# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

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No. 1 7- 19 31

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Je ss ic a Par m , on be ha lf o f he rs el f an d a ll ot he rs si m il arl y si tu at ed

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le e

v.

Bl ue st em Bran ds , Inc

.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll an t

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No. 1 7- 19 32

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Sara Arce; Ann e Bo wers ; Nen a Oso rio , on be ha lf o f th em se lv es an d a ll ot he rs si m il arl y si tu at ed

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll ees

v.

Bl ue st em Bran ds , Inc

.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll an t

__ __ __ __ __ __
App eal s fr om

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of M in ne so ta - Mi nn eap ol is

__ __ __ __ __ __Su bm it te d: May 17, 2 01 8
Fi le d: Aug us t 7 , 20 18

__ __ __ __ __ __

Befo re SHEPHERD, KELLY, an d GRAS Z, Circ ui t J ud ge s.

__ __ __ __ __ __
SHEPHERD, Cir cu it Ju dg e.

Je ss ic a Parm

, Sara h Arce, Ann e Bo wers , an d Nen a Oso rio rep res en t a cl as s of

pe op le w h o p u rch as ed go od s fro m Bl ue st em Bran ds

, In c. (“ Bl ue st em ”) an d were

ex te nd ed a li ne of c red it in ord er t o m ak e th os e pu rch as es

. As part of th e fin an ci ng

ap pl ic at io n, each pl ai nt iff ag reed to arb it rat e an y di sp ut e “ ari si ng fro m or rel at in g to

th e cred it of

fere d or pr ov id ed to ” th em

. Afte r di sc ov eri n g t h a t Bl ue st em al le ge dl y

en ga ge d in un sc ru pu lo us bu si ne ss pr act ic es , th e pl ai nt iff s br ou gh t th es e cl as s act io n

su it s ag ai ns t Bl ue st em , as se r t i ng a nu m be r of cl ai m s un de r fed eral an d st at e la ws.
The cas es were co ns ol id at ed

, an d Bl ue st em m ov ed to co m pe l arb it rat io n. The di st ric t

co ur t gr an te d th e m ot io n in pa rt an d de ni ed it in pa rt. Bl ue st em ap pe al s, arg ui ng th at

al l of th e pl ai nt iff

s’ cl ai m s fal l wit hi n th e sc op e of th e arb it rat io n cl au se s. W e ag ree

an d th eref

or e rev ers e th e di st ric t co ur t an d ord er arbi tra ti on of al l pl ai nt iff s’ cl ai m s.

I.

Bl ue st em se ll s co ns um er go od s vi a tra di ti on al mai l an d te le ph on e or de rs or

on li ne us in g two webs it es , Fin ge rh ut an d Gett in gt on

. Des pi te a rem ark ab ly si m il ar

ap pe aran ce be twee n th e web si te s, th ey di ffer in two si gn ifi can t way s: Fi rs t, th e pr ic e

of an it em of

fere d on Fi ng erh ut is ge ne ral ly h ig he r th an th e pr ic e of th at sa m e it em

on Gett in gt on

. Sec o n d

, t h e pr im ary pr ic e fo r an it em on th e Fi ng erh ut web si te is

-2

-di sp la y ed in te rm s of a m on th ly pa ym e n t

, whe reas th e pr ic e di sp la y ed on th e

Gett in gt on webs it e is a si ng le , lu m p- su m am ou nt

. 1

Bl ue stem pa rtn ers wit h in de pe nd en t fin an ci al ins tit uti ons to pr ovi de cr ed it lin es

to co ns um ers fo r pu rch as es m ad e fro m Fi ng erh ut

. Tha t pa rtn er was Met aBa nk pr io r

to Ju ly 20 12 an d W eb Ban k th erea fte r. The se fin an ci ng op ti on s were di sp la y ed on th e

Fi ng erh ut web si te an d in pr in te d ad ve rti se m en ts , a nd cu st om ers were a b l e to ap pl y

on li ne or ov er th e ph on e. Dur in g th e ap pl ic at io n pr oc es s, al l co ns um ers ag reed to on e

of two arb it rat io n cl au se s rel ev an t to th e pr es en t c a s e

. Th e 20 10 cred it

ag reem en t— ap pl ic ab le to Parm

, Bo w ers , an d th e cl as s m em be rs th ey

rep res en t— st at es as f

ol lo ws:

[I]f a di sp ut e of an y ki nd ari se s ou t of th is Agr eem en t, ei th er y ou or we,
at ou r so le di sc ret io n, can ch oo se to ha ve th at d i s p u t e res ol ve d by
bi nd in g arb it rat io n. . . . Any cla im , di sp ut e o r co nt ro ve rs y , (wh et he r in

co nt ract

, reg ul at or y , to rt or ot he rwis e, whe th er pre-e xi st in g, pres en t o r fu tu re an d in cl ud in g co ns ti tu ti on al

, st at ut or y , co m m on la w, in te nt io na l

to rt an d eq ui ta bl e cl ai m s) ari si ng fro m or rel at in g to th e cred it of fere d

or pr ov id ed to y ou ; t h e a c t i o n s of y ou rs el f, us or th ird pa rti es ; or th e

va li di ty of th is Arb it rat io n pr ov is io n (in di vi du al ly an d co ll ect iv el y , a “Cl a i m”), m

us t, aft er an el ect io n by y ou or us , be res ol ve d by bi nd i n g arb it rat io n.

The 20 13 an d 20 14 Agr eem en ts —ap pl ic ab le to Arce, Oso rio

, an d th e cl as s m em be rs

th ey rep res en t— read s:

[E]ith er y ou or we, at ou r so le di sc ret io n, can ch oo se to ha ve an y di sp ut e ari si ng ou t of or rel at in g to th is Agr eem en t or ou r rel at io ns hi p res ol ve d by bin di ng arb it rat io n.

. . . .

Fi ng erh ut al so li st s a lu m

p- su m pr ic e, bu t it is in a li gh te r-co lo red an d sm al le r- 1

si zed fon t ju st ab ov e th e m on th ly pay m en t.

-3

-Fo r pu rp os es of th is Arb it rat io n pr ov is io n, “ di sp ut e” sh al l be co ns tru ed

as br oa dl y as po ss ib le

, an d sh al l in cl ud e an y c l a i m , di sp ut e or

co nt ro ve rs y (wh et he r in co nt ract

, reg ul at or y , to rt or ot he rwis e, whe th er
pr eex is ti ng , pr es en t or fu tu re an d i n c lu di ng co ns ti tu ti on al

, st at ut or y ,
co m m on la w, in te nt io na l to rt an d eq ui ta bl e cl a i ms) ari si ng fro m or rel at in g to th is Agr eem en t, th e cred it of fere d or pr ov id ed to y ou , or th e
go od s or se rv ic es yo u p u r ch as e; th e act io ns of y ou rs el f, us , or th ird

pa rti es ; or th e va li di ty o f th is Agre em en t o r th is Arb it rat io n pr ov is io n. It in cl ud es di s p u te s br ou gh t as co un te rcl ai m s, cro ss cl ai m s, or th ird

pa rty clai m s.

The ag reem en ts fu rth er st at e th at th e co nt ract in g pa rty wou ld be bo un d by th e te rm s

co nt ai ne d th erei n fro m th e ti m e he or sh e fir st us ed th e cred it

. Each of th e pl ai nt iff s

was ap pr ov ed fo r a li ne of cred it wit h on e of th e ba nk s an d pr oc eed e d t o u s e t h a t

fin an ci ng to pu rch as e g oo ds vi a Fi ng erh ut

.

The pl ai nt iff

s br ou gh t th es e act io ns , al le gi ng th at Bl ue st em en ga ge d in a 2

ta rg et ed ad ve rti si ng cam pa ig n, whe reb y i t di rect ed pe op le wit h lo wer in co m e an d

c r ed it sc or es to Fi ng erh ut an d pe op le wit h hi gh er in co m e an d cred it sc or es to

Gett in gt on

. Th e p la in ti ffs fu rth er al le ge d th at Bl ue st em im po se d hi dd en fin an ce
ch arg es th at ex ceed m ax im um st at ut or y

li m it s i n a m an ne r vi ol at iv e o f a n um be r of

st a t e a n d fed eral us ur y , co nt ract

, tru th -in -le nd in g, an d de cep ti ve m ark et in g la ws.

Bl ue st em m ov ed to co m

pe l arb it rat io n un de r th e ag reem en ts th e pl ai nt iff s si gn ed

, an d

th e d is tri ct co ur t g ran te d t hi s m ot io n in pa rt, t he reb y co m pe ll in g a rb it rat io n o f on ly

a su bs et of t he cla im s.

Parm fil ed he r cl as s act io n co m pl ai nt in th e Uni te d St at es Dis tri ct Co ur t fo r 2

th e Dis tri ct of Mi nn es ot a. Arce, Bo wers , an d Oso rio fil ed th ei r co m pl ai nt in th e Cen tra l Dis tri ct of Cal ifo rn ia

. The two act io ns were la te r co ns ol id at ed in th e Dis tri ct of Mi nn es ot a. As wil l be di sc us se d fu rth er la te r in th is op in io n, th e su bs ta nc e of th e
two co m pl ai nt s i s i de nt ic al in all m at eri al res pe ct s.

-4

-As is rel ev an t to th is ap pe al

, th e co ur t fo un d t h a t t h r e e gr ou ps of cl ai m s fal l

ou ts id e th e sc op e of th e r e s p e ct iv e cred it ag reem en ts an d th us are no t su bjec t to

arb it rat io n. Fi rs t, it fo un d th at th e st at e us ur y co un ts su rv iv e Bl ue st em ’s m ot io n “ to

th e ex te nt

. . . [th ey ] al le ge th at th e hi dd en fin an ce ch arg es vi ol at e st at e la w reg ard le ss

of th e in te res t rat es ch arg ed un de r th e cred it ag reem en ts .” Seco nd

, to th e ex te nt th at

th e pl ai nt iff

s’ st at e an d fed eral co un ts al le ge th at “ Bl ue st em sh o u l d ha ve di sc lo se d

th at th e pr ic es in cl ud ed hi dd en fin an ce ch arg es ,” th e co ur t co nc lu de d t h a t “ th es e
cl ai m s do no t rel at e to th e rev ol vi ng cred it acco un ts in an y way .” Fi na ll y , it he ld th at

“ to th e ex te nt th at Pl ai nt iff s cl ai m un jus t en ric hm en t so le ly in rel at io n to Bl ue st em ’s

sa le o f go od s an d pr ic in g fo r th os e go od s— as op po se d to th e Ban ks ’ pr ov is io n of

cred it th ro ug h th e rev ol vi ng cred it acco un ts —t he se cl ai m s do no t ari se ou t of or rel at e

to th e cred it ag reem en ts or th e Pl ai n t i f fs ’ rel at io ns hi p wit h th e Ban ks .” Bl ue st em

ap pe al s.

II.

Bl ue st em co nt en ds th at th e di st ric t co ur t erre d in it s de te rm in at io n th at th e pl ai nt iff s’ s ta te -la w us ur y

co un ts , st at e an d fed eral fin an ci al -d is cl os ur e co un ts , a nd

st at e-l aw un

jus t en ric hm en t co un ts were no t arb it rab le

. W e rev ie w th is ch al le ng e de

no vo

. Ci cl e v. Ch as e Ban k USA, 58 3 F.3 d 54 9, 55 3 (8 th C i r

. 2 0 0 9 ). The re is no
ch al le ng e to Bl ue st em ’s ab il it y to en fo rce th e ag reem en ts

, no r do th e a p p e l le es

co nt en d t ha t t he ag reem en ts th em se lv es are i nv al id

.

Two qu es ti on s are pe rti ne nt whe n rev ie win g an or de r de nyin g a m ot io n to

co m pe l arb it rat io n: (1 ) whe th er th e pa rti es en te red a va li d arb it rat io n ag reem en t, an d,
( 2 ) if so , whe th er th e pa rti es ’ pa rti cu la r “ di sp ut e fal ls wit hi n th e sc op e of t h e
arb it rat io n ag reem en t.” Uni so n Co

. v. Ju hl Ene rg y Dev

., In c., 78 9 F.3 d 81 6, 81 8 (8 th

Ci r. 20 15 ) (em

ph as is om it te d)

. “ [S]tat e co nt ract la w go ve rn s th e th res ho ld qu es ti on

of whe th er an en fo rcea bl e arb it rat io n ag reem en t ex is ts be twee n li ti ga nt s; if an

en fo rcea bl e ag reem en t ex is ts

, th e fed e ral su bs ta nt iv e la w of arb it rab il it y go ve rn s

-5

-whe th er th e li ti ga nt s’ di sp ut e fal ls wit hi n th e sc o p e of th e arb it rat io n ag reem en t.”

Don al ds on Co

. v. Bu rro ug hs Dies el

, In c., 58 1 F.3 d 72 6, 73 1 (8 th Ci r. 20 09 ). Giv en

th e ap pe ll ees ’ c on ces si on th at th ere is a va li d arb it rat io n ag reem en t, we are 3

co nc ern ed on ly wit h whe th er th e cu rren t di sp ut e fal ls wit hi n th e ag reem en ts ’ sc op e.

It i s a “ fu nd am en ta l p rin ci pl e th at arb it rat io n is a m at te r of co nt ract .” AT&T

M ob il it y LLC v. Co nc ep ci on , 56 3 U.S. 33 3, 33 9 (2 01 1) (in te rn al qu ot at io n mar k s

om it te d)

. Acco rd in gl y , “ a p a r t y c a n no t be req ui red to su bm it to arb it rat io n an y
di sp ut e whi ch he ha s no t ag reed so to su bm it .” Hows am v. Dean W it te r R e yno ld s,

In c., 53 7 U.S. 7 9, 8 3 (2 00 2) . B ut whe re a va li d arb it rat io n ag reem en t ex is ts , “ [w]e

m us t li be ral ly co ns tru e” it

, “ res ol vi ng an y do ub ts in fav or of arb it rat io n

. . . un le ss it

m ay be sa id wit h po si ti ve as su ran ce th at th e arb it rat io n cl au se is no t su sc ep ti bl e of

an in te rp ret at io n th at co ve rs th e as se rte d d i s pu te .” Uni so n Co

., 78 9 F.3 d at 81 8
(s eco nd al te rat io n in or ig in al ) (in te rn al qu ot at io n mar k s om it te d)

. The sp eci fic

in qu iry be fo re us , th en , is whe th er th e arb it rat io n cl au se s a r e su sc ep ti bl e to an

in te rp ret at io n th at co ve rs th e th ree su bs et s of cl ai m s th e di st ric t co ur t ex em pt ed fro m
arb it rat io n. Cf. id.; se e al so AT&T Tech s., In c. v. Co m m c’ns W or ke rs of Am

., 47 5

U.S. 64 3, 65 0 (1 98 6) (“ [A]n or de r to arb it rat e th e pa rti cu la r gr ie va nc e sh ou ld no t be

de ni ed un le ss it m ay be sa id wit h po si ti ve as su ran ce th at th e arb it rat io n cl au se is no t

su sc ep ti bl e of an in te r p r e t at io n th at co ve rs th e as se rte d di sp ut e. Dou bt s sh ou ld be

res ol ve d i n fa vo r of

co ve rag e.” (i nt ern al qu ot at io n m ark s o m it te d) ).

In res ol vi ng th is is su e, th e fir st qu es ti on is “ wh e t h e r th e arb it rat io n cl au se is

br oa d or na rro w.” Uni so n Co

., 78 9 F.3 d at 81 8 (q uo ti ng Fl eet Tire Serv

. of N. Lit tl e

The re is a li ve di sp ut e ov er wh ic h ag reem en t co nt ro ls th e va rio us pa rti es , bu t 3

no on e arg ue s ab ou t wh et he r an ag reem en t ex is ts in th e fir st p l a c e

. B e cau se of th e b r o a d n at ur e of th e pr ov is io ns co nt ai ne d in bo th ag reem en ts

, we do no t fin d i t

ne ces sa ry to de te rm in e whi ch ag reem en t co nt ro ls whi ch pa rty. I ns te ad

, we ch oo se
to de ci de th e is su es ba se d on ap pe ll ees ’ co nc es si on s th at Parm an d Bo wers are bo un d by th e 20 10 Agr eem en t an d Arce an d Oso rio are bo un d by th e 20 13 /2 01 4 Agr eem en t.

-6

-Ro ck v. Oli ve r Ru bb er Co

., 11 8 F.3 d 61 9, 62 1 (8 th Ci r. 19 97 )). “ If th e cl au se is

br oa d, th e li be ral fed eral po li cy fav or ing ar bit rat io n ag reem en ts req ui res th at a di st ric t

co ur t se nd a cl ai m to arb it rat io n

. . . as lo ng as th e un de rlyin g fact ua l al le ga ti on s
si m pl y to uc h m at te rs co ve red by th e arb it rat io n pr ov is io n.” Id

. (s eco nd al te rat io n in

or ig in al ) (in te rn al qu ot at io n m ark s om it te d) ; se e al so Uni te d St eel wor ke rs of Am

. v.
Dul ut h C li ni c, Ltd ., 41 3 F .3d 78 6, 78 9 (8 th Ci r. 20 05 ) (“ [I]f t he cl au se is br oa d

. . . th e co ur t an al y ze[s ] whe th e r t h e d i s pu te rel at es to th e su bjec t m at te r of th e

ag reem en t.”)

.

Bl ue st em a s s e r t s th at th e cl au se s in bo th ag reem en ts are br oa d, bu t th e

ap pe ll ees ’ po si ti on is le ss cl ear. The ap pe ll ees se em to co nc ed e th at th e cl au se s are
br oa d in m

ul ti pl e p la ces in th ei r br ie f. See Ap pe ll ees ’ Br. 34 (“ The 20 10 an d 20 14

c r e d i t ag reem en ts pr ov id e th at di sp ut es ‘aris in g fro m ’ or ‘relat in g to ’ th e cred it

ag reem en ts m

us t be arb it rat ed

. . . , an d whi le th es e ph ras es ‘[are] br oa d,’ th ey ‘[are]

no t al l en co m

pa ss in g.’” (q uo ti ng Doe v. Pri nc es s Cru is e Lin es , Ltd

., 65 7 F.3 d 12 04

, 1 2 1 8 ( 1 1 th Ci r. 20 11 )); App el le es ’ Br. 44 (s am e); App el le es ’ Br. 45 (“ Si m pl y
waiv in g aro un d a b r o a d l y dr aft ed arb it rat io n ag reem en t is no t en ou gh

. . . .”). Bu t

th ey no ne th el es s p ers is t t ha t “ th e la ng ua ge ab ou t clai m s ‘ ari si ng fro m or r el at in g t o

th e cred it of

fere d or pr ov id ed to y ou ’

. . . se rv e[s ] to li m it th e na tu re of cl ai m s

. . . th at

are su bjec t to arb it rat io n.” App el le es ’ Br. 38

. W e fir st de te rm in e th e br ead th of th e
arb it rat io n cl au se s— th at is

, whe th er th ey are br oa d or na rro w—an d we th en ap pl y th e

ap pr op ria te st an da rd to de te rm in e whe th er th e cu rren t di sp ut e fal ls wit hi n th e sc op e

of th e cl au se s. See , e.g., Un is on Co ., 78 9 F .3d at 8 18

.

A.

“ Arb it rat io n cl au se s co ve rin g cl ai m s ‘aris in g ou t of ’ or ‘rela t i n g t o’ an

ag reem en t are br oa d.” Zeto r N. Am

., In c. v. Ro zeb oo m , 86 1 F.3 d 80 7, 81 0 (8 th Ci r.

20 17 ). In de ed

, “ [s ]uch a pr ov is io n co ns ti tu te s th e br oa de st la ng ua ge th e pa rti es co ul d

reas on ab ly us e to su bjec t th ei r di sp ut es to th at fo rm of se tt le m en t, in cl ud in g co ll at eral

-7

-di sp ut es th at rel at e to th e ag reem en t co nt ai ni ng th e cl au se .” Fl eet Tire , 11 8 F .3d at

62 1. In th e y ears si nc e we ad op te d th e br oa d/ na rro w ap pr oa ch in Fl eet Tire

, we ha ve

ap pl ie d it s reas on in g st ead fas tl y so lo ng as th ere was no t li m it in g la ng ua ge el se whe re

in th e co nt ract

. 4

F ro m th is pr eced en t, we ha ve li tt le tro ub le co nc lu di ng bo th Agr ee men t s

co nt ai n “ br o a d ” a rb it rat io n cl au se s. See, e.g ., Ro zeb oo m , 86 1 F.3 d at 81 0.
Sp eci fic al ly, th e 20 10 ag reem en t st at es th at “ if a di sp ut e of an y ki nd ar is es ou t of th is
Agr eemen t , eit he r y ou or we, at ou r so le di sc ret io n, ca n c ho os e to ha ve th at di sp ut e

res ol ve d by bi nd in g arb it rat io n.” R. at 15 4 (em ph as is ad de d) ; se e Leo na rd

, 86 1 F.3 d

at 73 0 (“ The la ng ua ge ‘any di sp ut e ari si ng fro m th e Acti v i t y’ i s b r oa d.” ). It

co nt in ue s: “ Any cl ai m , di sp ut e or co n t r o v e r sy

. . . ar is in g fr om or re la ti ng to th e
cred it of fere d or pr ov id ed to y ou

. . . m us t, aft er an el ect io n by y ou or us , be res ol ve d
by bi nd i n g arb it rat io n.” R. at 15 4 (em ph as is ad de d) ; se e Griz zl e, 42 4 F.3 d at 80 0
(fi nd in g cl au se br oa d whe re it co ve red “ an y cl ai m , co nt ro ve rs y or di sp ut e ari si ng ou t

of or rel at in g to Fran ch i s e e ’s op erat io n of th e Fran ch is ed bu si ne ss un de r th e Agr eem en t” ). Th e 20 13 /2 01 4 ag reem en t— whi ch co nt ai ns ev en br oa de r

la ng ua ge —s ta te s th at “ ei th er y ou or we, at ou r so le di sc ret io n, can ch oo se to ha ve an y
di sp ut e ar is in g ou t of or re la ti ng to th is Agr eemen t or ou r rel at io ns hi p res ol ve d by

bi nd in g arb it rat io n,” a n d it fu rth er cl ari fie s th at “ ‘d is pu te ’ sh al l be co ns tr ue d as

See Leo na rd v. Del. N. Co m pa ni es Sp or t Se rv ., Inc ., 86 1 F .3d 72 7, 7 30 (8 th 4

Ci r. 20 17 ); Uni so n Co ., 78 9 F .3d at 81 8- 19 ; PRM Ene rg y Sy s., In c. v. Pri m en erg y , LLC, 59 2 F.3 d 83 0, 83 6 (8 th Ci r. 20 10 ) (fi nd in g cl au se br oa d whe re it co ve red “ ‘all
di sp ut es ari si ng un de r’ th e ag reem en t” ); 3M Co

. v. Am te x Sec., In c., 54 2 F.3 d 11 93

, 11 99 (8 th Ci r. 20 08 ) (“ W hi le th e cl au se is no t as ex te ns iv e as cl au se s whi ch req ui re arb it rat io n of ‘any ’ or ‘all’ di sp ut es , th e pa rti es ’ de fin it io ns of te rm s

. . . in di cat e th at th ey ag reed to arb it rat e a v ery br oa d ra ng e of di sp ut es

. . . .” ); CD Part ne rs , LLC v. G r i zzl e, 42 4 F.3 d 79 5, 80 0 (8 th Ci r. 20 05 ); cf. Mo se s H. Co ne Mem ’l Hos p. v

. Mer cu ry Co ns tr. C or

p., 4 60 U.S. 1, 5 (1 98 3) (cl as si fy in g as “ br oa d” a cl au se whi ch

co ve red “ [a]ll cl ai m s, di sp ut es an d ot he r m at te rs in qu es ti on ari si ng ou t of

, or rel at in g
to , th is Co nt ract or t he bre ach th ereo f”).

-8

-br oa dl

y as po ss ib le , a nd sh al l in cl u d e a n y c l ai m , d is pu te or co nt ro ve rs y

. . . ar is in g fr om or re la ti ng to th is Agr eemen t [] [ or ] th e cred it of fere d or pr ov id ed to y ou .” R.

at 14 8 (em

ph as is ad de d) ; s ee Un is on Co ., 78 9 F .3d at 8 18 -1 9 (f in di ng cla us e b ro ad

whe re it co ve red “ ‘any di sp ut e’ ar is in g be twee n th e pa rti es ‘ un de r or in co nn ect io n
wit h [th e co nt ract ] or an y le ga l rel at io ns hi p as so ci at ed wit h or co nt em pl at ed by [th e

co nt ract ]”).

B.

In ap pl y in g a br oa d cl au se , we as k whe th er “ th e un de rlyin g fact ua l al le ga ti on s
si m pl y to uc h m at te rs co ve red by th e arb it rat io n pr ov is io n.” Uni so n Co

., 78 9 F.3 d at

81 8 (in te rn al qu ot at io n m ark s om it te d )

. To an swe r th is qu es ti on , “ [o ]ur ta sk is to

lo ok pa st th e la be ls th e pa rti es at ta ch t o th ei r cl ai m s to th e un de rlyin g fact ua l

al le ga ti on s an d de te rm in e whe th er th ey fal l wit hi n th e sc o p e o f th e arb it rat io n
cl au se .” Am

te x, 54 2 F.3 d at 11 99

. Thu s, we m us t be gi n wit h an an al y s i s of th e

op erat iv e co m

pl ai nt s.

Turn in g to a sa m

pl e of th e act ua l la ng ua ge us ed in th e pl ai nt iff s’ cl ai m s, th is

5

is wha t th e pl ai nt if

f s a l l e g e wit h res pe ct to th e th ree gr ou ps of cl ai m s at is su e on

ap pe al :

As st at ed

, th e qu ot at io ns th at fo ll ow are m erel y a sa m pl e of th e s c o r e s of 5

al le ga ti on s in th e co m

pl ai nt s whi ch rel y on th e sa m e cl ai m s. Add it io na ll y , ap art fro m th e d iff eren t l an gu ag e th e res pe ct iv e st at es us e to de fin e th ei r own laws , th ere i s n o

m ean in gf ul di ffer en ce in th e fact ua l al le ga ti on s be twee n th e Parm co m pl ai nt an d th e Arce/ Oso rio co m

pl ai nt

. In de ed

, in m os t in st an ces , th e sa m e la ng ua ge is us ed

. Co m pa re, e.g

. , R

. a t 2 (al le ga ti on fro m th e Parm co m pl ai nt st at in g “ Ite m s so ld on Fi ng erh ut to lo w-in co m e co ns um ers co m e wit h su bs ta nt ia l m ark up s.

. . . Thi s m as si ve

sa le s pr ic e m ark up is act ua ll y a fin an ce ch arg e in di sg ui se .”), wit h R. at 76 (al le ga ti on fro m th e Arce/ Oso rio co m

pl ai nt wit h a lm os t i de nt ic al lan gu ag e).

-9

-Usu ry All eg at io ns

1. “ As se t fo rth m or e fu ll y ab ov e, Defen da nt ’s pr ic es are si gn ifi can tl y m ark ed up

to m as k th e hi dd en in te res t ch arg es

. W he n th os e in te r e st ch arg es are

co ns id ered

, Defen da nt ’s lo an s carr y an [s ic ] in te res t at a rat e gr eat er th an 16 %

pe r an nu m

in vi ol at io n o f [Geo rg ia law].” R. at 1 6.

2. “ Defen da nt ch arg es an an nu al in te res t rat e of ap pr ox im at el y 24 .90 %. Thi s

an nu al in te res t rat e is dr iv en ev en hi gh er whe n th e hi dd en fin an ce ch arg es are

acco un te d fo r. Thes e rat es of i nt eres t ar e far in ex ces s of th e m ax im um 10 %

an nu al in te res t al lo wed un de r Tex as us ur y la ws, 18 % al lo wed un de r Fl or id a

us ur y laws , or 1 8% a ll owe d u nd er Mi nn es ot a u su ry laws .” R. at 8 4.

Unj us t En ri ch men t Al le

ga ti on s

1. “ By m ean s of Defen da nt ’s wro ng fu l co nd uc t al le ge d he rei n, it kn owi ng ly so ld

pr od uc ts at m as si ve ly m ark ed -u p pr ic es th at di sg ui se d fin an ce ch arg es , [s ic ]

an d e xc es si ve in te res t.” R. at 21 , 11 3.

2. “Un d e r th e co m

m on la w do ct rin e of un

jus t en ric hm en t, it is in eq ui ta bl e fo r

Defen da nt to be pe rm it te d t o ret ai n th e be ne fit s it rece iv ed

, an d is st il l

rece iv in g, fro m th e im

po si ti on of hi dd en fina nc e ch arg es an d ex ces si ve in te res t

on Pla in ti ff an d m em

be rs of t he cla ss es .” R. at 2 1, 1 13

.

Tr ut h- in -Len di ng

/C on su mer Pro te ct io n Al le

ga ti on s

1. “ Add in g i ns ul t t o i nju ry , Defen da nt ch arg es an ot he r ro un d of ext rem el y hi gh

in te res t ch arg es th ro ug h th e cred it i t a r r an ge s vi a it s pa rtn ers

. Bec au se th e

sa le s pr ic e is al read y in cl us iv e of th e hi dd en fin an ce c h a r ge , Fi ng erh ut is

act ua ll y ch arg in g in te res t on in te res t, wit ho ut di s c l o si ng th is fact to

co ns um ers .” R. at 9 , 83

.

-1 0-2. “ Defen da nt ’s w r o n g f u l c o n d u c t i s l i k e l y to crea te a ris k of co nf us io n o r

m is un de rs ta nd in g in cl ud in g , by way of ex am pl e an d no t li m it at io n:

Defen da nt ’s fai lu re t o d is cl os e th e h id de n fi na nc e ch arg e.” R. at 20

. 3. “As a r es ul t of th e Defen da nt ’s co nd uc t, Pl ai nt iff an d th e Hid de n Fi na n c e
Ch arg e Cl as s m em

be rs ha ve su ffer ed act ua l da m ag es in th at th ey pa id a hi gh er

pr ic e to fin an ce th ei r pu rch as es th an was di sc lo se d to th em at th e fo rm at io n of

th e co nt ract .” R. at 2 0, 1 11

. 4. “ [Cal ifo rn ia la w] req ui res , at th e ti m e of op en in g th e acco un t, a cred it or m us t

m ak e, [s ic ] a st at em en t of whe n th e ch arg e be gi ns to accr ue an d an ex pl an at io n

of whe th er or no t an y ti m e pe rio d ex is ts wit hi n whi ch an y cred it th at ha s be en

ex te nd ed m ay be rep ai d wit ho ut in cu r r i n g th e ch arg e.” R. at 96 (in te rn al

qu ot at io n m ark s o m it te d)

. 5. “ As di sc us se d a b o v e, Defen da nt ch arg ed m or e on Fi ng erh ut —wh ere

co ns um ers fin an ced th ei r pu rch as es —t he n [s ic ] on Gett in gt on —wh ere th ey

pu rch as ed th em ou tri gh t. Thi s in crea se d pr ic e was a ch arg e as se ss ed fo r th e

pr iv il eg e of pu rch as in g th e go od s in in st a l l men ts

. Thu s, th is in crea se d pr ic e
be cam e a fi na nc e ch arg e.” R. at 97 , 98

. 6. “ Add it io na ll y , Defen da nt di sc lo se d th ey wou ld ch arg e an APR of 21 .65 % pl us

th e Pri m e Rat e ag ai ns t th e av erag e da i l y b a la nc e. Howev er, th is di sc lo su re
do es no t in cl ud e th e fin an ce ch arg e as se ss ed by Defen da nt at th e ou ts et of th e

pu rch as e. Thu s, t he 21 .65 % + Pri m e Rat e was in accu rat e.” R. at 99

. 7. “ In su m , ne arl y al l of th e go od s so ld on Fi ng erh ut are av ai la bl e on Gett in gt on

fo r a si gn ifi can tl y lo wer sa le s pr ic e. The m ark up on Fi ng e r h u t is act ua ll y a

h i d d e n fin an ce ch arg e. By no t di sc lo si ng th is fin an ce ch arg e, Defen da n t

de cei ve d co ns u mer s an d vi ol at ed th e Trut h in Len di ng Act [TILA]

. . . .” R.

at 10 , 84

. 8. “ Pu rs ua nt to [fed eral la w]

, Defen da nt is li ab le fo r vi ol at in g th e TILA by fai li ng

to di sc lo se to Pl ai nt iff an d th e Hi d d e n F in an ce Ch arg e Cl as s m em be rs al l

fin an ce ch arg es

. . . .” R. at 2 2, 1 09

.

-1 1-In su m , th e pl ai nt iff s’ th eo ry is th at Bl ue st em is as se ss in g a “hid de n fin an ce
ch arg e,” whi ch is ev id en ced by th e hi gh er pr ic e of go od s on Fi ng erh ut ’s pl at fo rm as

co m pa red to Gett in gt on

. Thu s, th e arg um en t go es , be cau se (1 ) Fi ng erh ut ch arg es , fo r

ex am pl e, $1 00 m or e fo r a pa rti cu la r pr od uc t th an th e s a me p r o d uc t feat ur ed on

Gett in gt on , an d be cau se (2 ) Fi ng erh ut is al read y c h a r g in g an ex or bi ta nt am ou nt of

in te res t to fin an ce th e pu rch as e, st at e us ur y an d un jus t en ric hm en t la ws are be in g 6

vi ol at ed

, as are st at e an d fed eral co ns um er pr ot ect io n la ws. As sh own by a rev ie w of

th e ve rb at im reci ta ti on s fro m th e pl ai nt iff s ’ cl ai m s, th e fact ua l al le ga ti on s

un de rp in ni ng ev ery si ng le cl ai m “ ari se [] fro m ” or “ rel at e[] t o ” th e fin an ci ng

ag ree ment s be cau se , wit ho ut th os e ag reem en ts

, th ere co ul d be no “ hi dd en fin an ce

c h a r ge [s ]. ” In de ed , t he re wou ld be no fin an ci ng at al l, an d th is cas e wou ld in s t e a d

tu rn on whet he r so m eo ne pa id cas h fo r an ov erp ric ed it em

.

Fo r ex am pl e, acco rd in g to th e Arce/ Oso rio co m pl ai nt

, Cal ifo rn ia la w de fin es

a “ fin an ce ch arg e” as “ th e am ou nt ho wev er de no m in at ed or expr es se d whi ch th e ret ai l

bu y er co nt ract s to pa y or pa y s fo r th e pr iv il eg e of pu rch as in g go od s or se rv ic es to be

pa id fo r by th e bu y er in in st al lm en ts .” R. at 98

. The refo re, if a co ns um er co m pl et ed

an ou tri gh t cas h pu rch as e of an iP ad fo r $1 00 m or e th an th e ret ai l v a l u e , th at $1 00

co ul d n o l on ge r be a hi dd en “ fin an ce char ge ” un de r Cal ifo rn ia law b ecau se th ere i s

no in st al lm en t pl an

. Thi s sa m e an al y si s ap pl ie s to th e pl ai nt iff s’ fed eral cl ai m s un de r

TILA be cau s e , as de fin ed in th at act

, “ [‘] [f]in an ce ch arg es ’ are ‘the su m of al l

ch arg es , pa y ab le di rect ly or in di rect ly by th e pe rs on to who m th e cre di t i s ext en de d

an d im po se d di rect ly o r in di rect ly b y th e cred it or as an i n c i d en t to th e ex te ns io n of

cred it .’ ” R. at 10 9 (q uo ti ng 15 U.S.C. § 16 05 (a))

. Here ag ai n, wit ho ut an “ ex te ns io n

of cred it ,” we are le ft wit h an o v e r p r i c e d it em pu rch as ed wit h cas h. Fu rth er,

Si gn ifi can tl y , Bl ue st em was th e on ly pa rty na m ed as a de fen da nt in th e 6

co m pl ai nt s. Thu s, th e m

y ria d of al le ga ti on s co nc ern in g “ Defen da nt ’s lo an s” an d th e in te res t ch arg ed by “ Defen da nt ” are co nf us in g be cau se th es e ph ras es wou ld be be tt er di rect ed at on e of th e ba nk s pr ov id in g th e fin an c i n g. Non et he le ss , we si m pl y de al
wit h t he all eg at io ns as p le d i n t he co m pl ai nt

.

-1 2-r e g a r di ng th e us ur y cl ai m s, ev ery al le ga ti on st art s wit h th e 24 .90 % ch arg ed by t h e

le nd er an d ad ds to th at am ou nt th e al le ge d hi dd en fin an ce ch arg e to eq ua l an am ou nt

gr eat er th an th at al lo wed by la w in each of th e res pe ct i v e s t a t e s

. A nd fin al ly, th e

un jus t en ric hm en t cl ai m s de pe nd on “ th e im po si ti on of hi dd en fi na nc e ch arg es an d

ex ces si ve in te res t.” All of th es e al le ga ti on s th eref or e “ to uc h m at te rs co ve red by th e
arb it r a ti on pr ov is io n[ s].” Uni so n Co

., 78 9 F.3 d at 81 8 (in te rn al qu ot at io n m ark s

om it te d)

. Sp eci fic al ly, each cl ai m im pl ic at es “ th e cred it of

fere d or pr ov id ed to ” th e

c on su m ers be cau se th e fact s un de rlyin g ev ery cl ai m ov erwh el m in gl y de ta il th e

fin an ci ng rel at io ns hi p b et ween th e co ns um ers an d B lu es te m

.

Rel y in g on th e di st ric t cou rt’s reas on in g, th e ap pe ll ees res is t th is ou tc om e by

as se rti ng th at th ei r cl ai m s wou ld pe rs is t ev en in th e ab se nc e of th e fi n a n ci ng

ar r a n g e m en ts

. Bu t ho w can th is be whe n th e fact ua l al le ga ti on s un de rlyin g ev ery
si ng le cl ai m de pe nd on th e ex is te nc e of th e fin an ci ng ? Sp eci fic al ly, th e ap pe ll ees

arg ue th a t t h e d i s tri ct co ur t was co rrec t in al lo win g th ei r cl ai m s to pr oc eed to th e

ex te nt th ose claim s in vo lv ed on ly Bl ue st em ’s in de pe nd en t de ci si on to ch arg e a hi gh er

pr ic e fo r go od s on Fi ng erh ut

. The act ua l al le ga ti on s in th ei r co m pl ai nt

, ho wev er, do

no t be ar th is ou t. The si m pl e fact is th at ev ery si ng le on e of th e pl ai nt iff s us ed hi s or
he r li ne of cred it to fin an ce a pu rch as e fo r an it em fro m Fi ng erh ut : on e w h ic h th ey

no w cl ai m is ov erp ric ed to m as k a hi dd en fin an ce ch arg e b u il t in to th e or ig in al

fin an ci ng each pl ai nt iff se cu red fro m on e o f th e ba nk s. The ac tu al

al le g at io ns —re ga rd le ss of ho w th e pl ai nt iff s no w at te m

pt to ch arac te riz e

th em —t he refo re d ire ct ly inv ol ve “ th e cre di t o ffer ed or p ro vi de d t o” th e p la in ti ffs

.

The ap pe ll ees pu sh on , in si st in g th at Bl ue st em ’s in te rp ret at io n wou ld req ui re
arb it rat io n of di sp ut es co nc ern in g, fo r ex am pl e, a car acci de nt be twee n a co ns um er

an d he r ne ig hb or or th e th ird -p art y co ur ie r who de li ve rs th e pa ck ag es , or a pe rs on al

in jury cl ai m ag ai ns t Sam su ng whe re a co ns um er pu rch as ed an ex pl od in g cel l ph on e

fro m Fi ng erh ut

. Th e di st ric t co ur t, to o, en ga ge d in th is hypo th et ic al ex erci se ,
po si ti ng th at Bl ue st em ’s in te rp ret at io n of th e ag reem en ts wou ld le ad to arb it rat io n of

-1 3-a si tu at io n whe re a le nd er’s e mp l oyee se xu al ly ha ras se d an ot he r em pl oyee an d th e

la tt er ha d a cred it acco un t su bjec t to th e ag reem en t. The gl ari ng is s u e w i t h t he se hypo th et ic al s is th at th ey in no way in fo rm th e qu es ti on be fo re th e co ur t be cau se we

m us t “ lo ok

. . . to th e un de rlyin g fact ua l al le ga ti on s an d de te rm in e whe th er th ey fal l

wit hi n th e sc op e of th e arb it rat io n cl au se .” Am te x, 54 2 F.3 d at 11 99

. True

, su ch an

ou tc om e wou ld be bi z a r r e , b ut we can no t co m m en t on e way or th e ot he r ab ou t

whe th er th e cl ai m s wou ld be arb it rab le wit ho ut kn owi ng th e fact s su pp or ti ng each of

th e ab ov e il lu st rat io ns

.

The di st ric t co ur t fli pp ed th e in qu iry. Th e qu es ti on is no t whe th er th ere was

a way to in te rp ret th e cl ai m s as fall in g ou ts id e th e sc op e of th e ag reem en ts ; in st ead

, whe re a va li d arb it rat io n ag reem en t ex is ts

, th e cl ai m s are arb it rab le “ un le ss it m ay be

sa id wit h po si ti ve as su ran ce th at th e arb it rat io n cl au se is no t su sc ep ti bl e of an

in te rp ret at io n th at co ve rs th e as se rte d di sp ut e.” Uni so n Co

., 78 9 F.3 d at 81 8 (in te rn al

qu ot at io n m ark s om it te d) ; se e al so Leon ard , 86 1 F .3d at 73 0 (“ Dou bt s are res ol ve d

in fav or of arb it rat io n un le ss th e arb it rat io n cl au se i s no t su sc ep ti bl e of an

in te rp ret at io n th at co ve rs th e as se rte d di sp ut e.” (in te rn al qu ot at io n m ark s om it te d) );

Am te x, 54 2 F.3 d at 11 99 (“ Giv en th e br oa d sc op e of th e arb it rat io n cl au se an d ou r
‘ins is t[e nc e] up on cl ari ty be fo re co nc lu di ng th at th e pa rti es di d no t wan t to arb it rat e

a rel at ed m at te r,’ we co nc lu de th at it can no t be sa id wit h po si ti ve as su ran ce th at th e
arb it rat io n cl au se is no t su sc ep ti bl e of an in te rp ret at io n th at co ve rs Am te x’s cl ai m s.”
(q uo ti ng Fir st Opt io ns of C hi cag o, In c. v. Kap la n, 5 14 U.S. 93 8, 9 45 (19 95 ))).

The di st ric t co ur t erre d in de ci di ng th at th es e th ree gr ou ps of cl ai m s di d no t fal l

wit hi n t he sco pe of t he arb it rat io n a gr eem en ts

.

III.

Acco rd in gl y , we rev ers e th e di st ric t co ur t an d rem an d fo r fu rth er pr oc eed in gs

co ns is te nt wit h t hi s o pi ni on

.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

-1 4-