United States Court of Appeals

For the Eighth Circuit

___________________________

No. 17-1931

___________________________

Jessica Parm, on behalf of herself and all others similarly situated

lllllllllllllllllllllPlaintiff - Appellee

v.

Bluestem Brands, Inc.

lllllllllllllllllllllDefendant - Appellant

___________________________

No. 17-1932

___________________________

Sara Arce; Anne Bowers; Nena Osorio, on behalf of themselves and all others

similarly situated

lllllllllllllllllllllPlaintiffs - Appellees

v.

Bluestem Brands, Inc.

lllllllllllllllllllllDefendant - Appellant

____________

Appeals from United States District Court 

for the District of Minnesota - Minneapolis

____________
Submitted: May 17, 2018

Filed: August 7, 2018

____________

Before SHEPHERD, KELLY, and GRASZ, Circuit Judges.

____________

SHEPHERD, Circuit Judge.

Jessica Parm, Sarah Arce, Anne Bowers, and Nena Osorio represent a class of

people who purchased goods from Bluestem Brands, Inc. (“Bluestem”) and were

extended a line of credit in order to make those purchases. As part of the financing

application, each plaintiff agreed to arbitrate any dispute “arising from or relating to

the credit offered or provided to” them. After discovering that Bluestem allegedly

engaged in unscrupulous business practices, the plaintiffs brought these class action

suits against Bluestem, asserting a number of claims under federal and state laws. 

The cases were consolidated, and Bluestemmoved to compel arbitration. The district

court granted the motion in part and denied it in part. Bluestem appeals, arguing that

all of the plaintiffs’ claims fall within the scope of the arbitration clauses. We agree

and therefore reverse the district court and order arbitration of all plaintiffs’ claims.

I.

Bluestem sells consumer goods via traditional mail and telephone orders or

online using two websites, Fingerhut and Gettington. Despite a remarkably similar

appearance between the websites, they differ in two significant ways: First, the price

of an item offered on Fingerhut is generally higher than the price of that same item

on Gettington. Second, the primary price for an item on the Fingerhut website is

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displayed in terms of a monthly payment, whereas the price displayed on the

Gettington website is a single, lump-sum amount.

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Bluestempartners with independent financialinstitutions to provide credit lines

to consumers for purchases made from Fingerhut. That partner was MetaBank prior

to July 2012 and WebBank thereafter. These financing options were displayed on the

Fingerhut website and in printed advertisements, and customers were able to apply

online or over the phone. During the application process, all consumers agreed to one

of two arbitration clauses relevant to the present case. The 2010 credit

agreement—applicable to Parm, Bowers, and the class members they

represent—states as follows:

[I]f a dispute of any kind arises out of this Agreement, either you or we,

at our sole discretion, can choose to have that dispute resolved by

binding arbitration. . . . Any claim, dispute or controversy, (whether in

contract, regulatory, tort or otherwise, whether pre-existing, present or

future and including constitutional, statutory, common law, intentional

tort and equitable claims) arising from or relating to the credit offered

or provided to you; the actions of yourself, us or third parties; or the

validity of this Arbitration provision (individually and collectively, a

“Claim”), must, after an election by you or us, be resolved by binding

arbitration.

The 2013 and 2014 Agreements—applicable to Arce, Osorio, and the class members

they represent—reads:

[E]ither you or we, at our sole discretion, can choose to have any dispute

arising out of or relating to this Agreement or our relationship resolved

by binding arbitration.

. . . .

Fingerhut also lists a lump-sumprice, but it isin a lighter-colored and smaller- 1

sized font just above the monthly payment.

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For purposes of this Arbitration provision, “dispute” shall be construed

as broadly as possible, and shall include any claim, dispute or

controversy (whether in contract, regulatory, tort or otherwise, whether

preexisting, present or future and including constitutional, statutory,

common law, intentional tort and equitable claims) arising from or

relating to this Agreement, the credit offered or provided to you, or the

goods or services you purchase; the actions of yourself, us, or third

parties; or the validity of this Agreement or this Arbitration provision.

It includes disputes brought as counterclaims, cross claims, or third

party claims.

The agreements further state that the contracting party would be bound by the terms

contained therein from the time he or she first used the credit. Each of the plaintiffs

was approved for a line of credit with one of the banks and proceeded to use that

financing to purchase goods via Fingerhut.

The plaintiffs brought these actions, alleging that Bluestem engaged in a

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targeted advertising campaign, whereby it directed people with lower income and

credit scores to Fingerhut and people with higher income and credit scores to

Gettington. The plaintiffs further alleged that Bluestem imposed hidden finance

charges that exceed maximum statutory limits in a manner violative of a number of

state and federal usury, contract, truth-in-lending, and deceptive marketing laws. 

Bluestemmoved to compel arbitration under the agreementsthe plaintiffs signed, and

the district court granted this motion in part, thereby compelling arbitration of only

a subset of the claims.

Parm filed her class action complaint in the United States District Court for

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the District of Minnesota. Arce, Bowers, and Osorio filed their complaint in the

Central District of California. The two actions were later consolidated in the District

of Minnesota. As will be discussed further later in this opinion, the substance of the

two complaints is identical in all material respects. 

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As is relevant to this appeal, the court found that three groups of claims fall

outside the scope of the respective credit agreements and thus are not subject to

arbitration. First, it found that the state usury counts survive Bluestem’s motion “to

the extent . . . [they] allege that the hidden finance charges violate state law regardless

of the interest rates charged under the credit agreements.” Second, to the extent that

the plaintiffs’ state and federal counts allege that “Bluestem should have disclosed

that the prices included hidden finance charges,” the court concluded that “these

claims do not relate to the revolving credit accounts in any way.” Finally, it held that

“to the extent that Plaintiffs claim unjust enrichment solely in relation to Bluestem’s

sale of goods and pricing for those goods—as opposed to the Banks’ provision of

credit through the revolving credit accounts—these claims do not arise out of orrelate

to the credit agreements or the Plaintiffs’ relationship with the Banks.” Bluestem

appeals.

II.

Bluestem contends that the district court erred in its determination that the

plaintiffs’ state-law usury counts, state and federal financial-disclosure counts, and

state-law unjust enrichment counts were not arbitrable. We review this challenge de

novo. Cicle v. Chase Bank USA, 583 F.3d 549, 553 (8th Cir. 2009). There is no

challenge to Bluestem’s ability to enforce the agreements, nor do the appellees

contend that the agreements themselves are invalid. 

Two questions are pertinent when reviewing an order denying a motion to

compel arbitration: (1) whether the parties entered a valid arbitration agreement, and,

(2) if so, whether the parties’ particular “dispute falls within the scope of the

arbitration agreement.” Unison Co. v. Juhl Energy Dev., Inc., 789 F.3d 816, 818 (8th

Cir. 2015) (emphasis omitted). “[S]tate contract law governs the threshold question

of whether an enforceable arbitration agreement exists between litigants; if an

enforceable agreement exists, the federal substantive law of arbitrability governs

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whether the litigants’ dispute falls within the scope of the arbitration agreement.” 

Donaldson Co. v. Burroughs Diesel, Inc., 581 F.3d 726, 731 (8th Cir. 2009). Given

the appellees’ concession that there is a valid arbitration agreement, we are 3

concerned only with whether the current dispute falls within the agreements’ scope.

It is a “fundamental principle that arbitration is a matter of contract.” AT&T

Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (internal quotation marks

omitted). Accordingly, “a party cannot be required to submit to arbitration any

dispute which he has not agreed so to submit.” Howsam v. Dean Witter Reynolds,

Inc., 537 U.S. 79, 83 (2002). But where a valid arbitration agreement exists, “[w]e

must liberally construe” it, “resolving any doubts in favor of arbitration . . . unless it

may be said with positive assurance that the arbitration clause is not susceptible of

an interpretation that covers the asserted dispute.” Unison Co., 789 F.3d at 818

(second alteration in original) (internal quotation marks omitted). The specific

inquiry before us, then, is whether the arbitration clauses are susceptible to an

interpretation that covers the three subsets of claims the district court exempted from

arbitration. Cf. id.; see also AT&T Techs., Inc. v. Commc’ns Workers of Am., 475

U.S. 643, 650 (1986) (“[A]n order to arbitrate the particular grievance should not be

denied unless it may be said with positive assurance that the arbitration clause is not

susceptible of an interpretation that covers the asserted dispute. Doubts should be

resolved in favor of coverage.” (internal quotation marks omitted)). 

In resolving this issue, the first question is “whether the arbitration clause is

broad or narrow.” Unison Co., 789 F.3d at 818 (quoting Fleet Tire Serv. of N. Little

There is a live dispute over which agreement controls the various parties, but

3

no one argues about whether an agreement exists in the first place. Because of the

broad nature of the provisions contained in both agreements, we do not find it

necessary to determine which agreement controls which party. Instead, we choose

to decide the issues based on appellees’ concessions that Parm and Bowers are bound

by the 2010 Agreement and Arce and Osorio are bound by the 2013/2014 Agreement.

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Rock v. Oliver Rubber Co., 118 F.3d 619, 621 (8th Cir. 1997)). “If the clause is

broad, the liberalfederal policy favoring arbitration agreementsrequiresthat a district

court send a claim to arbitration . . . as long as the underlying factual allegations

simply touch matters covered by the arbitration provision.” Id. (second alteration in

original) (internal quotation marks omitted); see also United Steelworkers of Am. v.

Duluth Clinic, Ltd., 413 F.3d 786, 789 (8th Cir. 2005) (“[I]f the clause is broad . . .

the court analyze[s] whether the dispute relates to the subject matter of the

agreement.”). 

Bluestem asserts that the clauses in both agreements are broad, but the

appellees’ position is less clear. The appellees seem to concede that the clauses are

broad in multiple places in their brief. See Appellees’ Br. 34 (“The 2010 and 2014

credit agreements provide that disputes ‘arising from’ or ‘relating to’ the credit

agreements must be arbitrated . . . , and while these phrases ‘[are] broad,’ they ‘[are]

not all encompassing.’” (quoting Doe v. Princess Cruise Lines, Ltd., 657 F.3d 1204,

1218 (11th Cir. 2011)); Appellees’ Br. 44 (same); Appellees’ Br. 45 (“Simply

waiving around a broadly drafted arbitration agreement is not enough . . . .”). But

they nonetheless persist that “the language about claims ‘arising from or relating to

the credit offered or provided to you’ . . . serve[s] to limit the nature of claims . . . that

are subject to arbitration.” Appellees’ Br. 38. We first determine the breadth of the

arbitration clauses—that is, whether they are broad or narrow—and we then apply the

appropriate standard to determine whether the current dispute falls within the scope

of the clauses. See, e.g., Unison Co., 789 F.3d at 818.

A.

“Arbitration clauses covering claims ‘arising out of’ or ‘relating to’ an

agreement are broad.” Zetor N. Am., Inc. v. Rozeboom, 861 F.3d 807, 810 (8th Cir.

2017). Indeed, “[s]uch a provision constitutes the broadest language the parties could

reasonably use to subject their disputesto thatformofsettlement, including collateral

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disputes that relate to the agreement containing the clause.” Fleet Tire, 118 F.3d at

621. In the years since we adopted the broad/narrow approach in Fleet Tire, we have

applied its reasoning steadfastly so long asthere was not limiting language elsewhere

in the contract.

4

From this precedent, we have little trouble concluding both Agreements

contain “broad” arbitration clauses. See, e.g., Rozeboom, 861 F.3d at 810. 

Specifically, the 2010 agreement statesthat “if a dispute of any kind arises out of this

Agreement, either you or we, at our sole discretion, can choose to have that dispute

resolved by binding arbitration.” R. at 154 (emphasis added); see Leonard, 861 F.3d

at 730 (“The language ‘any dispute arising from the Activity’ is broad.”). It

continues: “Any claim, dispute or controversy . . . arising from or relating to the

credit offered or provided to you . . . must, after an election by you or us, be resolved

by binding arbitration.” R. at 154 (emphasis added); see Grizzle, 424 F.3d at 800

(finding clause broad where it covered “any claim, controversy or dispute arising out

of or relating to Franchisee’s operation of the Franchised business under the

Agreement”). The 2013/2014 agreement—which contains even broader

language—states that “either you or we, at our sole discretion, can choose to have any

dispute arising out of or relating to this Agreement or our relationship resolved by

binding arbitration,” and it further clarifies that “‘dispute’ shall be construed as

See Leonard v. Del. N. Companies Sport Serv., Inc., 861 F.3d 727, 730 (8th 4

Cir. 2017); Unison Co., 789 F.3d at 818-19; PRM Energy Sys., Inc. v. Primenergy,

LLC, 592 F.3d 830, 836 (8th Cir. 2010) (finding clause broad where it covered “‘all

disputes arising under’ the agreement”); 3M Co. v. Amtex Sec., Inc., 542 F.3d 1193,

1199 (8th Cir. 2008) (“While the clause is not as extensive as clauses which require

arbitration of ‘any’ or ‘all’ disputes, the parties’ definitions of terms . . . indicate that

they agreed to arbitrate a very broad range of disputes . . . .”); CD Partners, LLC v.

Grizzle, 424 F.3d 795, 800 (8th Cir. 2005); cf. Moses H. Cone Mem’l Hosp. v.

Mercury Constr. Corp., 460 U.S. 1, 5 (1983) (classifying as “broad” a clause which

covered “[a]ll claims, disputes and other mattersin question arising out of, or relating

to, this Contract or the breach thereof”).

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broadly as possible, and shall include any claim, dispute or controversy. . . arising

from or relating to this Agreement[] [or] the credit offered or provided to you.” R.

at 148 (emphasis added); see Unison Co., 789 F.3d at 818-19 (finding clause broad

where it covered “‘any dispute’ arising between the parties ‘under or in connection

with [the contract] or any legal relationship associated with or contemplated by [the

contract]”).

B.

In applying a broad clause, we ask whether “the underlying factual allegations

simply touch matters covered by the arbitration provision.” Unison Co., 789 F.3d at

818 (internal quotation marks omitted). To answer this question, “[o]ur task is to

look past the labels the parties attach to their claims to the underlying factual

allegations and determine whether they fall within the scope of the arbitration

clause.” Amtex, 542 F.3d at 1199. Thus, we must begin with an analysis of the

operative complaints.

Turning to a sample of the actual language used in the plaintiffs’ claims, this 5

is what the plaintiffs allege with respect to the three groups of claims at issue on

appeal:

As stated, the quotations that follow are merely a sample of the scores of 5

allegations in the complaints which rely on the same claims. Additionally, apart from

the different language the respective states use to define their own laws, there is no

meaningful difference in the factual allegations between the Parm complaint and the

Arce/Osorio complaint. Indeed, in most instances, the same language is used. 

Compare, e.g., R. at 2 (allegation from the Parm complaint stating “Items sold on

Fingerhut to low-income consumers come with substantial markups. . . . This massive

sales price markup is actually a finance charge in disguise.”), with R. at 76 (allegation

from the Arce/Osorio complaint with almost identical language). 

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Usury Allegations

1. “As set forth more fully above, Defendant’s prices are significantly marked up

to mask the hidden interest charges. When those interest charges are

considered, Defendant’s loans carry an [sic] interest at a rate greater than 16%

per annum in violation of [Georgia law].” R. at 16.

2. “Defendant charges an annual interest rate of approximately 24.90%. This

annual interest rate is driven even higher when the hidden finance charges are

accounted for. These rates of interest are far in excess of the maximum 10%

annual interest allowed under Texas usury laws, 18% allowed under Florida

usury laws, or 18% allowed under Minnesota usury laws.” R. at 84.

Unjust Enrichment Allegations

1. “By means of Defendant’s wrongful conduct alleged herein, it knowingly sold

products at massively marked-up prices that disguised finance charges, [sic]

and excessive interest.” R. at 21, 113.

2. “Under the common law doctrine of unjust enrichment, it is inequitable for

Defendant to be permitted to retain the benefits it received, and is still

receiving, fromthe imposition of hidden finance charges and excessive interest

on Plaintiff and members of the classes.” R. at 21, 113.

Truth-in-Lending/Consumer Protection Allegations

1. “Adding insult to injury, Defendant charges another round of extremely high

interest charges through the credit it arranges via its partners. Because the

sales price is already inclusive of the hidden finance charge, Fingerhut is

actually charging interest on interest, without disclosing this fact to

consumers.” R. at 9, 83.

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2. “Defendant’s wrongful conduct is likely to create a risk of confusion or

misunderstanding including, by way of example and not limitation:

Defendant’s failure to disclose the hidden finance charge.” R. at 20.

3. “As a result of the Defendant’s conduct, Plaintiff and the Hidden Finance

Charge Class members have suffered actual damagesin that they paid a higher

price to finance their purchases than was disclosed to them at the formation of

the contract.” R. at 20, 111.

4. “[California law] requires, at the time of opening the account, a creditor must

make, [sic] a statement of when the charge beginsto accrue and an explanation

of whether or not any time period exists within which any credit that has been

extended may be repaid without incurring the charge.” R. at 96 (internal

quotation marks omitted).

5. “As discussed above, Defendant charged more on Fingerhut—where

consumers financed their purchases—then [sic] on Gettington—where they

purchased them outright. This increased price was a charge assessed for the

privilege of purchasing the goods in installments. Thus, this increased price

became a finance charge.” R. at 97, 98.

6. “Additionally, Defendant disclosed they would charge an APR of 21.65% plus

the Prime Rate against the average daily balance. However, this disclosure

does not include the finance charge assessed by Defendant at the outset of the

purchase. Thus, the 21.65% + Prime Rate was inaccurate.” R. at 99.

7. “In sum, nearly all of the goods sold on Fingerhut are available on Gettington

for a significantly lower sales price. The markup on Fingerhut is actually a

hidden finance charge. By not disclosing this finance charge, Defendant

deceived consumers and violated the Truth in Lending Act [TILA] . . . .” R.

at 10, 84.

8. “Pursuant to [federal law], Defendant isliable for violating the TILA by failing

to disclose to Plaintiff and the Hidden Finance Charge Class members all

finance charges . . . .” R. at 22, 109.

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In sum, the plaintiffs’ theory is that Bluestem is assessing a “hidden finance

charge,” which is evidenced by the higher price of goods on Fingerhut’s platform as

compared to Gettington. Thus, the argument goes, because (1) Fingerhut charges, for

example, $100 more for a particular product than the same product featured on

Gettington, and because (2) Fingerhut is already charging an exorbitant amount of

interest to finance the purchase, state usury and unjust enrichment laws are being

6

violated, as are state and federal consumer protection laws. As shown by a review of

the verbatim recitations from the plaintiffs’ claims, the factual allegations

underpinning every single claim “arise[] from” or “relate[] to” the financing

agreements because, without those agreements, there could be no “hidden finance

charge[s].” Indeed, there would be no financing at all, and this case would instead

turn on whether someone paid cash for an overpriced item.

For example, according to the Arce/Osorio complaint, California law defines

a “finance charge” as “the amount however denominated or expressed which the retail

buyer contracts to pay or pays for the privilege of purchasing goods or services to be

paid for by the buyer in installments.” R. at 98. Therefore, if a consumer completed

an outright cash purchase of an iPad for $100 more than the retail value, that $100

could no longer be a hidden “finance charge” under California law because there is

no installment plan. This same analysis applies to the plaintiffs’ federal claims under

TILA because, as defined in that act, “[‘][f]inance charges’ are ‘the sum of all

charges, payable directly or indirectly by the person to whom the credit is extended

and imposed directly or indirectly by the creditor as an incident to the extension of

credit.’” R. at 109 (quoting 15 U.S.C. § 1605(a)). Here again, without an “extension

of credit,” we are left with an overpriced item purchased with cash. Further,

Significantly, Bluestem was the only party named as a defendant in the

6

complaints. Thus, the myriad of allegations concerning “Defendant’s loans” and the

interest charged by “Defendant” are confusing because these phrases would be better

directed at one of the banks providing the financing. Nonetheless, we simply deal

with the allegations as pled in the complaint.

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regarding the usury claims, every allegation starts with the 24.90% charged by the

lender and adds to that amount the alleged hidden finance charge to equal an amount

greater than that allowed by law in each of the respective states. And finally, the

unjust enrichment claims depend on “the imposition of hidden finance charges and

excessive interest.” All of these allegations therefore “touch matters covered by the

arbitration provision[s].” Unison Co., 789 F.3d at 818 (internal quotation marks

omitted). Specifically, each claim implicates “the credit offered or provided to” the

consumers because the facts underlying every claim overwhelmingly detail the

financing relationship between the consumers and Bluestem. 

Relying on the district court’s reasoning, the appellees resist this outcome by

asserting that their claims would persist even in the absence of the financing

arrangements. But how can this be when the factual allegations underlying every

single claim depend on the existence of the financing? Specifically, the appellees

argue that the district court was correct in allowing their claims to proceed to the

extent those claims involved only Bluestem’s independent decision to charge a higher

price for goods on Fingerhut. The actual allegations in their complaint, however, do

not bear this out. The simple fact is that every single one of the plaintiffs used his or

her line of credit to finance a purchase for an item from Fingerhut: one which they

now claim is overpriced to mask a hidden finance charge built into the original

financing each plaintiff secured from one of the banks. The actual

allegations—regardless of how the plaintiffs now attempt to characterize

them—therefore directly involve “the credit offered or provided to” the plaintiffs.

The appellees push on, insisting that Bluestem’s interpretation would require

arbitration of disputes concerning, for example, a car accident between a consumer

and her neighbor or the third-party courier who delivers the packages, or a personal

injury claim against Samsung where a consumer purchased an exploding cell phone

from Fingerhut. The district court, too, engaged in this hypothetical exercise,

positing that Bluestem’s interpretation of the agreements would lead to arbitration of

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a situation where a lender’s employee sexually harassed another employee and the

latter had a credit account subject to the agreement. The glaring issue with these

hypotheticals is that they in no way inform the question before the court because we

must “look . . . to the underlying factual allegations and determine whether they fall

within the scope of the arbitration clause.” Amtex, 542 F.3d at 1199. True, such an

outcome would be bizarre, but we cannot comment one way or the other about

whether the claims would be arbitrable without knowing the facts supporting each of

the above illustrations.

The district court flipped the inquiry. The question is not whether there was

a way to interpret the claims as falling outside the scope of the agreements; instead,

where a valid arbitration agreement exists, the claims are arbitrable “unless it may be

said with positive assurance that the arbitration clause is not susceptible of an

interpretation that coversthe asserted dispute.” Unison Co., 789 F.3d at 818 (internal

quotation marks omitted); see also Leonard, 861 F.3d at 730 (“Doubts are resolved

in favor of arbitration unless the arbitration clause is not susceptible of an

interpretation that covers the asserted dispute.” (internal quotation marks omitted));

Amtex, 542 F.3d at 1199 (“Given the broad scope of the arbitration clause and our

‘insist[ence] upon clarity before concluding that the parties did not want to arbitrate

a related matter,’ we conclude that it cannot be said with positive assurance that the

arbitration clause is not susceptible of an interpretation that covers Amtex’s claims.”

(quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 945 (1995))).

The district court erred in deciding that these three groups of claims did not fall

within the scope of the arbitration agreements.

III.

Accordingly, we reverse the district court and remand for further proceedings

consistent with this opinion.

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