IQ Products Company v. WD-40 Company

The federal courts of appeals have held that when a contract incorporates certain common rules of private arbitration organizations, the parties have evinced a “clear and unmistakable” intent that arbitrators should decide the “gateway” issue of whether a particular dispute is covered by the agreement to arbitrate. In some circumstances, however, the dispute at issue has nothing to do with the contract containing the arbitration clause. To avoid compelling arbitration of every dispute — no matter how far removed from the subject matter of such a contract — four circuit courts have adopted some version of the “wholly groundless” test, while two other circuits have rejected it. The question presented is: Whether a court must grant a motion to compel arbitration of the gateway question of arbitrability, even where a contract containing an arbitration clause is unrelated to the parties’ instant dispute, or whether the court should deny the motion where the arbitrability argument is “wholly groundless”?