The key litigated issue in Guidotti v. Legal Helpers Debt Resolution was whether the district court used the appropriate standard when it denied the defendants' motion to compel arbitration without any discovery on the issue.

The plaintiff, Dawn Guidotti, filed a putative class action lawsuit against 22 parties, alleging fraud and conspiracy. Guidotti claimed that she was deceived by defendants because they led her to believe that they would help to settle her consumer debt. To enroll in the debt resolution program, Guidotti received by e-mail several documents that she signed and returned. Guidotti also received an account agreement for a special bank account into which she made monthly payments that were to be used to settle her debts and pay service fees. When none of her debts were settled 15 months after entering into the program, Guidotti sued.

The district court considered arbitration provisions in many agreements signed by Guidotti. At issue on appeal is whether the account agreement, which included an arbitration provision, was included in the original package Guidotti received. If, as she alleges, it was not, Guidotti can argue that she is not bound by that arbitration provision. Without permitting discovery on the issue, the district court concluded that the record was sufficient to establish that Guidotti did not receive the account agreement with the initial set of documents and therefore denied the defendants' motion to compel arbitration.

In its May 28, 2013 opinion, the US Court of Appeals for the Third Circuit reversed the district court's decision because the district court did not permit discovery on whether Guidotti received the account agreement with the initial set of documents or later. In its decision, the Third Circuit acknowledged that its precedents were not entirely clear on the standard district courts should use to determine whether the parties agreed to arbitrate.

The Third Circuit stated that the standard for determining whether parties agreed to arbitrate depends on the allegations in the complaint and the documents relied on in the complaint. Specifically, the Third Circuit clarified that an agreement to arbitrate should be judged under the:

Since it was unclear from the face of the complaint and its supporting documents whether Guidotti agreed to arbitration, the Third Circuit remanded the case to the district court to allow limited discovery on the issue.

To avoid a dispute about whether a plaintiff agreed to arbitrate, an agreement to arbitrate should be: