                                                  NOT PRECEDENTIAL

         UNITED STATES COURT OF APPEALS
              FOR THE THIRD CIRCUIT

                       ____________

                        No. 19-2865
                       ____________


                JENNIFER GORDON;
               VALERIE TANTLINGER;
              JENNIFER UNDERWOOD,
            ON BEHALF OF THEMSELVES
       AND ALL OTHERS SIMILARLY SITUATED,
                            Appellants

                             v.

        KOHL’S DEPARTMENT STORES, INC.;
       CAPITAL ONE, NATIONAL ASSOCIATION

                       ____________

       On Appeal from the United States District Court
           for the Eastern District of Pennsylvania
                   (D.C. No. 2-15-cv-00730)
        District Judge: Honorable Wendy Beetlestone
                        ____________

        Submitted under Third Circuit L.A.R 34.1(a)
                      May 28, 2020

Before: AMBRO, HARDIMAN, and RESTREPO, Circuit Judges.

                    (Filed: June 9, 2020)
                                      ____________

                                        OPINION*
                                       ___________


HARDIMAN, Circuit Judge.

       Plaintiffs are customers of Kohl’s Department Stores, Inc. They applied for a

Kohl’s private-label credit card and in the process bought a debt-cancellation product

called Kohl’s Account Ease (KAE). They sued Kohl’s and Capital One, National

Association, asserting claims for breach of the implied covenant of good faith and fair

dealing and unjust enrichment. The District Court granted Kohl’s and Capital One

summary judgment. We will affirm.

                                             I

       Kohl’s is a nationwide department store chain based in Wisconsin. For over fifty

years, Kohl’s has offered private-label credit cards (Kohl’s cards), which customers can

use to shop at Kohl’s. In 2006, Kohl’s and Chase Bank USA, N.A. agreed that Chase

would issue Kohl’s cards and own the customer accounts, and Kohl’s would service the

accounts. Chase disclosed this arrangement to customers in a Cardmember Agreement

the customers received when they applied for a Kohl’s card. The Agreement provided:




       *
        This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.


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“We may add or delete a term or change any term of this Agreement . . . by furnishing

you notice of the change in the manner required by applicable law.” App. 282.

       In 2011, Capital One bought the Kohl’s card accounts from Chase and became the

issuer. Capital One gave new customers an updated Cardmember Agreement, but

preexisting customers received the updated Agreement only if they requested it.

       From 2006 to 2017, most customers who applied for a Kohl’s card did so on point-

of-sale pin pads. The pin pads prompted them to buy KAE by stating: “I elect to purchase

optional [KAE] costing $1.60 per $100 of my ending monthly balance. I received KAE

benefit summary/disclosure.” App. 142. The benefit summary explained KAE would

cancel the balance on the customer’s account up to $10,000 when a covered person

experienced a qualifying involuntary unemployment, disability, hospitalization, or loss of

life. If a customer bought KAE and the issuing bank approved her application for a

Kohl’s card, Kohl’s forwarded the customer’s information to Assurant, KAE’s third-party

plan administrator. Assurant then sent the customer a KAE Amendment to the

Cardmember Agreement, which described KAE’s terms and conditions in full. One term

provided that Chase or Capital One could “change the terms of this Amendment at any

time, but adverse changes will not take effect until after [they] have provided [the

customer] with written notice and a reasonable opportunity to cancel.” App. 213.

       In 2011, Capital One grew concerned that because customers rarely received KAE

benefits, KAE could attract regulatory scrutiny. So Capital One and Kohl’s implemented




                                             3
changes to make KAE benefits easier for customers to receive. They first instructed

Assurant not to enforce certain terms in the KAE Amendments. For example, Assurant

did not require customers to: submit a form verifying their claim; comply with a 180-day

deadline for claims based on unemployment, disability or hospitalization; or register for

state unemployment benefits. Capital One and Kohl’s also gave refunds to customers

who complained they did not authorize KAE. Capital One and Kohl’s did not notify

customers about these changes.

       Plaintiffs are three customers who applied for Kohl’s cards and bought KAE in the

process. They sued Kohl’s and Capital One on behalf of themselves and a putative class,

asserting claims for breach of the implied covenant of good faith and fair dealing and

unjust enrichment. As the District Court noted, the theories supporting Plaintiffs’ claims

initially were “difficult to pin down.” Gordon v. Kohl’s Dep’t Stores, Inc., 172 F. Supp.

3d 840, 853 (E.D. Pa. 2016). But by the time Kohl’s and Capital One moved to dismiss

the second amended complaint, Plaintiffs alleged “two distinct theories of recovery.” Id.

Under the first theory (the “No Value” theory), Plaintiffs claimed KAE had “little or no

value,” and they did not enroll in it voluntarily. Id. They claimed Kohl’s and Chase

“unilateral[ly] enroll[ed]” them, which either violated the covenant of good faith as “an

improper exercise of [Kohl’s and Chase’s] right to impose new terms,” or was “an

instance of unjust enrichment that [fell] completely outside the terms of the Agreements.”

Id. Under the second theory (the “No Authorization” theory), Plaintiffs claimed “any




                                             4
legal authorization” they gave Kohl’s and Chase to enroll them in KAE “was not

assigned to Capital One.” Id. Thus, “[Kohl’s and Capital One’s] continued billing of

Plaintiffs for KAE . . . was either a breach of the implied covenant of good faith and fair

dealing arising from [Kohl’s and Capital One’s] improper exercise of the right to impose

new terms, or were acts that fell completely outside the Capital One Cardmember

Agreement and by which Defendants were unjustly enriched.” Id.

       Discovery showed that Plaintiffs enrolled in KAE voluntarily, so the No Value

theory was “no longer viable.” Gordon, 2017 WL 3390269, at *9 n.8 & n.9. But in their

memorandum of law in opposition to summary judgment, Plaintiffs raised a new

argument, without citation to legal authority, that Capital One and Kohl’s breached the

implied covenant of good faith and fair dealing by failing to notify customers of what

Plaintiffs called “material changes to the terms of KAE.” App. 660, 677. At oral

argument on the motion for summary judgment, Plaintiffs said this theory supported

“both” their implied-covenant and unjust-enrichment claims. Dkt. No. 2:15-cv-00730,

Doc. 181, pg. 48. But they later clarified it was a mere “component” of their No

Authorization theory. Plaintiffs explained that even if they authorized Chase to enroll

them in KAE, the material changes Kohl’s and Capital One made vitiated the

authorization. Id.

       After oral argument, the District Court correctly understood Plaintiffs as having

“clarified that their claims rest[ed] entirely on” the No Authorization theory. Gordon,




                                             5
2017 WL 3390269, at *9 n.8. In a thorough and well-reasoned opinion, the Court rejected

that theory and granted Kohl’s and Capital One summary judgment. The Court first

explained that Plaintiffs’ KAE authorization was assigned to Capital One. See id. at *10.

Next, it held Plaintiffs could not show Kohl’s or Capital One “failed to honor the terms of

KAE in good faith.” Id. Even though Plaintiffs “presented evidence that they could have

obtained a better deal or refund if they had complained about KAE,” they still “received

exactly what is described in their KAE contracts.” Id. Nor could Plaintiffs show Kohl’s or

Capital One were unjustly enriched, because their collection of KAE fees was “legally

justified.” Id. at *12.

       Plaintiffs timely appealed the summary judgment as to Kohl’s.

                                            II1

       We review the District Court’s summary judgment de novo. State Auto Prop. &

Cas. Ins. Co. v. Pro Design, P.C., 566 F.3d 86, 89 (3d Cir. 2009).

       As in the District Court, Plaintiffs’ theories on appeal have changed. They say

nothing about the two theories they argued in the District Court. Instead, they argue their

third theory, and they blame the District Court for “fundamental[ly] misinterpret[ing]”

their claims. Opening Br. 1–5. Yet as we noted already, Plaintiffs did not plead this

theory, they presented it for the first time in their memorandum of law in opposition to



       1
         The District Court had jurisdiction under 28 U.S.C. § 1332, and we have
jurisdiction under 28 U.S.C. § 1291.


                                             6
summary judgment, and they described it as only a “component” of their second theory at

oral argument. So we will not reverse the District Court on this ground. See Caisson

Corp. v. Ingersoll-Rand Co., 622 F.2d 672, 680 (3d Cir. 1980) (“[A] trial court should not

be reversed on grounds that were never urged . . . in the court below.”).

       Plaintiffs’ third theory is unpersuasive in any event. Plaintiffs argue Kohl’s

breached the implied covenant when it failed to notify customers that it stopped enforcing

certain KAE terms and implemented a new refund policy. Specifically, they argue “there

was an undeniable gap in the KAE Amendments about providing notice to customers

regarding changes to those agreements,” and Kohl’s acted “arbitrarily and unreasonably”

by notifying only “persons who called to complain . . . or [to seek] the benefits of the

product.” Opening Br. 31–33 (citation omitted). We reject Plaintiffs’ premise that Kohl’s

“change[d]” the KAE Amendments. Id. As the District Court correctly noted, Kohl’s

stopped enforcing its rights under the KAE Amendments; it did not change the

Amendments’ terms. See Gordon, 2017 WL 3390269, at *4 (“Despite these systematic

changes in the approval process for KAE claims, the formal terms of KAE were never

modified.”). Regardless, Kohl’s had no duty to notify customers about the changes

Plaintiffs contend it made. The KAE Amendments provide that adverse changes will not

take effect until after the issuing bank provides customers with written notice. To

supplement this explicit notice requirement with an implicit one requiring Kohl’s to




                                             7
notify customers about changes beneficial to them would “rewrite the contract.” Nemec v.

Shrader, 991 A.2d 1120, 1126 (Del. 2010).

       Plaintiffs also argue that if Kohl’s is not a party to the KAE Amendments, “Kohl’s

would still be liable to [them] and other KAE enrollees for unjust enrichment” because of

its “limited notice of material changes to KAE’s principal terms and conditions.”

Opening Br. 41, 43. Again, we disagree that Kohl’s changed the KAE terms. And

Plaintiffs do not deny that the KAE Amendments are valid contracts that govern their

payment of KAE fees to Capital One. So they cannot recover those fees from Kohl’s in

quasi-contract. See Wood v. Coastal States Gas Corp., 401 A.2d 932, 942 (Del. 1979)

(“[T]he contract is the measure of [Plaintiffs’] right, [and] there can be no recovery under

an unjust enrichment theory independent of it.”).

                               *             *             *

       For the reasons stated, we will affirm the District Court’s summary judgment.




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