Court Opinion

ID: 4257171
Source: CourtListenerOpinion
Date Created: 2018-03-22 16:00:21.980491+00
Date Added: 2024-06-11T07:49:19.778102
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 17-1486
A.D., a minor, individually and on behalf of all others simi-
larly situated,
                                          Plaintiff-Appellant,

                                 v.

CREDIT ONE BANK, N.A.,
                                                 Defendant-Appellee.
                     ____________________

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
          No. 1:14-cv-10106 — Matthew F. Kennelly, Judge.
                     ____________________

  ARGUED NOVEMBER 29, 2017 — DECIDED MARCH 22, 2018
                     ____________________

   Before WOOD, Chief Judge, and RIPPLE and KANNE, Circuit
Judges.
    RIPPLE, Circuit Judge. A.D., by and through her mother, Ju-
dith Serrano, brought this putative class action under the Tel-
ephone Consumer Protection Act. She seeks compensation for
telephone calls placed by Credit One Bank, N.A.
(“Credit One”) to her telephone number in an effort to collect
a debt that she did not owe. After discovery, Credit One
2                                                                 No. 17-1486

moved to compel arbitration and to defeat A.D.’s motion for
class certification based on a cardholder agreement between
Credit One and Ms. Serrano. The district court granted
Credit One’s motion to compel arbitration but certified for in-
terlocutory appeal the question whether A.D. is bound by the
cardholder agreement. 1 We granted A.D.’s request for per-
mission to appeal. See 28 U.S.C. § 1292(b). 2 We now reverse
the district court’s grant of Credit One’s motion to compel ar-
bitration and remand for further proceedings consistent with
this opinion. A.D. is not bound by the terms of the cardholder
agreement to arbitrate with Credit One, and she has not di-
rectly benefited from the cardholder agreement such that eq-
uitable principles convince us to apply the arbitration clause
against her.

                                        I
                             BACKGROUND
                                       A.
    In 1991, Congress amended the Communications Act of
1934 to address “the advent of automated devices that dial up
to 1,000 phone numbers an hour and play prerecorded sales
pitches.” Moser v. FCC, 46 F.3d 970, 972 (9th Cir. 1995). The
amending statute, the Telephone Consumer Protection Act
(“TCPA”), makes it unlawful to use an “automatic telephone
dialing system or an artificial or prerecorded voice” to call a
cell phone without “the prior express consent of the called
party.” 47 U.S.C. § 227(b)(1)(A). An individual who provides

1   The district court also denied A.D.’s motion for class certification.
2   The district court had jurisdiction under 28 U.S.C. § 1331.
No. 17-1486                                                     3

her cell phone number to a creditor through a credit applica-
tion “reasonably evidences prior express consent … to be con-
tacted at that number regarding the debt.” Rules & Regulations
Implementing the Tel. Consumer Prot. Act of 1991, 23 FCC Rcd.
559, 564 (FCC 2008). A creditor relying on the “prior express
consent” exception to the TCPA has the burden of showing
that “it obtained the necessary prior express consent.” Id. at
565.
    The TCPA provides a private right of action for individu-
als to claim that their rights under the TCPA have been vio-
lated. See 47 U.S.C. § 227(b)(3). Successful plaintiffs may re-
cover the greater of the amount of (1) actual damages or (2)
$500 for each violation, meaning each phone call. Id.

                               B.
   Ms. Serrano opened a credit card account with Credit One
in 2003. In 2010, she used A.D.’s cell phone to access her
Credit One account by calling Credit One and providing her
account number and the last four digits of her social security
number. Using caller ID capture software, Credit One at-
tached A.D.’s cell phone number to Ms. Serrano’s account.
    Ms. Serrano later fell behind on her credit card payments,
and Credit One began calling the telephone numbers previ-
ously stored with her account in an attempt to collect the debt.
In her complaint, A.D. alleges that, in the course of this collec-
tion process, Credit One repeatedly called her about her
mother’s debt. Specifically, A.D. alleges that she received a
good number of calls from Credit One in October and No-
vember 2014.
4                                                 No. 17-1486

    Upon opening her account with Credit One, Ms. Serrano
had signed a standard cardholder agreement. This agreement
included, among other terms, an arbitration clause and class
action waiver, which stated:
      Agreement to Arbitrate:
      You and we agree that either you or we may,
      without the other’s consent, require that any
      controversy or dispute between you and us (all
      of which are called “Claims”), be submitted to
      mandatory, binding arbitration. This arbitration
      provision is made pursuant to a transaction in-
      volving interstate commerce, and shall be gov-
      erned by, and enforceable under, the Federal
      Arbitration Act (the “FAA”), 9 U.S.C. § 1 et seq.,
      and (to the extent State law is applicable), the
      State law governing this Agreement.
      …
      Claims subject to arbitration include not only
      Claims made directly by you, but also Claims
      made by anyone connected with you or claim-
      ing through you, such as a co-applicant or au-
      thorized user of your account, your agent, rep-
      resentative or heirs, or a trustee in bankruptcy.
      …
      If you or we require arbitration of a particular
      Claim, neither you, we, nor any other person
      may pursue the Claim in any litigation, whether
No. 17-1486                                                                5

           as a class action, private attorney general action,
           other representative action or otherwise.[ 3]
   When A.D. first filed this action, Credit One was not aware
that it had a cardholder agreement with her mother. A.D. did
not state in her complaint that her mother was the probable
target of Credit One’s phone calls (although she was listed as
A.D.’s guardian ad litem in the complaint). After eighteen
months of discovery, and after reviewing its own records,
Credit One finally realized that its caller ID capture system
had added A.D.’s phone number to its database when
Ms. Serrano used A.D.’s phone to access her account. At that
point, Credit One sought to compel arbitration with A.D.
based on the arbitration clause in Ms. Serrano’s cardholder
agreement.4
   The only evidence that A.D. ever used Ms. Serrano’s
Credit One credit card was Ms. Serrano’s deposition testi-
mony that, on at least one occasion, Ms. Serrano had preor-
dered smoothie drinks for her daughter and herself from a
stand in the local mall and had sent A.D. to pick them up. She
had instructed A.D. to pay for the smoothies with her
Credit One card. This transaction occurred in 2014, when
A.D. was fourteen years old.

3   R.78-3 at 8.
4 In response to Credit One’s motion to compel arbitration, A.D. urged
that Credit One had waived its right to arbitrate by waiting too long and
by filing other substantive motions in the district court before moving to
compel arbitration. The district court concluded that even if Credit One
could have checked its databases for A.D.’s phone number earlier,
Credit One did not have a factual basis for invoking its right to arbitration
until Ms. Serrano’s deposition, when it “learned the extent to which A.D.
was connected to her mother’s Credit One account.” R.118 at 19.
6                                                   No. 17-1486

    The district court ruled with Credit One that A.D. was
bound by the cardholder agreement’s arbitration clause. In its
view, even though A.D. had not signed the cardholder agree-
ment, she must be considered an “Authorized User” under its
terms. Therefore, continued the court, she is bound by the ar-
bitration clause under the “direct benefits estoppel” theory.
Under this theory, explained the court, a person should not
receive a benefit under a contract while, at the same time, re-
pudiating a disadvantage under the contract. The court then
reasoned that the cardholder agreement had allowed A.D.,
when picking up the drinks ordered by her mother, to repre-
sent to the store that Credit One would pay for the purchase.
She therefore had benefited from the cardholder agreement
between her mother and Credit One. Having accepted a ben-
efit under the contract, the district court concluded, she must
accept the burden of the arbitration clause.
    Because it concluded that the arbitration clause in the
cardholder agreement was applicable, the court stayed the
case pending the outcome of arbitration. A.D. filed a motion
to reconsider, or, in the alternative, to certify the arbitration
question for interlocutory appeal under 28 U.S.C. § 1292(b).
The district court denied the motion to reconsider but granted
the motion to certify the ruling for interlocutory appeal. In
certifying the question for interlocutory appeal, the court
noted that “[t]here is a substantial ground for difference of
opinion because the contours of the arbitration-by-estoppel
doctrine in the Seventh Circuit are unclear.” 5 We later granted
a petition for certification.

5   R.126 at 2.
No. 17-1486                                                     7

                                II
                        DISCUSSION
    We review a district court’s ruling on a motion to compel
arbitration de novo. Scheurer v. Fromm Family Foods LLC, 863
F.3d 748, 751 (7th Cir. 2017). Any findings of fact underlying
that decision are reviewed for clear error. Id. As we noted in
Scheurer, “arbitrability may depend on equitable doctrines
such as waiver and estoppel, which may require a court to
resolve issues such as prejudice and reliance.” Id. at 752 n.2.
We review a district court’s decision to apply an equitable
doctrine for an abuse of discretion, and “nothing about arbi-
tration would seem to call for a different approach.” Id.

                               A.
    Our case law establishes three bedrock principles about
the enforcement of arbitration agreements. First, the Federal
Arbitration Act evinces a “national policy favoring arbitra-
tion.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 346
(2011) (quoting Buckeye Check Cashing, Inc. v. Cardegna, 546
U.S. 440, 443 (2006)). Second, an arbitration agreement gener-
ally cannot bind a non-signatory. Zurich Am. Ins. Co. v. Watts
Indus., Inc., 417 F.3d 682, 687 (7th Cir. 2005). Finally, arbitra-
tion agreements generally are enforceable against non-signa-
tories only in a handful of limited circumstances, depending
on the applicable state law. These limited exceptions are: (1)
assumption, (2) agency, (3) estoppel, (4) veil piercing, and (5)
incorporation by reference. Id.
    These bedrock principles allow us to set forth, in more de-
tailed fashion, particular considerations that must guide our
resolution of the present controversy. Section 2 of the Federal
8                                                     No. 17-1486

Arbitration Act “reflect[s] both a ‘liberal federal policy favor-
ing arbitration’ and the ‘fundamental principle that arbitra-
tion is a matter of contract.’” Concepcion, 563 U.S. at 339 (cita-
tion omitted) (first quoting Moses H. Cone Mem’l Hosp. v. Mer-
cury Constr. Corp., 460 U.S. 1, 24 (1983); then quoting Rent-A-
Center, W., Inc. v. Jackson, 561 U.S. 63, 67 (2010)). It requires
federal courts to “place arbitration agreements on an equal
footing with other contracts and enforce them according to
their terms.” Id. (citation omitted). We will compel arbitration
under the Federal Arbitration Act “if three elements are pre-
sent: (1) an enforceable written agreement to arbitrate, (2) a
dispute within the scope of the arbitration agreement, and (3)
a refusal to arbitrate.” Scheurer, 863 F.3d at 752.
    However, because arbitration agreements are contracts, a
“party ‘cannot be required to submit to arbitration any dis-
pute which he has not agreed so to submit.’” Id. (quoting
United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363
U.S. 574, 582 (1960)). Therefore, the general rule is that
non-signatories are not bound to arbitration agreements. See
Zurich, 417 F.3d at 687. We will enforce an arbitration agree-
ment against a non-signatory if the party seeking to compel
arbitration can show that an exception to this general rule ap-
plies. Id.
    The direct benefits estoppel doctrine applied by the dis-
trict court is one such exception. See id. To determine whether
an exception applies to make “a contract, including an arbi-
tration agreement, … enforceable by or against a non-party,”
we look to “traditional principles of state law.” Scheurer, 863
F.3d at 752 (quoting Arthur Andersen LLP v. Carlisle, 556 U.S.
624, 631 (2009)); see also Warciak v. Subway Rests., Inc., 880 F.3d
No. 17-1486                                                           9

870, 872 (7th Cir. 2018). Here, the cardholder agreement spec-
ifies that Nevada law applies to disputes arising under the
contract, and the parties have not suggested that any other
law is applicable. 6
     From these observations, the analytical framework that we
must follow in our resolution of this matter becomes evident.
We first must determine whether A.D. is bound by the arbi-
tration clause. If she is not, we must determine whether Ne-
vada law nevertheless would bind her under the direct bene-
fits estoppel theory.

                                  B.
   We first examine whether, under ordinary principles of
contract law, A.D. is bound by the arbitration clause.
   Credit One submits that A.D. is bound by the cardholder
agreement as an Authorized User. The cardholder agreement
provides a mechanism for cardholders to designate other in-
dividuals as Authorized Users of their accounts:
       3. AUTHORIZED USER: At your request, we
       may, at our discretion, issue an additional card
       in the name of an Authorized User with your
       credit card account number. If you allow some-
       one to use your Account, that person will be an
       Authorized User. By designating an Authorized

6 Specifically, the cardholder agreement reads: “GOVERNING LAW:
This Agreement is governed by and interpreted in accordance with the
laws applicable to national banks, and, where no such laws apply, by the
laws of the State of Nevada, excluding the conflicts of law provisions
thereof, regardless of your state of residence.” R.78-3 at 7.
10                                                      No. 17-1486

            User who is at least fifteen years of age, you un-
            derstand that: 1) you will be solely responsible
            for the use of your Account and each card is-
            sued on your Account including all charges and
            transactions made by the Authorized User and
            any fees resulting from their actions to the ex-
            tent of the credit limit established for the Ac-
            count; 2) the Authorized User will have access
            to certain account information including bal-
            ance, available credit and payment information.
            … ; 3) we reserve the right to terminate the Card
            Account privileges of an Authorized User by
            closing your Account and issuing you a new ac-
            count number; 4) the Account may appear on
            the credit report of the Authorized User. … ; 5)
            the Authorized User can make payments, report
            the card lost or stolen and remove him or herself
            from the Account; 6) you can request the re-
            moval of the Authorized User from your Ac-
            count via mail or telephone.
            Authorized User Annual Participation Fee: An
            Authorized User Annual Participation Fee of
            $19.00 will be imposed for issuing a card in the
            Authorized User’s name. This Fee will be as-
            sessed annually in the month the Authorized
            User was added to the account.[7]

7   Id. at 4.
No. 17-1486                                                    11

    Notably, by its terms, the arbitration clause specifically ap-
plies to claims “made by anyone connected with” the account
holder, “such as a co-applicant or authorized user” of the ac-
count. 8
   The district court held that because Ms. Serrano told A.D.
to use the credit card to pick up the smoothies, Ms. Serrano
had made her an authorized user of the account. The court
seemingly relied on the language from the cardholder agree-
ment that “[i]f you allow someone to use your Account, that
person will be an Authorized User.” 9
   In our view, the district court’s analysis is difficult to
square with the overall language of the cardholder agree-
ment.
    The cardholder agreement sets forth a specific procedure
that an account holder must follow to add an authorized user
to her account. This provision makes it clear that an individ-
ual does not become an Authorized User simply by using the
credit card to complete the cardholder’s transaction. Rather,
the term clearly foresees an Authorized User as playing a far
more durable role in the account.
   In order to designate a person as an Authorized User, an
account holder must notify Credit One that she wishes to add
an Authorized User to the account, so that Credit One can is-
sue a card in the Authorized User’s name. The Authorized
User has many of the same rights under the cardholder agree-
ment as the account holder and can use the card to complete
her own transactions, not just those of the account holder. The

8   Id. at 8.
9   Id. at 4.
12                                                  No. 17-1486

durability of the arrangement is also made clear by the nine-
teen-dollar fee imposed on the account holder for adding an
Authorized User. Furthermore, and most importantly for
A.D.’s case, the Authorized User must be at least fifteen years
old.
    It is undisputed that neither Ms. Serrano nor Credit One
followed any step of this process. Ms. Serrano did not request
that Credit One add A.D. as an Authorized User. Credit One
did not send A.D. a card with her name on it (and in fact,
Credit One was unaware of A.D.’s relationship to Ms. Serrano
until eighteen months after A.D. filed this action). A.D. did
not have any rights under the cardholder agreement that the
contract gives to true Authorized Users. Credit One never as-
sessed Ms. Serrano the nineteen-dollar annual fee for adding
an Authorized User. Indeed, A.D. was fourteen years old at
the time of the smoothie transaction and, therefore, not even
eligible to become an Authorized User under the cardholder
agreement.
    Although this analysis seems straightforward, we turn to
examine two possible arguments to the contrary. First, the ar-
bitration clause of the cardholder agreement does not capital-
ize “authorized user.” This style might suggest that a differ-
ent meaning should be attributed to the term in the arbitration
clause from the one prescribed for the rest of the contract. Sec-
ondly, Credit One submits that the Authorized User clause
creates more than one category of Authorized User: those
who are Authorized Users because the account holder “al-
low[s] [them] to use [the] Account,” and those who are “at
least fifteen years of age” and subject to all of the rights and
responsibilities identified in the Authorized User provision.
No. 17-1486                                                                  13

    Neither the contract language read as a whole nor the gov-
erning law supports these arguments. Even if we were to ac-
cept, for the sake of argument, that the contract creates multi-
ple categories of Authorized Users (or “authorized users,” as
the arbitration clause reads), and even if someone can become
one kind of authorized user just by using the credit card,
Credit One’s position cannot surmount two major stumbling
blocks. First, as we have noted earlier, it is a fundamental
principle of arbitration law that “a party cannot be required
to submit to arbitration any dispute which he has not agreed
so to submit.” United Steelworkers of Am. v. Warrior & Gulf Nav-
igation Co., 363 U.S. 574, 582 (1960). A.D. simply did not con-
sent to arbitrate with Credit One. More fundamentally, A.D.
did not have legal capacity to enter into a contractual relation-
ship with Credit One. A.D. was a minor at the time of the
smoothie transaction. Under applicable state law, minors lack
capacity to enter into contracts and can disaffirm their obliga-
tions under contracts formed before they reach the age of
eighteen. 10 Moreover, A.D. certainly engaged in an act of dis-
affirmation by filing this lawsuit and asserting her status as a
minor. 11 Assuming, for the sake of argument, that A.D.

10 This is true under the laws of both Nevada (the law governing the card-

holder agreement) and California (the law of A.D.’s residence). See Cal.
Family Code § 6710; Nev. Rev. Stat. § 129.010. See generally Restatement
(Second) of Conflict of Laws § 198 (Am. Law Inst. 1971).
11 Berg v. Traylor, 56 Cal. Rptr. 3d 140, 148 (Cal. Ct. App. 2007) (“No specific

language is required to communicate an intent to disaffirm. ‘A contract
(or conveyance) of a minor may be avoided by any act or declaration dis-
closing an unequivocal intent to repudiate its binding force and effect.’
Express notice to the other party is unnecessary.” (citation omitted) (quot-
ing Spencer v. Collins, 104 P. 320, 322 (Cal. 1909))); W.M. Barnett Bank v.
14                                                            No. 17-1486

formed any kind of contractual relationship with Credit One
before she reached the age of majority, she has disaffirmed
any obligation under that contractual relationship that she
might have had.
    Credit One also argues that A.D. has waived any argu-
ment that she does not qualify as an Authorized User under
the terms of the agreement or that, as a minor, she has a right
to disaffirm the contract. It is true that, at the district court
level, A.D. did not make any specific arguments about the
scope of the authorized user provision of the cardholder
agreement. However, as the party seeking to compel arbitra-
tion, Credit One had the burden of showing that A.D. was
bound by the cardholder agreement as an authorized user. See
Zurich, 466 F.3d at 580 (setting forth elements that a party
seeking to compel arbitration must prove). Credit One only
obliquely made such an argument at the district court
through the conclusory statement in its motion to compel ar-
bitration that because “Ms. Serrano permitted Plaintiff A.D.
to use the card on Plaintiff’s behalf. … Plaintiff became an

Chiatovich, 232 P. 206, 214 (Nev. 1925). In Chiatovich, the Supreme Court of
Nevada held that a defendant had waived the defense of infancy by not
pleading it. “The plea of infancy,” the court held, “is a personal defense,
which, after coming of age, one may or may not interpose. The general
doctrine is that the note of an infant is voidable, not void, and may be
ratified after he comes of age.” Chiatovich, 232 P. at 214. “If the defendant
were of age when sued, his failure to plead his infancy at the time of the
contract would clearly be a waiver and implied ratification.” Id. (internal
quotation marks omitted). Notably, A.D. was still a minor at the time she
filed the lawsuit. This is clear on the face of the complaint. See R.1 at 1
(“Plaintiff A.D., is a minor, age 15 at the time of filing … .”).
No. 17-1486                                                              15

‘Authorized User.’” 12 Credit One cannot rely on waiver when
it was Credit One’s burden to show that A.D. had become an
Authorized User under the cardholder agreement and was
therefore subject to the arbitration clause. 13

                                    C.
    Having concluded that the terms of the cardholder agree-
ment do not bind A.D., we turn to the issue upon which our
colleague in the district court believed that there was some
uncertainty: whether principles of equity and fairness none-
theless require A.D. to arbitrate with Credit One. Nevada has
a strong preference for honoring arbitration agreements, but
it will not enforce an arbitration clause against a non-signa-
tory unless other principles of contract law make it appropri-
ate to do so. Truck Ins. Exch. v. Palmer J. Swanson, Inc., 189 P.3d
656, 659–60 (Nev. 2008). 14 Nevada courts have adopted five

12   R.91 at 10.
13 Finally, we note that our conclusion that the arbitration clause is not
enforceable against A.D. is consistent with the “equal-treatment principle
that applies to arbitration agreements.” Hunt v. Moore Bros., Inc., 861 F.3d
655, 659 (7th Cir. 2017); see also AT&T Mobility LLC v. Concepcion, 563 U.S.
333, 339 (2011). Under that principle, when parties have formed an agree-
ment to arbitrate, we must place that arbitration agreement on equal foot-
ing with other contracts. For the reasons we have discussed, however,
A.D. does not have a contractual relationship of any kind with Credit One.
14 As we have discussed, under the cardholder agreement’s choice-of-law
clause, Nevada law governs the interpretation of the cardholder agree-
ment. Credit One maintains that the choice-of-law clause also governs the
direct benefits estoppel analysis. See Appellee’s Br. 16. The district court
applied federal law to the estoppel analysis. As we recently clarified in
16                                                             No. 17-1486

“theories for binding nonsignatories to arbitration agree-
ments: 1) incorporation by reference; 2) assumption; 3)
agency; 4) veil-piercing/alter ego; and 5) estoppel.” Id. at 660
(quoting Thomson-CSF, S.A. v. Am. Arbitration Ass’n, 64 F.3d
773, 776 (2d Cir. 1995)). Credit One urges that principles of
equitable estoppel require that A.D. be bound to this arbitra-
tion agreement despite her age.

Scheurer v. Fromm Family Foods LLC, the question whether a party is equi-
tably estopped from denying the application of an arbitration clause is a
question of state contract law. 863 F.3d 748, 752–53 (7th Cir. 2017). We al-
ready have concluded that A.D. is not a party to the cardholder agree-
ment, and generally, choice-of-law clauses in contracts do not apply to
non-parties. Cf. Stromberg Metal Works, Inc. v. Press Mech., Inc., 77 F.3d 928,
933 (7th Cir. 1996) (stating that “[e]ven the strongest language choosing
[another state’s] law for purposes of interpreting the subcontracts would
not necessarily bind” non-parties to the contract because “they did not sign
the contracts”). Notably, “A.D. does not concede that Nevada law applies,
because only if there is a valid contract can the choice of law provision in
the agreement become effective.” Reply Br. 7–8. However, A.D. does not
otherwise meaningfully challenge the application of Nevada law in her
reply to Credit One’s contention; she does not offer another state’s law as
a viable option; and she does not propose that we engage in a
choice-of-law analysis to determine which state’s law to apply. Therefore,
we consider her to have waived the issue and will apply Nevada law. Cf.
LAK, Inc. v. Deer Creek Enters., 976 F.2d 328, 331 (7th Cir. 1992) (“While we
are not bound by the parties’ choice of law, no party has challenged the
application of Florida’s substantive law. Thus, we proceed accordingly.”).
In any event, as we note in the text, Nevada has followed general common
law principles of equitable estoppel.
No. 17-1486                                                  17

                               1.
    Estoppel is an equitable doctrine that prevents a non-sig-
natory “from refusing to comply with an arbitration clause
‘when it receives a “direct benefit” from a contract containing
an arbitration clause.’” Id. at 661 (quoting Int’l Paper Co. v.
Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411, 418
(4th Cir. 2000)). Credit One maintains that A.D. directly bene-
fited under the cardholder agreement because Ms. Serrano
asked her to make purchases with the card. According to
Credit One, “A.D. obtained the same type of contractual ben-
efit as Serrano,” which is the ability to use the credit card to
make purchases. 15 But any “benefit” that A.D. received with
respect to the credit card was limited to following her
mother’s directions to pick up the smoothies that her mother
had ordered previously. This limited direction derived from
the mother-daughter relationship. A.D. had no relationship,
contractual or otherwise, with Credit One. She derived no di-
rect benefit from the cardholder agreement. Her mother, not
A.D., benefited from the agreement, which allowed her, not
A.D., to buy the smoothies. Credit One’s position that A.D.
directly benefited under the cardholder agreement and is
therefore estopped from denying the application of the arbi-
tration clause simply misapprehends the purpose and scope
of the direct benefits estoppel remedy.

                               2.
    An estoppel theory also can be premised on the character
of the non-signatory’s claim. When a non-signatory plaintiff’s

15   Appellee’s Br. 18.
18                                                   No. 17-1486

“case center[s] on its asserted rights under the … contract”
containing the arbitration clause, the non-signatory is bound
by the arbitration clause. Id. at 661; see also Int’l Paper Co. v.
Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411, 417
(4th Cir. 2000) (“In the arbitration context, the doctrine recog-
nizes that a party may be estopped from asserting that the
lack of his signature on a written contract precludes enforce-
ment of the contract’s arbitration clause when he has consist-
ently maintained that other provisions of the same contract
should be enforced to benefit him.”).
    Credit One attempts to characterize A.D.’s straightfor-
ward TCPA claim as a claim seeking benefits under the card-
holder agreement. Its argument is a convoluted and unper-
suasive one. It points out that the TCPA does not apply to au-
todialed phone calls that are made with the called party’s
“prior express consent.” 47 U.S.C. § 227(b)(1)(A). Whether
A.D. consented to the calls, Credit One continues, depends on
the terms of the cardholder agreement. Therefore, according
to Credit One, because it has raised consent as an affirmative
defense to A.D.’s TCPA claims, A.D.’s suit is one brought un-
der the cardholder agreement.
    The mere statement of this argument reveals its lack of co-
gency. As a party to the cardholder agreement, Ms. Serrano
consented to phone calls from Credit One. Credit One’s af-
firmative defense thus depends on whether Ms. Serrano’s
consent under the cardholder agreement can be imputed to
A.D. According to Credit One, this question of contract inter-
pretation transforms A.D.’s TCPA claim into one that relies
on the cardholder agreement such that A.D. should be es-
topped from denying the application of the arbitration clause
in her TCPA claim.
No. 17-1486                                                         19

    Consent is an affirmative defense under the TCPA, an af-
firmative defense that Credit One must establish. Blow v. Bi-
jora, Inc., 855 F.3d 793, 803 (7th Cir. 2017). It is not part of
A.D.’s case. A.D. does not have to prove that she did not con-
sent to the calls in order to succeed on her TCPA claims.
Credit One’s argument is entirely without merit. 16
    In her underlying TCPA action, A.D. has asserted no right
under the cardholder agreement. Her action is under a com-
pletely separate statute protecting her from harassing phone
calls. This is the “core” of her case. E.I. DuPont de Nemours &
Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d
187, 201 (3d Cir. 2001). In no way can her cause of action be
considered premised on the cardholder agreement. If we were
to hold A.D. amenable to the cardholder agreement arbitra-
tion clause simply because, as a matter of affirmative defense
in the present action, Credit One might argue that Ms. Serrano
consented to the calls when she signed that agreement, we
would “threaten to overwhelm the fundamental premise that
a party cannot be compelled to arbitrate a matter without its
agreement.” Bridas S.A.P.I.C. v. Gov’t of Turkmenistan, 345 F.3d
347, 361 (5th Cir. 2003).

16This appeal does not give us an occasion to address the merits of the
underlying case.
20                                                          No. 17-1486

                              Conclusion
   For the reasons set forth in the foregoing opinion, we re-
verse the judgment of the district court and remand for fur-
ther proceedings. 17 A.D. may recover the costs of this appeal.

                                     REVERSED and REMANDED

17 Because we conclude that the arbitration clause, including its class ac-
tion waiver, does not apply to A.D., our remand permits the district court
to reconsider its denial of A.D.’s motion for class certification.