           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                   Fifth Circuit

                                                                            FILED
                                                                         February 7, 2008

                                     No. 07-20325                     Charles R. Fulbruge III
                                   Summary Calendar                           Clerk


DANIEL H STINGER

                                                  Plaintiff-Appellant
v.

CHASE BANK, USA, NA; JP MORGAN CHASE BANK, NA

                                                  Defendants-Appellees



                   Appeal from the United States District Court
                        for the Southern District of Texas
                             USDC No. 4:06-CV-1702



Before JOLLY, PRADO, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
       Plaintiff-Appellant Daniel H. Stinger (“Stinger”) appeals the district
court’s grant of a motion by Defendants-Appellees Chase Bank USA, N.A.
(“Chase”) and JPMorgan Chase Bank, N.A. (“JPMC”) to compel arbitration of a
credit card dispute. For the following reasons, we AFFIRM the judgment of the
district court.



       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
                                   No. 07-20325

            I. FACTUAL AND PROCEDURAL BACKGROUND
      Stinger has two Chase credit card accounts: (1) a MasterCard account he
opened with Chase on February 18, 2003, and (2) a Visa account he opened with
Bank One on November 2, 2004, ownership of which was transferred to Chase
shortly after the account became active.1 Chase Segment Senior Director Donna
Barrett (“Barrett”) stated in an affidavit that she had reviewed Chase’s records
related to Stinger’s accounts and that when Chase sent Stinger his credit card
for each account, it also sent him a Cardmember Agreement (“CMA”) that
established the terms of each account. Each CMA provided that it would become
effective when the cardholder used the card, and it is undisputed that Stinger
used both cards. Stinger stated in an affidavit that he has never seen the CMAs
and has not agreed to be bound by them.
      Each CMA contains an arbitration provision. The MasterCard arbitration
provision states, in part,
      Any claim or dispute (“Claim”, which term may refer to more than
      one claim as is appropriate for the context in which it is used) by
      either you or us against the other, or against the employees, agents,
      or assigns of the other arising from or relating in any way to the
      Cardmember Agreement, any prior Cardmember Agreement, your
      credit card Account, or the advertising application, or approval of
      your Account will, at the election of either you or us, be resolved by
      binding arbitration. This Arbitration Agreement governs all
      Claims, whether such Claims are based on law, statute, contract,
      regulation, ordinance, tort, common law, constitutional provision, or
      any legal or equitable ground and whether such Claims seek as
      remedies money damages, penalties, injunctions, or declaratory or
      equitable relief. Claims subject to this Arbitration Agreement
      include Claims regarding the applicability of this Arbitration
      Agreement or any prior Cardmember Agreement. As used in this
      Arbitration Agreement, the term “Claim” is to be given the broadest
      possible meaning.


      1
       Shortly after Stinger’s account became active, Bank One Corporation merged with
JPMC, which led to a transfer of ownership of Stinger’s account to Chase.

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The MasterCard CMA also provides, however, that certain claims seeking up to
$25,000 “may be resolved by litigation” and are “not subject to arbitration.”
      The VISA CMA’s arbitration provision states,
      Either you or we may, without the other’s consent, elect mandatory,
      binding, arbitration of any claim, dispute or controversy by either
      you or us against the other, or against the employees, parents,
      subsidiaries, affiliates, beneficiaries, agents or assigns of the other,
      arising from or relating in any way to the [CMA], any prior [CMA],
      your credit card Account or the advertising, application, or approval
      of your Account (“Claim”). This Arbitration Agreement governs all
      Claims, whether such Claims are based on law, statute, contract,
      regulation, ordinance, tort, common law, constitutional provision, or
      any legal theory of law such as respondent superior, or any other
      legal or equitable ground and whether such Claims seek as remedies
      money damages, penalties, injunctions, or declaratory or equitable
      relief. Claims subject to this Arbitration Agreement include Claims
      regarding the applicability of this Arbitration Agreement or the
      validity of the entire [CMA] or any prior [CMA]. This Arbitration
      Agreement includes Claims that arose in the past, or arise in the
      present or the future. As used in this Arbitration Agreement, the
      term Claim is to be given the broadest possible meaning.

The Visa CMA also contains an exception to the arbitration agreement for claims
brought in small claims court.
      The MasterCard CMA provided that Chase could amend it at any time.
In September 2003, Chase sent Stinger a notification of amendments to the
CMA, including some that altered the allocation of arbitration costs. The
notification provided that the changes would become effective unless Stinger
objected in writing by October 25, 2003. Barrett stated that it was Chase’s
routine practice to note in a cardmember’s account when mail was returned or
the cardmember sent correspondence and that Chase’s records do not reflect that
the notification was returned or that Stinger notified Chase of his refusal to
accept the change in terms. Stinger continued to use the MasterCard after the
effective date of the amendments.


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           In April 2006, Stinger filed a petition in Texas state court asserting
several claims against Chase and JPMC.2 These claims related to his allegation
that in July 2005, Chase reduced Stinger’s credit limits on both cards, which led
it to dishonor a credit card courtesy check Stinger had written and attempted to
deposit in his checking account. Chase removed the action to federal court on
the basis of diversity of citizenship and filed a motion to compel arbitration of
Stinger’s claims. The district court granted the motion, and Stinger appeals. We
have jurisdiction over this appeal pursuant to 9 U.S.C. § 16(a)(3).
                                    II. DISCUSSION
       We review an order compelling arbitration de novo. Paper, Allied-Indus.
Chem. & Energy Workers Int’l Union Local No. 4-2001 v. ExxonMobil Ref. &
Supply Co., 449 F.3d 616, 619 (5th Cir. 2006). We review factual findings for
clear error. Cal. Fina Group, Inc. v. Herrin, 379 F.3d 311, 315 (5th Cir. 2004).
       The Federal Arbitration Act (“FAA”) provides that a “written provision
in . . . a contract evidencing a transaction involving commerce to settle by
arbitration a controversy thereafter arising out of such contract . . . shall be
valid, irrevocable, and enforceable.” 9 U.S.C. § 2. In evaluating a motion to
compel arbitration, we must first determine “whether the parties agreed to
arbitrate the dispute in question.” Tittle v. Enron Corp., 463 F.3d 410, 418 (5th
Cir. 2006) (internal quotation marks omitted). This determination requires
examination of two questions: “(1) whether there is a valid agreement to
arbitrate between the parties; and (2) whether the dispute in question falls
within the scope of that arbitration agreement.” Id. (internal quotation marks
omitted).      To address these questions, “courts generally . . . should apply



       2
          Stinger asserted claims for breach of the covenant of good faith and fair dealing;
tortious interference with his contract with Bank of America; violation of the Texas Deceptive
Trade Practices Act, TEX. BUS. & COM. CODE ANN. § 17.46; breach of contract; conversion;
fraud and negligent misrepresentation; economic duress; and breach of fiduciary responsibility.

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                                     No. 07-20325

ordinary state-law principles that govern the formation of contracts.” First
Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995).3                However,
“ambiguities as to the scope of the arbitration clause itself [are] resolved in favor
of arbitration.” Volt Info. Sci., Inc. v. Bd. of Trustees of Leland Stanford Jr.
Univ., 489 U.S. 468, 475-76 (1989). Finally, we determine “whether legal
constraints external to the parties’ agreement foreclosed the arbitration of those
claims.” Tittle, 463 F.3d at 418 (internal quotation marks omitted).
A.    Existence and scope of the arbitration agreements
      First, Stinger argues that no valid agreement to arbitrate existed between
him and Chase because he never received the CMAs. Given that Stinger’s only
evidence was his own unsupported statement that he had not received either
CMA, the district court did not commit clear error when it decided to credit
Barrett’s statement that Chase did send Stinger the CMAs along with his credit
cards. Cf. Wells Fargo Bus. Credit v. Ben Kozloff, Inc., 695 F.2d 940, 944 (5th
Cir. 1982) (noting that a properly mailed letter may be presumed to have been
received). It is undisputed that both CMAs provided they would become effective
upon use of the cards and that Stinger used both cards. Under ordinary contract
principles, a party may be bound by an agreement even in the absence of a
signature, provided that the actions of the parties reflect a mutual intent to be
bound. See Valero Ref. Inc. v. M/T Lauberborn, 813 F.2d 60, 64 (5th Cir. 1987);
Haws & Garrett Gen. Contractors, Inc. v. Gorbett Bros. Welding Co., 480 S.W.2d
607, 609-10 (Tex. 1972). By using the cards, Stinger demonstrated an intent to
be bound by the terms of the CMAs and thus agreed to the arbitration provisions
in the CMAs.
      Second, Stinger suggests that the district court should not have ordered
arbitration because the arbitration provisions in the CMA apply only to claims

      3
        The parties apparently do not dispute that Texas law applies to determine whether
a contract was formed in this case.

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                                    No. 07-20325

exceeding $25,000, and the district court did not inquire into whether Stinger’s
claims exceeded $25,000. This argument is without merit. In his complaint,
Stinger did not specify the amount of relief he sought.        However, Chase
convincingly demonstrated in its Statement of Basis for Removal that the value
of Stinger’s claims was well over $75,000. Stinger has made no argument, either
before this court or at the district court level, that he is seeking less than
$25,000. Therefore, the district court properly applied the arbitration provision
to his claims. We also note that Stinger’s claims are clearly within the scope of
both CMAs’ broad arbitration clauses, which include claims “relating in any
way” to his credit card accounts.
      Third, Stinger argues that he need not arbitrate his claims against JPMC
because JPMC was not a signatory to either CMA. However, a non-signatory to
a contract with an arbitration clause can compel arbitration under an equitable
estoppel theory where the claim against the non-signatory is dependent upon the
contract containing the arbitration clause. Grigson v. Creative Artists Agency,
L.L.C., 210 F.3d 524, 527-28 (5th Cir. 2000). Moreover, “whether to utilize
equitable estoppel in this fashion is within the district court’s discretion; we
review to determine only when it has been abused.” Id. at 528. Because
Stinger’s claims against JPMC relate to his credit card issuer’s obligations to
him, those claims are dependent upon the contracts he entered into with Chase
regarding the cards. Thus, the district court did not abuse its discretion by
requiring Stinger to arbitrate his claims against JPMC.
      In sum, the district court properly concluded that an arbitration
agreement existed and that the agreement covers Stinger’s claims.
B.    Unconscionability of the arbitration agreements
      Stinger contends that even if he agreed to the terms of the CMAs, they and
the arbitration agreements in them are unconscionable. Whether the contract
as a whole is unconscionable must be determined through arbitration. See

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Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 449 (2006) (stating that
“a challenge to the validity [of a contract] as a whole, and not specifically to the
arbitration clause, must go to the arbitrator”); Overstreet v. Contigroup Cos.,
462 F.3d 409, 411 n.1 (5th Cir. 2006) (declining to address whether a contract as
a whole was unconscionable because “federal courts are limited to reviewing the
arbitration clause itself”). Thus, we will decide only whether the arbitration
clauses are unconscionable.
       To determine what state’s law applies to the question of unconscionability,
we use Delaware law, pursuant to the choice of law provisions in the CMAs.4 See
Overstreet, 462 F.3d at 411-12 (applying a choice of law provision to determine
the law governing the unconscionability of an arbitration clause in a case where
both the arbitration clause and the agreement as a whole were attacked as
unconscionable); DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 677-78 (Tex.
1990) (holding that under Texas choice of law principles, contractual choice of
law provisions are generally upheld).              Under Delaware law, a contract is
unconscionable if it is “such as no man in his senses and not under delusion
would make on the one hand, and as no honest or fair man would accept, on the
other.” Tulowitzki v. Atl. Richfield Co., 396 A.2d 956, 960 (Del. 1978) (internal
quotation marks omitted). “[M]ere disparity between the bargaining power of
parties to a contract will not support a finding of unconscionability.” Graham
v. State Farm Mut. Auto. Ins. Co., 565 A.2d 908, 912 (Del. 1989). Rather, “[a]
court must find that the party with superior bargaining power used it to take
advantage of his weaker counterpart.                    For a contract clause to be




       4
        Stinger does not address the issue of choice of law in his brief. However, he cites only
cases applying California law. Given that Stinger is a Texas resident, Chase is a Delaware
bank, JPMC is an Ohio bank, the contract provides for Delaware law, and Stinger offers no
rationale for using California law, we decline to use California law to resolve this dispute.

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                                       No. 07-20325

unconscionable, its terms must be so one-sided as to be oppressive.”                       Id.
(internal quotation marks omitted).
       Stinger contends that the arbitration provisions are unconscionable
because (1) they are contracts of adhesion imposed by a party with superior
bargaining power; (2) he had no meaningful choice about whether to accept them
because all credit cards contain similar provisions and he is a business traveler
who needs a credit card; and (3) Chase’s amendment of the arbitration
agreements by enclosing new terms along with his credit card bills constituted
unfair surprise. However, the cases Stinger cites in support of his argument are
neither binding on this court nor factually similar to this case,5 and Stinger’s
arguments are without merit under Delaware law.
       First, as noted above, the fact that Chase had superior bargaining power
cannot establish unconscionability unless the contract contains oppressive, one-
sided terms. The arbitration provisions in the CMAs were not one-sided, but
bilateral: were Chase to bring claims against Stinger, Stinger could compel
arbitration. Second, Stinger cites no legal authority for his argument that a
“lack of meaningful choice” renders an arbitration agreement unconscionable.
Moreover, Stinger did have a choice—he could have rejected the terms Chase
offered and either adjusted his travel plans or used other forms of payment such
as bank-issued check cards.           Third, Stinger’s unfair surprise argument is


       5
         All of the cases Stinger cites apply California law and are factually distinguishable
from this case. See Armendariz v. Found. Health Psychare Servs., Inc., 24 Cal.4th 83, 114, 117-
18 (2000) (holding unconscionable an arbitration agreement requiring employees to arbitrate
claims against the employer but not requiring the employer to arbitrate claims against the
employees); Badie v. Bank of Am., 79 Cal. Rptr. 2d 273, 288-89 (Cal. Ct. App. 1998) (holding
that a credit card company could not introduce an alternative dispute resolution provision
through a “bill stuffer” where nothing in the original agreement mentioned dispute resolution);
Carboni v. Arrospide, 2 Cal. Rptr. 2d 845, 850-51 (Cal. Ct. App. 1991) (holding unconscionable
loan terms with an extraordinarily high interest rate); A & M Produce Co. v. FMC Corp., 186
Cal. Rptr. 114, 126 (Cal. Ct. App. 1982) (holding unconscionable a disclaimer of warranties
under the Uniform Commercial Code where there was “allocation of commercial risks in a
socially or economically unreasonable manner”).

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without merit. Under Delaware law, a credit card issuing bank may unilaterally
add or alter an arbitration provision to a credit card agreement by sending notice
and giving the cardholder an opportunity to send notice to the bank of a rejection
of the amendment. Edelist v. MBNA Am. Bank, 790 A.2d 1249, 1257-1260 (Del.
Super. Ct. 2001); see also DEL. CODE. ANN. tit. 5 § 952(a).
      We also note that courts applying Delaware law have consistently rejected
claims that arbitration clauses in credit card agreements are unconscionable.
See, e.g., Heiges v. JP Morgan Chase Bank, N.A., No. 3:07CV1157, 2007 WL
3166769, at *6-*7 (N.D. Ohio Oct. 26, 2007) (holding that an arbitration
provision in a credit card cardholder agreement was not unconscionable);
Carmack v. Chase Manhattan Bank (USA), No. C 07-02124, 2007 WL 3274151,
at *7 (N.D. Cal. Aug. 3, 2007) (“Credit card agreements containing arbitration
clauses are not unconscionable in either California or Delaware when they bind
both parties equally.”); Marsh v. First USA Bank, N.A., 103 F. Supp. 2d 909, 920
(N.D. Tex. 2000) (holding that a credit card arbitration provision “presented in
a take-it-or-leave-it-manner” was not unconscionable). Similarly, the arbitration
agreement between Chase and Stinger was not unconscionable.
                             III. CONCLUSION
      Stinger and Chase entered into a valid agreement to arbitrate Stinger’s
claims, and that agreement was not unconscionable. Therefore, we AFFIRM the
judgment of the district court.
      AFFIRMED.




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