Amrish Rajagopalan v. Noteworld, Llc

This appeal presents the question, inter alia, of whether an entity may compel arbitration on the basis of an arbitration clause in a contract to which it was not a party. Under the circumstances presented by this case, we conclude it may not, and we affirm the order of the district court denying the motion to compel arbitration.

I

Amrish Rajagopalan accumulated approximately $15,000 in debt while in school to become an electrical engineer. After losing his job, he had difficulty repaying his debts and decided to seek professional assistance. He found First Rate Debt Solutions (“First Rate”) on the Internet, and decided to sign up for their debt settlement program after being told that they had skilled lawyers and negotiators that would settle his debts for pennies on the dollar. Over the course of two or three phone calls with a First Rate agent, Raja-gopalan claims he signed up for a one-year program with the understanding that the fees would not exceed $2,000. During one phone call with the agent, Rajagopalan received a link via e-mail to First Rate’s contract; Rajagopalan scrolled through while the agent explained the contract in approximately two minutes, and then…