DONALD WHITE, On behalf of himself and all others similarly situated
SUNOCO, INC., Appellant
Argued: January 24, 2017
Appeal from the United States District Court for the Eastern
District of Pennsylvania (D.C. No. 2:15-cv-04595) District
Judge: Honorable Paul S. Diamond
C. Duffy (ARGUED) Kathryn E. Deal Meredith C. Slawe Katherine
L. Villanueva Drinker Biddle & Reath 18th & Cherry
Streets Counsel for Appellant
J. Stanoch (ARGUED) Richard M. Golomb Ruben Honik Kenneth J.
Grunfeld Golomb & HonikCounsel for Appellee
Before: CHAGARES, RESTREPO, and ROTH, Circuit Judges.
CHAGARES, Circuit Judge.
Inc. appeals from the District Court's denial of its
motion to compel arbitration, arguing that Donald White, who
brought this lawsuit against Sunoco alleging fraud on behalf
of a putative class, must arbitrate his claims pursuant to a
credit card agreement that White signed with a third party
who is not named in the lawsuit. At issue in this appeal is
whether Sunoco, a non-signatory to the credit card agreement
and who is not mentioned in the agreement, can compel White
to arbitrate. After examining the relevant state law and
applying it to the facts here, we will affirm the District
Sunoco is a Pennsylvania corporation that markets and sells
gasoline through approximately 4, 900 retail operations in 26
states. This lawsuit involves the "Sunoco Rewards
Program, " which Sunoco advertised through various
promotional materials. The Sunoco Rewards Program offered
customers who buy gas at Sunoco locations using a
Citibank-issued credit card (the "Sunoco Rewards
Card") a 5-cent per gallon discount either at the pump
or on their monthly billing statements. The promotional
materials included a "Terms and Conditions of
Offer" sheet, indicating that Citibank, N.A. is the
issuer of the Sunoco Rewards Card. Joint Appendix
("J.A.") 45, 52. They also stated that approval for
the card was dependent on meeting Citibank's
creditworthiness criteria and that by applying for the card,
the applicant authorized Citibank to "share with
Sunoco® and its affiliates experiential and transactional
information regarding your activity with us." J.A. 52.
Finally, the promotion explained, "When you become a
cardmember, you will receive the full Sunoco Rewards Card
Program Terms and Conditions, which may change at any time
for any reason upon thirty (30) days prior written
notice." Id. Although Sunoco and White disagree
as to whether Sunoco and Citibank jointly marketed the credit
card, it is undisputed that Sunoco was not a corporate
affiliate of and had no ownership interest in Citibank and
White is a Florida resident who applied for and obtained a
Sunoco Rewards Card from Citibank in 2013. He made fuel
purchases with the card at various Sunoco-branded gas station
locations. White alleges that "[c]ontrary to its clear
and express representations, Sunoco does not apply a
5¢/gallon discount on all fuel purchases made by
cardholders at every Sunoco location. Sunoco omits this
material information to induce customers to sign-up for the
Sunoco Rewards Credit Card so they frequent Sunoco
locations." J.A. 31. White avers that but for the
representations regarding the 5-cent per gallon discount, he
"would not have become [a] Sunoco Credit Card
cardholder and/or would have purchased gasoline at cheaper
prices and/or elsewhere." J.A. 37. He brings claims of
fraud and fraudulent inducement, negligent misrepresentation,
unjust enrichment, and violation of the Florida Deceptive and
Unfair Trade Practices Act. White's claims are against
Sunoco only, and he alleges no misconduct by
Sunoco Rewards Card is governed by a Card Agreement, which he
received when he first obtained the card from Citibank and
again when he requested additional copies of the agreement
from Citibank on April 30, 2014 and June 1, 2015. The Card
Agreement explicitly states that "we, us, and our mean
Citibank, N.A., the issuer of your account" and that
"you, your, and yours mean the person who applied to
open this account." J.A. 88.
undisputed that Sunoco is not a signatory to the Card
Agreement, to which White and Citibank are the only parties.
The Card Agreement does not mention the word
"Sunoco"; it also makes no mention of the 5-cent
per gallon discount. However, the account statements mailed
to White bear the Sunoco logo and include e-mail and mailing
information for Sunoco. The Card Agreement also contains a
"Governing Law and Enforcing Our Rights" section
that states that the "terms and enforcement" of the
agreement are governed by "[f]ederal law and the law of
South Dakota, where [Citibank is] located." J.A. 92.
filed a motion to compel arbitration based on the arbitration
clause contained in the Card Agreement. The arbitration
clause provides in relevant part,
PLEASE READ THIS PROVISION OF THE AGREEMENT
CAREFULLY. IT PROVIDES THAT ANY DISPUTE MAY BE RESOLVED
BY BINDING ARBITRATION. ARBITRATION REPLACES THE RIGHT TO GO
TO COURT, INCLUDING THE RIGHT TO A JURY AND THE RIGHT TO
INITIATE OR PARTICIPATE IN A CLASS ACTION OR SIMILAR
PROCEEDING. IN ARBITRATION, A DISPUTE IS RESOLVED BY AN
ARBITRATOR INSTEAD OF A JUDGE OR JURY. ARBITRATION PROCEDURES
ARE SIMPLER AND MORE LIMITED THAN COURT PROCEDURES.
Agreement to Arbitrate: Either you or we may, without the
other's consent, elect mandatory, binding arbitration for
any claim, dispute, or controversy between you and us (called
J.A. 91. The arbitration clause also defined the claims that
are subject to arbitration as those "relating to your
account, a prior related account, or our relationship . . .
including Claims regarding the application, enforceability,
or interpretation of this Agreement and this arbitration
provision." Id. The provision adds that
relevant claims are subject to arbitration "no matter
what legal theory they are based on or what remedy . . . they
seek." Id. Finally, a paragraph titled
"Whose Claims are subject to arbitration?" states,
"[n]ot only ours and yours, but also claims made by or
against anyone connected with us or you or claiming through
us or you, such as a co-applicant or authorized user of your
account, an employee, agent, representative, affiliated
company, predecessor or successor, heir, assignee, or trustee
in bankruptcy" are subject to arbitration. Id.
The arbitration provision also sets forth the steps for
invoking arbitration: "At any time you or we may ask an
appropriate court to compel arbitration of Claims, or to stay
the litigation of Claims pending arbitration, even if such
Claims are part of a lawsuit, unless a trial has begun or a
final judgment has been entered." Id.
District Court denied Sunoco's motion to compel
arbitration. The court began its analysis by noting that
"traditional principles of state law allow a contract to
be enforced by or against nonparties to the contract"
and that such principles apply to arbitration agreements.
J.A. 11 (quoting Griswold v. Coventry First LLC, 762
F.3d 264, 271 (3d Cir. 2014)). It determined that it would
apply Third Circuit authority on compelling arbitration,
explaining that neither party raised choice-of-law issues,
and that it believed the outcome would be the same regardless
of which law the court applied.
the arbitration provision itself, the District Court observed
that there was no dispute as to the validity of the provision
and that the provision could only be enforced by signatories
to it unless contract, agency, or estoppel principles
dictated otherwise. The District Court examined all three and
determined that none applied. It concluded that as to
contract and agency law, Sunoco was not a third-party
beneficiary of the Cardholder Agreement and its arbitration
provision, and that Sunoco was not an agent, owner, or
subsidiary of Citibank or vice versa. As to estoppel, the
District Court concluded that the two-part "alternative
estoppel" test discussed in E.I. DuPont de Nemours
& Co. v. Rhone Poulenc Fiber & Resin Intermediates,
S.A.S., 269 F.3d 187 (3d Cir. 2001), was not met because
1) there was no close relationship between Sunoco and
Citibank, and 2) the claims alleged against Sunoco did not
relate to the terms or obligations in the Cardholder
Agreement. Finally, the District Court rejected Sunoco's
argument that because White had benefitted from the
Cardholder Agreement, he should be estopped from bypassing
its arbitration clause in this suit. The District Court
reasoned that because a dispute that arises under the
Cardholder Agreement is distinct from any dispute arising
from a separate agreement with Sunoco, the estoppel principle
does not apply to White.
District Court had jurisdiction pursuant to 28 U.S.C. §
1332(d). Our appellate jurisdiction over the District
Court's denial of Sunoco's motion to compel
arbitration derives from 28 U.S.C. § 1291 and the
Federal Arbitration Act ("FAA"), 9 U.S.C. §
16(a)(1)(B). See Griswold, 762 F.3d at 268. "We
exercise plenary review over the District Court's order
on a motion to compel arbitration." Flintkote Co. v.
Aviva PLC, 769 F.3d 215, 219 (3d Cir. 2014). We use the
standard for summary judgment under Federal Rule of Civil
Procedure 56(a) when reviewing the underlying motion
"because the district court's order compelling
arbitration is in effect a summary disposition of the issue
of whether or not there had been a meeting of the minds on
the agreement to arbitrate." Id. (quoting
Century Indem. Co. v. Certain Underwriters at
Lloyd's, London, 584 F.3d 513, 528 (3d Cir. 2009)).
Thus, a motion to compel arbitration should only be granted
if there is no genuine dispute as to any material fact and,
after viewing facts and drawing inferences in favor of the
non-moving party, the party moving to compel is entitled to
judgment as a matter of law. Id. We note that under
the FAA, "the presumption of arbitrability applies only
where an arbitration agreement is ambiguous about whether it
covers the dispute at hand. Otherwise, the plain language of
the contract holds." CardioNet, Inc. v. Cigna Health
Corp., 751 F.3d 165, 173 (3d Cir. 2014) (citation
issue in this case is whether Sunoco, as a non-signatory to
the Card Agreement and its arbitration clause, can compel
White to arbitrate. The Supreme Court explained in Arthur
Andersen LLP v. Carlisle that "'traditional
principles' of state law allow a contract to be enforced
by or against nonparties through 'assumption, piercing
the corporate veil, alter ego, incorporation by reference,
third-party beneficiary theories, waiver and
estoppel.'" 556 U.S. 624, 631 (2009) (quoting 21 R.
Lord, Williston on Contracts § 57:19 (4th ed. 2001));
see also Crawford Prof'l Drugs, Inc. v. CVS Caremark
Corp., 748 F.3d 249, 261-62 (5th Cir. 2014)
("[P]rior decisions allowing non-signatories to compel
arbitration based on federal common law, rather than state
contract law . . . have been modified to conform with
argues that equitable estoppel prevents White from refusing
arbitration against it as a non-signatory. The Arthur
Andersen Court held that a non-party to an arbitration
agreement may invoke section 3 of the FAA for a stay in
federal court if the relevant state law allows a
non-signatory to enforce the arbitration agreement against a
signatory. 556 U.S. at 632.
choose which state law will apply, "a federal court
sitting in diversity must apply the choice-of-law rules of
the forum state." LeJeune v. Bliss-Salem, Inc.,
85 F.3d 1069, 1071 (3d Cir. 1996) (citing Klaxon Co. v.
Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)). The
forum state is Pennsylvania because the action was brought in
the Eastern District of Pennsylvania. However, neither Sunoco
nor White argued in their briefs which state's law
regarding equitable estoppel should apply under Pennsylvania
choice-of-law provisions. At oral argument, they did agree
that Pennsylvania law does not apply. Sunoco's attorney took
the position that South Dakota law applies, while White's
attorney stated that Florida law applies. Oral Arg. Tr.
11:40-45; 23:10-26. Under Pennsylvania's choice-of-law
analysis, we examine whether "the laws of the two
jurisdictions would produce the same result on the particular
issue presented." Berg Chilling Sys., Inc. v. Hull
Corp., 435 F.3d 455, 462 (3d Cir. 2006). If the results
would be the same, there is no actual conflict and we
"should avoid the choice-of-law question."
Id. We thus examine whether the laws of Florida and
South Dakota regarding equitable estoppel would produce the
same result in this case. We conclude that they do.
South Dakota law, a signatory can be forced to arbitrate
against a non-signatory under principles of equitable
estoppel in either of two circumstances. The first is when
"all the claims against the nonsignatory defendants are
based on alleged substantially interdependent and concerted
misconduct by both the nonsignatories and one or more of the
signatories to the contract." Rossi Fine Jewelers,
Inc. v. Gunderson, 648 N.W.2d 812, 815 (S.D. 2002)
(citing MS Dealer Serv. Corp. v. Franklin, 177 F.3d
942, 947 (11th Cir. 1999)). The reasoning behind this rule is
that plaintiffs should not be able to "avoid the
arbitration for which [they] had contracted simply by adding
a nonsignatory defendant." Id. (alteration in
original) (quoting Cosmotek Mumessillik Ve Ticaret Ltd.
Sirkketi v. Cosmotek USA, Inc., 942 F.Supp. 757, 759 (D.
Conn. 1996)). Second, a signatory can also be compelled to
arbitrate against a non-signatory under South Dakota law when
it asserts "claims arising out of agreements against
nonsignatories to those agreements without allowing those
defendants also to invoke the arbitration clause contained in
the agreements." Id. (alterations omitted)
(quoting A.L. Williams & Assocs., Inc. v.
McMahon, 697 F.Supp. 488, 494 (N.D.Ga. 1988)); see
also MS Dealer, 177 F.3d at 947. In other words, a
plaintiff-signatory cannot have his cake (use the agreement
against the non-signatory) and eat it too (avoid enforcement
of the arbitration clause within the agreement).
the Florida Supreme Court has not opined on equitable
estoppel in the arbitration enforcement context, we
"predict how it would rule if faced with the
issue." Spence v. ESAB Grp., Inc., 623 F.3d
212, 216 (3d Cir. 2010). We look to "'decisions of
intermediate appellate courts, of federal courts interpreting
that state's law, and of other state supreme courts that
addressed the issue, ' as well as to 'analogous
decisions, considered dicta, scholarly works, and any other
reliable data tending convincingly to show how the highest
court in the state would decide the issue at hand.'"
Id. at 216- 17 (quoting Norfolk S. Ry. Co. v.
Basell USA Inc., 512 F.3d 86, 92 (3d Cir. 2008)). We are
convinced that the Florida Supreme Court would adopt the same
rules as South Dakota, as three of the five intermediate
state appellate courts in Florida have had occasion to review
the issue and adopted the same rules. See Heller v. Blue
Aerospace, LLC, 112 So.3d 635, 637 (Fla. 4th Dist. Ct.
App. 2013); Perdido Key Island Resort Dev., L.L.P. v.
Regions Bank, 102 So.3d 1, 6 (Fla. 1st Dist. Ct. App.
2012); Armas v. Prudential Sec., Inc., 842 So.2d
210, 212 (Fla. 3d Dist. Ct. App. 2003).
non-signatory may enforce an arbitration clause against a
signatory under Florida law in either of two circumstances.
First, "[e]quitable estoppel is warranted when the
signatory to the contract containing the arbitration clause
raises allegations of concerted conduct by both the
non-signatory and one or more of the signatories to the
contract." Armas, 842 So.2d at 212 (adopting
the rule set forth in MS Dealer, 177 F.3d at 947, as
the South Dakota Supreme Court had done); see also
Perdido, 102 So.3d at 6; Heller, 112 So.3d at
637. Second, a plaintiff may be "equitably estopped from
avoiding arbitration with [a non-signatory defendant] when
the claims stem from the same contractual obligation as [the
plaintiff] is relying on . . . ." Armas, 842
So.2d at 212. The rationale behind this rule is to
"prevent a plaintiff from relying on a contract when it
works to his advantage and repudiating it when it works to
his disadvantage by requiring arbitration." Id.
(citing In re Humana Inc. Managed Care Litig., 285
F.3d 971 (11th Cir. 2002)).
summarize: both South Dakota and Florida courts would apply
the doctrine of equitable estoppel to prevent a signatory
from avoiding arbitration against a non-signatory in two
circumstances. First, if a plaintiff-signatory alleges
concerted conduct on the part of both the non-signatory and
another signatory, that plaintiff may be equitably estopped
from avoiding arbitration with the non-signatory. Second, if
a plaintiff-signatory asserts a claim against a defendant
based on an agreement, that plaintiff may be equitably
estopped from avoiding arbitration on the basis that the
defendant was not a signatory to that same agreement. Neither
circumstance is applicable in this case.
that White cannot be forced to arbitrate under principles of
equitable estoppel under either South Dakota or Florida law.
First, there is no alleged "concerted conduct" or
misconduct on the part of Sunoco and Citibank. See
Armas, 842 So.2d at 212; Rossi, 648 N.W.2d at
815. While Sunoco contends that White strategically withheld
allegations against Citibank, and that the "[p]laintiff
artfully pleaded his claim to assert a fraudulent inducement
theory against Sunoco alone" in order to connect the
claims against Sunoco to the Cardholder Agreement, Sunoco Br.
34, 43-45, such assertions are unfounded. We decline to
speculate as to whether White has some related grievance
against Citibank and to compel White to arbitrate based on
that speculation. Further, there is nothing in the record to
suggest that Citibank engaged in any concerted misconduct
with Sunoco regarding the 5-cent per gallon discount.
Sunoco's suggestion that Citibank's participation in
approving card applications and calculating statement credits
somehow constitutes concerted misconduct is also unfounded.
Moreover, the fact that Citibank provided credits to White
after he complained does not establish concerted misconduct
between Citibank and Sunoco.
disagree with Sunoco's characterization of this case as
akin to one alleging that the entire Card Agreement,
including the arbitration agreement, is the product of fraud.
See Sunoco Br. 34 (citing Merritt-Chapman &
Scott Corp. v. Pa. Turnpike Comm'n, 387 F.2d 768,
771 (3d Cir. 1967)). This is not the case here because White
is not launching a "general attack on a contract for
fraud" or arguing that "if fraud is proven[, ] the
entire contract, including the arbitration provision, would
fall." Merritt-Chapman, 387 F.2d at 771.
White's claims against Sunoco do not impinge on the
integrity of the Card Agreement ...