arbitration. Accordingly, determining 

whether Midland is a valid assignee goes directly to whether it

can enforce arbitration as the agreement provides, not whether 

the agreement exists; it clearly does exist and Zirpoli does not 

argue to the contrary. 

As Midland explained at argument, the District Court 

reasoned that the “legality of the assignment issue” disposed of 

the question of arbitrability.

43 This reasoning is contrary to the 

Supreme Court’s instruction in Buckeye Check Cashing, Inc. v. 

Cardegna. To ensure that courts do not “deny effect to an 

arbitration provision in a contract that the court later finds to 

be perfectly enforceable,” Buckeye “permits a court to enforce 

an arbitration agreement in a contract that the arbitrator later 

finds to be void.”44 Moreover, the enforceability of the 

delegation clause is not determined by the potential invalidity 

of the arbitration agreement.

45

Midland’s status as a contractual party to the arbitration 

agreement does not go to the enforceability of the delegation 

clause, because of the severability doctrine. Accordingly, if the

parties to the Loan agreement clearly and unmistakably 

intended to delegate the issue of enforceability of the contract

(or any other issue) to an arbitrator, the challenge to the 

enforceability of the arbitration agreement must be decided by 

the arbitrator, not by a court. To conclude otherwise would 

render delegation clauses that explicitly extend to assignees 

meaningless; a party trying to avoid arbitrating the question of 

arbitrability could simply call into question the validity of the 

assignment. As explained above, this could deny effect to a 

delegation clause in a contract that the court later finds to be 

perfectly enforceable. This type of judicial interference is 

exactly what Congress sought to prevent in enacting the FAA. 

We are thus compelled to interpret a challenge to an 

assignment as one of contract enforceability, not formation. As 

the Supreme Court explained in Buckeye, “a challenge to the 

validity of the contract as a whole, and not specifically to the 

43 Transcript of Oral Argument at 15. 

44 Buckeye, 546 U.S. at 448–49.

45 See id. at 448. 
14

arbitration clause, must go to the arbitrator.”

46 We realize that 

this rule may seem counterintuitive as it means that a court 

must defer to an arbitrator even where the agreement 

containing the arbitration clause is, itself, void or illegal. 

However, the Supreme Court has clearly rejected that 

argument, reasoning that the ultimate illegality of a contract 

does not automatically negate the parties’ agreement that an 

arbitrator should resolve disputes arising from the contract.47

Accordingly, we must only determine if the parties to 

the Loan clearly and unmistakably expressed an agreement to 

arbitrate the issue of arbitrability. A plain reading of the text of 

the arbitration agreement shows that they did. The arbitration 

agreement provides that “any Claim . . . shall be resolved by 

binding arbitration.”48 Among other things, a claim “includes, 

without limitation, anything related to . . . the arbitrability of 

any Claim pursuant to th[e] Agreement, including but not 

limited to the scope of this Agreement and any defenses to 

enforcement of the Note or this Agreement.”49 A claim also 

includes “anything related to . . . any alleged violation [of a 

state statute], including without limitation . . . usury . . . laws.” 

Read together, the arbitration agreement provides that an 

arbitrator shall resolve the arbitrability of defenses to 

enforcement, including alleged violations of state usury laws. 

III.

For the foregoing reasons, we will vacate the order of 

the District Court and remand with instructions that the Court 

grant the motion to stay and refer the matter to arbitration.

46 Id. at 449. 

47 Id. at 447–49. 

48 JA 82. 

49 Id. (emphasis added). 
BIBAS, Circuit Judge, concurring in part and dissenting in

part.

I agree with my colleagues’ reasoning in Part II.A that the

District Court had jurisdiction under §4 of the Federal Arbitration Act. But because Midland had no valid agreement to arbitrate with Zirpoli, I would affirm.

As my colleagues recognize, a court has jurisdiction under

§4 to resolve an arbitration motion made by a party to a

lawsuit. Maj. Op. 8. But in deciding the merits of that motion,

the analysis differs. To decide whether a contractual party

must arbitrate, we “first consider ... whether there is a valid

agreement to arbitrate between the parties.” Flintkote Co. v.

Aviva PLC, 769 F.3d 215, 220 (3d Cir. 2014) (internal quotation marks omitted). Flintkote does not ask whether there was

an arbitration agreement with just anyone. It asks whether there

was an agreement between the party seeking to compel arbitration and the party opposing it. Id. at 217, 222 (holding that even

though others had agreed to arbitrate, the party against whom

arbitration was sought had not). After all, “[i]f a party has not

agreed to arbitrate, the courts have no authority to mandate that

he do so.” Id. at 220 (internal quotation marks omitted).

My colleagues quote Flintkote but miss its meaning. Maj.

Op. 9. They say only that “the very formation of the arbitration

agreement” between Zirpoli and OneMain was never “in issue”

and stop there. Maj. Op. 12 (emphasis omitted). So they dismiss Zirpoli’s challenge as a dispute about enforceability and

say the agreement entrusts such disputes to the arbitrator. Id.

But Zirpoli never disputed the enforceability of his agreement

with OneMain. Rather, he insists that he never had an
2

agreement with Midland. And it is Midland, not OneMain, that

seeks to compel arbitration here.

Zirpoli is right. He never signed an arbitration agreement

with Midland. And while Midland claims that it is the assignee

of Zirpoli’s agreement with OneMain, that assignment was invalid. A valid assignment required one of two things. Either

Midland needed a Pennsylvania license to hold this type of

loan. See 7 Pa. Stat. & Cons. Stat. Ann. §§6203.A, 6208; 41

Pa. Stat. & Cons. Stat. Ann. §201(a). Or the companies needed

the Pennsylvania Secretary of Banking’s blessing. 7 Pa. Stat.

& Cons. Stat. Ann. §6214.I. They had neither. Only OneMain

had the necessary license. And the Secretary never approved

the assignment. So OneMain’s assignment to Midland was invalid. Thus, Midland has no arbitration agreement with Zirpoli

and no contractual right to force him out of court.

Today’s holding confuses how we analyze the formation of

arbitration agreements. Courts cannot start by asking, “Was an

agreement formed?” Rather, they must ask, “Was an agreement formed between these parties?” Because the majority

does not, I respectfully dissent in part.