680 F. App'x 394
6th Cir.2017Background
- Plaintiffs Danley and McIntyre opened credit-card accounts years earlier, the accounts were charged off, and defendants later purchased those charged-off debts and sought to collect post–charge-off interest.
- Plaintiffs sued in 2015, alleging defendants’ collection of post–charge-off interest violated the Fair Debt Collection Practices Act and the Michigan Collection Practices Act; defendants moved to compel arbitration under account arbitration clauses.
- The account agreements included delegation provisions (delegating “gateway” questions about arbitrability and enforceability to an arbitrator) and stated they survive assignment.
- Plaintiffs contested (1) defendants’ use of exemplar agreements and account records to prove the arbitration agreements’ existence and (2) that purchase agreements transferred only the rights to debts, not the underlying contract documents containing arbitration clauses.
- The district court compelled arbitration, finding exemplars and business records adequate to show the agreements and treating plaintiffs’ enforceability challenges as delegated to the arbitrator because plaintiffs failed to specifically challenge the delegation clauses.
- The district court also allowed sealing of several exhibits filed under a stipulated protective order; plaintiffs moved to unseal and the district court denied in part, but the Sixth Circuit vacated that sealing ruling for lack of specific findings and remanded on the sealing issue while affirming arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether exemplar account agreements and business records sufficed to show a valid arbitration agreement | McIntyre: exemplars may not be his original agreement; defendants must prove the original agreement | Defendants: exemplars plus account and assignment records establish the arbitration agreement | Court: Affirmed — plaintiffs failed to show a genuine dispute of material fact; exemplars and records were sufficient |
| Whether defendants obtained the arbitration clauses when they purchased charged-off debts | Plaintiffs: purchase agreements conveyed only rights to debts, not contract documents/arbitration clauses | Defendants: purchase agreements and assignment records effectuate transfer/enable enforcement | Court: Delegated to arbitrator under valid delegation clauses because plaintiffs did not specifically challenge delegation provision |
| Whether delegation provisions are enforceable and who decides challenges to arbitrability/enforceability | Plaintiffs: broadly attacked enforceability/assignment of arbitration clauses but did not specifically attack delegation clauses | Defendants: delegation clauses clearly and unmistakably delegate threshold arbitrability questions to arbitrator | Court: Affirmed — under Rent‑A‑Center, delegation provisions valid and unenforceability challenges as to the contract are for the arbitrator absent a specific challenge to the delegation clause |
| Whether the district court properly sealed exhibits without detailed findings | Plaintiffs: district court failed to provide required specific, on-the-record findings justifying secrecy | Defendants: filings were under a stipulated protective order; sealing was allowable | Court: Reversed in part — sealing order vacated because court did not set forth specific findings required to justify nondisclosure; remanded for further proceedings on sealing |
Key Cases Cited
- Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (delegation clauses can commit gateway arbitrability questions to arbitrators; severability of arbitration provisions)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (arbitration agreements are enforceable under FAA absent general contract defenses)
- Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287 (courts generally decide whether parties agreed to arbitrate formation disputes)
- AT&T Techs., Inc. v. Comm’ns Workers of Am., 475 U.S. 643 (principles on arbitrability and allocation of gateway issues)
- Great Earth Cos., Inc. v. Simons, 288 F.3d 878 (6th Cir.) (movant to compel arbitration must show existence of agreement; opponent must show genuine dispute of material fact)
- Shane Grp., Inc. v. Blue Cross Blue Shield of Mich., 825 F.3d 299 (6th Cir.) (district courts must make specific findings when ordering sealing of court records)
- Rudd Equip. Co., Inc. v. John Deere Constr. & Forestry Co., 834 F.3d 589 (6th Cir.) (review standards and openness presumption for sealing)
- United States v. DeJournett, 817 F.3d 479 (6th Cir.) (procedural requirements for sealing and related standards)
- Brown & Williamson Tobacco Corp. v. F.T.C., 710 F.2d 1165 (6th Cir.) (articulating need for specific findings to justify sealing)