Christopher Stowe, Herb Meyerowitz, Jim Fallow, Jay Little, Maverick Watson, and Heidi Fenton v. Hearst Magazine Media, Inc., d/b/a Bicycling

Summary

The United States District Court for the District of Delaware denied Hearst Magazine Media, Inc.’s motion to compel arbitration in a putative class action alleging violations of federal and state video privacy and wiretap laws. The court held that the existence of an arbitration agreement was not apparent from the complaint and ordered limited discovery on whether the parties formed an agreement to arbitrate, with further review under a summary-judgment standard.

Holdings

1. The Complaint did not establish on its face that Plaintiffs agreed to be bound by Terms of Use containing an arbitration provision.
2. Because Plaintiffs sufficiently placed the existence of an arbitration agreement in issue and no discovery had occurred, the court was required to permit limited discovery on arbitrability before deciding whether arbitration was warranted.
3. After limited discovery, the court will assess whether arbitration is warranted under the Rule 56 summary-judgment standard; any genuine dispute over whether the parties had a meeting of the minds to arbitrate will be submitted to trial, before a jury if demanded.

Questions Presented

1. Whether the Complaint and documents relied upon in it established on their face that Plaintiffs agreed to an arbitration provision.
2. Whether Defendant's motion to compel arbitration should be decided under a Rule 12(b)(6) standard or after limited discovery under a Rule 56 summary-judgment standard.
3. Whether the motion to compel arbitration should be denied pending factual development concerning whether the parties had a meeting of the minds on arbitration.

Disposition

other