Giovanni Lepore v. SelectQuote Insurance Services Inc ( 2023 )


Menu:
  •                                                                   NOT PRECEDENTIAL
    UNITED STATES COURT OF APPEALS
    FOR THE THIRD CIRCUIT
    _____________
    No. 22-3390
    _____________
    GIOVANNI LEPORE
    v.
    SELECTQUOTE INSURANCE SERVICES, INC.; SELECTQUOTE AUTO & HOME
    INSURANCE SERVICES, LLC; SELECTQUOTE, INC.
    Appellants
    ________________
    On Appeal from the United States District Court
    for the District of New Jersey
    (D.C. Civil No. 2:22-cv-01753)
    District Judge: Honorable Claire C. Cecchi
    ______________
    Submitted Under Third Circuit L.A.R. 34.1(a)
    November 14, 2023
    ______________
    Before: CHAGARES, Chief Judge, MATEY and FUENTES, Circuit Judges
    (Opinion filed: December 7, 2023)
    ____________
    OPINION *
    ____________
    *
    This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does not
    constitute binding precedent.
    CHAGARES, Chief Judge.
    Plaintiff Giovanni Lepore alleges that defendants SelectQuote Insurance Services,
    Inc., SelectQuote Auto & Home Insurance Services, LLC, and SelectQuote, Inc.
    (collectively, “SelectQuote”) violated the New Jersey Law Against Discrimination by
    terminating his employment after he underwent heart surgery. SelectQuote moved to
    compel arbitration and to stay or dismiss the action based upon a document that was
    neither explicitly mentioned in the Complaint nor attached to it as an exhibit. Relying
    upon our decision in Guidotti v. Legal Helpers Debt Resolution, L.L.C., 
    716 F.3d 764
     (3d
    Cir. 2013), the District Court denied the motion and ordered the parties to conduct
    discovery on the arbitrability of Lepore’s claims. SelectQuote appealed, arguing that the
    District Court’s application of Guidotti was incorrect. We will affirm.
    I.
    We write solely for the parties and so recite only the facts necessary to our
    disposition. 1 Lepore commenced his employment with SelectQuote on September 7,
    2021. Shortly thereafter, on September 24, he began experiencing chest pains. He was
    taken to the emergency room and admitted to the hospital. Doctors performed triple-
    bypass surgery and replaced a valve in Lepore’s heart, then discharged him on October 3.
    Lepore informed his supervisor that he was being admitted to the hospital when he
    was admitted on September 24, and he was told by the supervisor to contact a different
    individual affiliated with SelectQuote, who then failed to respond to Lepore’s inquiries.
    1
    We draw these facts, which the parties do not dispute, from the Complaint.
    2
    On September 30, Lepore once again e-mailed his supervisor to inquire about disability
    accommodations. SelectQuote instead terminated his employment on that date. But it
    did not inform him of his termination immediately. Rather, on October 10, SelectQuote
    contacted him to ask that he return his equipment. Not until the next day, when he
    inquired as to why SelectQuote wanted its equipment back, was he finally informed that
    he had been terminated because his inconveniently scheduled heart surgery had brought
    him out of compliance with SelectQuote’s attendance policy during training for new
    employees.
    On February 18, 2022, Lepore filed suit against SelectQuote in New Jersey state
    court, asserting claims of discrimination, retaliation, and failure to accommodate, each in
    violation of the New Jersey Law Against Discrimination, 
    N.J. Stat. Ann. § 10:5-1
     et seq.
    While his Complaint did allege that his employment began on September 7, 2021, it did
    not mention or refer to the legal basis of that employment relationship, nor was any legal
    documentation memorializing or creating that relationship attached to the Complaint as
    an exhibit. SelectQuote first removed the case to federal court, then moved to compel
    arbitration of Lepore’s claims and stay or dismiss the suit. In support of its motion,
    SelectQuote filed a copy of Lepore’s purported employment agreement (the
    “Agreement”), which, it argues, contains a clause requiring the claims asserted in this suit
    to be arbitrated. The District Court first considered whether to decide the motion in the
    absence of discovery, using the standard of review applicable under Federal Rule of Civil
    Procedure 12(b)(6), or after discovery, using the standard applicable under Rule 56.
    Because the Agreement was neither referred to in the Complaint nor attached to the
    3
    Complaint as an exhibit, the District Court concluded that Guidotti required the
    application of the Rule 56 standard. It therefore denied the motion without prejudice and
    ordered the parties to conduct limited discovery on the arbitrability of Lepore’s claims.
    SelectQuote timely appealed.
    II. 2
    In Guidotti, we explained the circumstances in which a district court must employ
    either the Rule 12(b)(6) standard or the Rule 56 standard to decide a motion to compel
    arbitration. “[W]hen it is apparent, based on the face of a complaint, and documents
    relied upon in the complaint, that certain of a party’s claims are subject to an enforceable
    arbitration clause, a motion to compel arbitration should be considered under a Rule
    12(b)(6) standard without discovery’s delay.” Guidotti, 
    716 F.3d at 776
     (quotation marks
    omitted). But if, instead, “the complaint and its supporting documents are unclear
    regarding the agreement to arbitrate . . . then the parties should be entitled to discovery on
    the question of arbitrability before a court entertains further briefing on the question,”
    after which “the court may entertain a renewed motion to compel arbitration, this time
    judging the motion under a summary judgment standard.” 
    Id.
     (quotation marks and
    brackets omitted). The Complaint itself does not even mention the Agreement, much less
    allege the existence, validity, or scope of the arbitration clause contained within the
    2
    The District Court had jurisdiction under 
    28 U.S.C. § 1332
    , and we have jurisdiction
    under 
    9 U.S.C. § 16
    (a)(1) over appeals from a district court order denying a motion to
    compel arbitration, whether with or without prejudice. See Quilloin v. Tenet
    HealthSystem Phila., Inc., 
    673 F.3d 221
    , 227 (3d Cir. 2012). We exercise plenary review
    in such appeals, including as to the question of what standard the district court should
    have employed in deciding the motion. Guidotti, 
    716 F.3d at 772
    .
    4
    Agreement. It is thus plainly not “apparent, based on the face of [the] complaint, . . . that
    certain of [Lepore]’s claims are subject to an enforceable arbitration clause.” 
    Id.
    (quotation marks omitted).
    SelectQuote, however, argues that the arbitrability of Lepore’s claims is facially
    apparent from the Agreement. Assuming, arguendo, that SelectQuote is correct, the
    appropriate standard for the District Court to have employed would turn on whether the
    Agreement is a “document[] relied upon in the complaint,” 
    id.,
     such that it might be
    considered along with the Complaint, or whether instead the Agreement is not relied
    upon in the Complaint, such that the District Court could not consider it to decide the
    motion without first ordering limited discovery on arbitrability.
    The District Court was correct to limit its review to the Complaint alone. We
    therefore conclude that it correctly declined to decide the motion under the Rule 12(b)(6)
    standard. While “[a]s a general matter, a district court ruling on a motion to dismiss may
    not consider matters extraneous to the pleadings,” In re Burlington Coat Factory Sec.
    Litig., 
    114 F.3d 1410
    , 1426 (3d Cir. 1997), “a court may consider an undisputedly
    authentic document that a defendant attaches as an exhibit to a motion to dismiss if the
    plaintiff’s claims are based on the document,” Pension Benefit Guar. Corp. v. White
    Consol. Indus., Inc., 
    998 F.2d 1192
    , 1196 (3d Cir. 1993). Thus, the District Court could
    have considered the Agreement under the Rule 12(b)(6) standard only if Lepore’s claims
    were “based on” the Agreement. A claim is “based on” a document, in turn, when it is
    “integral to or explicitly relied upon in the complaint.” In re Burlington, 
    114 F.3d at
                                                 5
    1426 (quoting Shaw v. Digital Equip. Corp., 
    82 F.3d 1194
    , 1120 (1st Cir. 1996)).
    SelectQuote has not shown that the Agreement meets either prong of this test. The
    Complaint does not explicitly mention or cite the Agreement, which therefore is not
    “explicitly relied upon” in the Complaint. Nor is it “integral to” the Complaint or to the
    claims asserted therein. Our caselaw has not articulated an explicit test to govern when a
    document is integral to a complaint despite being first entered onto the record in response
    to the complaint. But we have permitted courts to consider such a document if the claims
    asserted in the complaint depend on its contents, such as when those contents establish
    the right that the plaintiff claims was infringed or when they constitute the unlawful
    conduct for which the plaintiff seeks to recover. 3 Although in general allowing a court to
    review documents extraneous to the complaint might unfairly blindside a plaintiff, such
    risks are ameliorated when a document is necessary to articulate the claims asserted in the
    complaint, because a plaintiff must have reviewed such documents in drafting the
    3
    Examples include Tanksley v. Daniels, 
    902 F.3d 165
    , 172 (3d Cir. 2018) (permitting
    consideration of copyrighted work and allegedly infringing work in copyright
    infringement action); Oliver v. Roquet, 
    858 F.3d 180
    , 190 & n.7 (3d Cir. 2017)
    (permitting consideration of report that allegedly contained unlawful recommendation);
    Freeman v. Redstone, 
    753 F.3d 416
    , 423 (3d Cir. 2014) (permitting consideration of
    corporation’s compensation plan and shareholder voting rules where complaint alleged
    (1) that the corporation had violated the compensation plan and (2) that those voting rules
    were unlawful); Rossman v. Fleet Bank (R.I.) National Association, 
    280 F.3d 384
    , 388
    n.4 (3d Cir. 2002) (permitting consideration of allegedly unlawful credit card solicitations
    and agreements); and In re Donald J. Trump Casino Securities Litigation-Taj Mahal
    Litigation, 
    7 F.3d 357
    , 368 n.9 (3d Cir. 1993) (“Because the complaint directly
    challenged the prospectus, the district court properly considered the prospectus in
    deciding whether to grant the Rule 12(b)(6) motion.”).
    6
    complaint. See In re Burlington, 
    114 F.3d at 1426
    .
    An employment agreement could be integral in this way to claims for
    discrimination, retaliation, or failure to accommodate in certain circumstances — for
    example, if the plaintiff alleged that the terms or conditions of his or her employment
    themselves, as set forth in the agreement, were discriminatory, retaliatory, or
    insufficiently accommodating. But the gravamen of Lepore’s claims is that SelectQuote
    terminated his employment in violation of New Jersey disability law. Consulting the
    terms of the Agreement would not be necessary for Lepore to articulate such claims in
    the Complaint. And because the contents of the Agreement are inessential to the
    articulation of Lepore’s claims, the Agreement is not “integral to” the Complaint. The
    District Court correctly excluded the Agreement from the scope of its review in deciding
    which standard to employ in deciding SelectQuote’s motion.
    SelectQuote does not rebut this argument by attempting to show how our
    governing precedents require the Agreement to be considered under the Rule 12(b)(6)
    standard. Rather, it argues chiefly that as a matter of policy there is little to be gained by
    requiring discovery unless the plaintiff opposes the motion to compel arbitration by
    placing the authenticity or validity of the arbitration agreement in dispute. While such
    arguments might be convincing had the parties’ disagreement reached us as a question of
    first impression, it did not. We are bound by Guidotti no less than the District Court was,
    and by its plain terms Guidotti requires discovery unless the arbitrability of the claims
    under suit is apparent from “the complaint and its supporting documents,” regardless of
    whether the plaintiff has additionally placed the agreement to arbitrate in issue. 
    716 F.3d
                                                7
    at 776. SelectQuote has not convinced us that the Agreement is among the “supporting
    documents” that the District Court could consider prior to ordering discovery as to
    arbitrability, and our conclusion is not disturbed by the possible policy advantages that
    might be secured by requiring the District Court to consider the Agreement prior to
    ordering limited discovery into arbitrability.
    III.
    For the foregoing reasons, we will affirm the Order of the District Court.4
    4
    Judge Matey would remand for the District Court to decide in the first instance whether
    the Agreement is integral to the claims raised in the Complaint.
    8
    

Document Info

Docket Number: 22-3390

Filed Date: 12/7/2023

Precedential Status: Non-Precedential

Modified Date: 12/7/2023