                     United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 08-1362
                                   ___________

Virginia Cicle,                         *
                                        *
             Appellee,                  *
                                        * Appeal from the United States
      v.                                * District Court for the
                                        * Western District of Missouri.
Chase Bank USA,                         *
                                        *
             Appellant.                 *
                                   ___________

                             Submitted: October 15, 2008
                                Filed: October 6, 2009
                                 ___________

Before RILEY, BOWMAN, and COLLOTON, Circuit Judges.
                           ___________

BOWMAN, Circuit Judge.

     Chase Bank USA appeals from the order of the District Court denying its
motion to stay litigation and to compel the arbitration of claims that Virginia Cicle
brought in a lawsuit related to her Chase credit card. We reverse.

      Cicle opened a credit card account with Chase, a national bank incorporated in
and with its principal place of business in Delaware, in April 2002. At that time, she
received in the mail at her residence in Missouri the credit card and a Cardmember
Agreement that included a binding arbitration agreement and a class-action waiver.
The Cardmember Agreement was revised, as permitted by the terms of the original
Agreement and with notice to Cicle, several times over the next few years.
        From January 1, 2004, through April 1, 2004, Cicle's Chase account carried a
7.99% annual percentage rate (APR) on unpaid balances. On her May 3, 2004,
statement, Cicle noticed that the rate had increased dramatically, to 25.99%. She
contends that she received no notice of this increase. Later in the year, in response to
Cicle's inquiry, Chase advised her that a credit agency had reported her as past due on
an unrelated loan or account, so Chase increased the APR from the 7.99% "Preferred
Customer Pricing" rate. Cicle says she paid about $80 in higher finance charges as a
result.

       In November 2005, Chase sent Cicle a new arbitration agreement that replaced
the one previously in effect. As with earlier amendments, Cicle was given the option
of rejecting the change in writing, which would close the account to future charges.
But she continued to use the card after the December 22, 2005, cutoff. By doing so,
according to the terms of the agreement, Cicle accepted the amendments—whether or
not she sent notice.

       In 2007, Cicle filed a class-action lawsuit in Missouri state court alleging in two
counts that Chase (1) imposed illegal penalties and (2) committed an unfair
merchandising practice under the Missouri Merchandising Practices Act (MMPA).
Chase removed the case to federal court under the Class Action Fairness Act of 2005
on the basis of diversity jurisdiction and federal question jurisdiction arising under the
National Bank Act. Chase then filed a motion to stay the litigation and compel
arbitration pursuant to the terms of the Cardmember Agreement:

      ARBITRATION AGREEMENT:         PLEASE READ THIS
      AGREEMENT CAREFULLY. IT PROVIDES THAT ANY DISPUTE
      MAY BE RESOLVED BY BINDING ARBITRATION.
      ARBITRATION REPLACES THE RIGHT TO GO TO COURT. YOU
      WILL NOT BE ABLE TO BRING A CLASS ACTION OR OTHER
      REPRESENTATIVE ACTION IN COURT SUCH AS THAT IN THE
      FORM OF A PRIVATE ATTORNEY GENERAL ACTION, NOR
      WILL YOU BE ABLE TO BRING ANY CLAIM IN ARBITRATION

                                           -2-
AS A CLASS ACTION OR OTHER REPRESENTATIVE ACTION.
YOU WILL NOT BE ABLE TO BE PART OF ANY CLASS ACTION
OR OTHER REPRESENTATIVE ACTION BROUGHT BY ANYONE
ELSE, OR BE REPRESENTED IN A CLASS ACTION OR OTHER
REPRESENTATIVE ACTION. IN THE ABSENCE OF THIS
ARBITRATION AGREEMENT, YOU AND WE MAY OTHERWISE
HAVE HAD A RIGHT OR OPPORTUNITY TO BRING CLAIMS IN
A COURT, BEFORE A JUDGE OR JURY, AND/OR TO
PARTICIPATE OR BE REPRESENTED IN A CASE FILED IN
COURT BY OTHERS (INCLUDING CLASS ACTIONS AND OTHER
REPRESENTATIVE ACTIONS). OTHER RIGHTS THAT YOU
WOULD HAVE IF YOU WENT TO A COURT, SUCH AS
DISCOVERY OR THE RIGHT TO APPEAL THE DECISION MAY
BE MORE LIMITED. EXCEPT AS OTHERWISE PROVIDED
BELOW, THOSE RIGHTS ARE WAIVED.

Binding Arbitration. This Arbitration Agreement is made pursuant to
a transaction involving interstate commerce, and shall be governed by
and be enforceable under the Federal Arbitration Act (the "FAA"), 9
U.S.C. §1-16 as it may be amended. This Arbitration Agreement sets
forth the circumstances and procedures under which claims (as defined
below) may be resolved by arbitration instead of being litigated in court.

....

Claims Covered. 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 Cardmember Agreement, any
prior Cardmember Agreement, your credit card Account or the
advertising, application or approval of your Account ("Claim"). . . .

....

As an exception to this Arbitration Agreement, you retain the right to
pursue in a small claims court any Claim that is within that court's

                                   -3-
     jurisdiction and proceeds on an individual basis. If a party elects to
     arbitrate a Claim, the arbitration will be conducted as an individual
     action. Neither you nor we agree to any arbitration on a class or
     representative basis, and the arbitrator will have no authority to proceed
     on such basis. This means that even if a class action lawsuit or other
     representative action, such as that in the form of a private attorney
     general action, is filed, any Claim between us related to the issues raised
     in such lawsuits will be subject to an individual arbitration claim if either
     you or we so elect.

     ....

     Costs. We will reimburse you for the initial arbitration filing fee paid by
     you up to the amount of $500 upon receipt of proof of payment.
     Additionally, if there is a hearing, we will pay any fees of the arbitrator
     and arbitration administrator for the first two days of that hearing. The
     payment of any such hearing fees by us will be made directly to the
     arbitration administrator selected by you or us pursuant to this
     Arbitration Agreement. All other fees will be allocated in keeping with
     the rules of the arbitration administrator and applicable law. However,
     we will advance or reimburse filing fees and other fees if the arbitration
     administrator or arbitrator determines there is good reason for requiring
     us to do so or you ask us and we determine there is good cause for doing
     so. Each party will bear the expense of the fees and costs of that party's
     attorneys, experts, witnesses, documents and other expenses, regardless
     of which party prevails, for arbitration and any appeal (as permitted
     below), except that the arbitrator shall apply any applicable law in
     determining whether a party should recover any or all fees and costs
     from another party.

     ....

     Severability, survival. . . . If any portion of this Arbitration Agreement
     is deemed invalid or unenforceable, the remaining portions shall
     nevertheless remain in force.

2005 Notice of Amendment to Cardmember Agreement at 3–6.

                                         -4-
       The District Court applied Missouri law and found the class-action waiver and
the cost-sharing terms of the arbitration agreement to be unconscionable, but relied
on the terms of the Cardmember Agreement to sever the class-action waiver as a non-
essential term. The court conditionally granted Chase's motion to compel arbitration
and stay litigation if Chase agreed to pay all costs and fees associated with the
arbitration. Chase did not agree, so the District Court denied enforcement of the
arbitration clause as unconscionable under Missouri law. Chase appeals and we
reverse.

        We review de novo both the District Court's choice-of-law determination and
its ultimate decision to deny Chase's motion to compel arbitration. See St. Paul Fire
& Marine Ins. Co. v. Bldg. Constr. Enters., 526 F.3d 1166, 1168 (8th Cir. 2008);
EEOC v. Woodmen of the World Life Ins. Soc'y, 479 F.3d 561, 565 (8th Cir. 2007).

      Chase first argues that the District Court erred in applying Missouri law in the
face of a choice-of-law clause set forth in the Cardmember Agreement. The
applicable "GOVERNING LAW" paragraph of the 2004 amendment to the
Cardmember Agreement reads as follows:

      THE TERMS AND ENFORCEMENT OF THIS AGREEMENT AND
      YOUR ACCOUNT SHALL BE GOVERNED AND INTERPRETED IN
      ACCORDANCE WITH FEDERAL LAW AND, TO THE EXTENT
      STATE LAW APPLIES, THE LAW OF DELAWARE, WITHOUT
      REGARD TO CONFLICT-OF-LAW PRINCIPLES. THE LAW OF
      DELAWARE, WHERE WE AND YOUR ACCOUNT ARE LOCATED,
      WILL APPLY NO MATTER WHERE YOU LIVE OR USE THE
      ACCOUNT.

       Federal courts sitting in diversity apply the choice-of-law rules of the forum
state. Prudential Ins. Co. of Am. v. Kamrath, 475 F.3d 920, 924 (8th Cir. 2007).
Under Missouri law, a choice-of-law clause in a contract generally is enforceable


                                         -5-
unless application of the agreed-to law is "contrary to a fundamental policy of
Missouri." Kagan v. Master Home Prods. Ltd., 193 S.W.3d 401, 407 (Mo. Ct. App.
2006). The District Court held that the binding arbitration provision and the class-
action waiver, if enforced under Delaware law, would be contrary to a fundamental
policy of Missouri. Chase argues that the court's choice-of-law analysis was flawed
and urges reversal on that ground. We find it unnecessary to resolve the choice-of-law
question, however, because we would reverse the District Court whether we apply the
law of Missouri or Delaware. See Kamrath, 475 F.3d at 924 (declining to decide
choice-of-law issue where that decision would have no impact on the outcome of the
case). The parties seem to agree that the application of Delaware law would be
dispositive in favor of Chase. Because the application of Missouri law presents a
closer case, we will proceed with our analysis as if Missouri law applied.

        Under the Federal Arbitration Act, a written arbitration agreement such as the
one at issue here "shall be valid, irrevocable, and enforceable, save upon such grounds
as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Section
2 reflects congressional intent "to overcome judicial hostility to arbitration
agreements." Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 272 (1995). But
it also "gives States a method for protecting consumers against unfair pressure to
agree to a contract with an unwanted arbitration provision," if the contract violates
state law. Id. at 281. "What States may not do is decide that a contract is fair enough
to enforce all its basic terms (price, service, credit), but not fair enough to enforce its
arbitration clause." Id. Doubts are resolved in favor of arbitrability. Moses H. Cone
Mem'l Hosp. v. Mercury Constr. Co., 460 U.S. 1, 24–25 (1983). But general contract
defenses, such as unconscionability, "may be applied to invalidate arbitration
agreements without contravening § 2." Doctor's Assocs., Inc. v. Casarotto, 517 U.S.
681, 687 (1996). The District Court held that the Chase agreement to arbitrate is
unconscionable under Missouri law.




                                           -6-
       Before a contract will be deemed unenforceable on the grounds of
unconscionability, a court applying Missouri law must find it both procedurally and
substantively unconscionable. Whitney v. Alltel Commc'ns, Inc., 173 S.W.3d 300,
308 (Mo. Ct. App. 2005). Missouri cases suggest that the two aspects should be
considered together and balanced, so "that if there exists gross procedural
unconscionability then not much be needed by way of substantive unconscionability"
and vice versa. Id. (quoting Funding Sys. Leasing Corp. v. King Louie Int'l, Inc., 597
S.W.2d 624, 634 (Mo. Ct. App. 1979)). An examination of contract formation—the
process—is necessary to determine whether an agreement is procedurally
unconscionable. Id. For substantive unconscionability, we consider the terms of the
contract itself. Id. We look at the totality of the circumstances on an objective basis,
considering the reasonable expectations of the average person entering into such an
agreement. Id. at 310. "Missouri courts have described an unconscionable agreement
as one in which 'no man in his senses and not under delusion would make, on the one
hand, and as no honest and fair man would accept on the other,' or one where there is
'an inequality so strong, gross, and manifest that it must be impossible to state it to one
with common sense without producing an exclamation at the inequality of it.'"
Pleasants v. Am. Express Co., 541 F.3d 853, 857 (8th Cir. 2008) (quoting Smith v.
Kriska, 113 S.W.3d 293, 298 (Mo. Ct. App. 2003) and omitting internal quotations).
We consider first the extent to which the arbitration agreement at issue here is
procedurally unconscionable.

       It is true, as the District Court noted, that the terms of the agreement were in
fine print, but the arbitration provision was in the same size font as the rest of the 2005
notice of amendment. And in the original Cardmember Agreement, as well as the
2005 amendment that Chase seeks to enforce here (relevant parts of which are quoted
above), the arbitration agreement and class-action waiver were introduced by a bold-
faced heading and a paragraph in all-uppercase font explaining the litigation rights
that were being waived by acceptance and use of the card. See id. at 859 ("[T]here are
not strong indicia of procedural unconscionability, given the conspicuous manner in

                                           -7-
which the class-action waiver appeared."). The notice specifically stated in the
"Summary of Changes" section that the arbitration agreement was being amended and
suggested that the cardholder review the changes. An agreement to arbitrate and a
class-action waiver were always a part of Cicle's agreement with Chase and were not
foisted upon an unwary consumer only after she had begun using the card. Cf.
Whitney, 173 S.W.3d at 310 (finding procedural unconscionability where, among
other things, the arbitration provision was sent to a wireless telephone customer five
years after he originally contracted with the provider and appeared "in fine print on
the back side of a sheet sent . . . with his regular bill").

        When Cicle received the 2005 notice of amendment, she had thirty days to
reject the changes in writing, which would close her account. Cicle contends that the
revised arbitration agreement is therefore a negative option, "an offer that is deemed
to be accepted by a failure to respond," and therefore unconscionable. Br. of Appellee
at 29. We disagree. Cicle had ample opportunity and time to opt out of the
amendment before it took effect, but instead she continued to use the card. By doing
so, according to the terms of the notice, she affirmatively accepted the amendment.

       We recognize, as we must, Chase's superior bargaining position and the lack of
opportunity in the ordinary course for negotiation between consumer and bank in the
application for a credit card. But there is no evidence that Chase engaged in "high-
pressure sales tactics to coerce" Cicle into entering into the Cardmember Agreement.
Fallo v. High-Tech Inst., 559 F.3d 874, 878 (8th Cir. 2009). These sorts of take-it-or-
leave-it agreements between businesses and consumers are used all the time in today's
business world. If they were all deemed to be unconscionable and unenforceable
contracts of adhesion, or if individual negotiation were required to make them
enforceable, much of commerce would screech to a halt. "Because the bulk of
contracts signed in this country are form contracts—'a natural concomitant of our
mass production-mass consumer society'—any rule automatically invalidating
adhesion contracts would be 'completely unworkable.'" Swain v. Auto Servs., Inc.,

                                         -8-
128 S.W.3d 103, 107 (Mo. Ct. App. 2003) (quoting Hartland Computer Leasing Corp.
v. Ins. Man, Inc., 770 S.W.2d 525, 527 (Mo. Ct. App. 1989)). The agreement at issue
here is not so procedurally unconscionable as to render it unenforceable unless the
agreement is grossly unconscionable in substance. We consider that aspect next.

       The District Court concluded that the class-action waiver and the cost-sharing
provisions within the arbitration agreement are unconscionable, making the overall
agreement substantively unconscionable. Because Cicle's actual damages (and those
of others who have allegedly been wronged by the actions of Chase that are at issue
in this case) are small, the court found, relying largely on the Missouri Court of
Appeals opinion in Whitney, that Cicle and those similarly situated would have no
effective remedy if the arbitration agreement were enforced without severing the
waiver. See Whitney, 173 S.W.3d at 309 ("Prohibiting class treatment of these claims
would leave consumers with relatively small claims without a practical remedy . . . .").
But the Chase arbitration agreement is distinguishable in several respects from the one
challenged in Whitney. As relevant here, the Chase agreement specifically provides
an exception to binding arbitration: Cicle may file her claim individually in small
claims court, which would afford her a relatively inexpensive, quick, and easy
adjudication. Small claims court provides "a practical remedy"—an alternative venue
for vindication of Cicle's rights with a judicial process specifically designed for claims
like hers.

      The District Court also determined that the class-action waiver "violates
Missouri's fundamental policy," as reflected in the MMPA, "to protect the public from
deceptive merchandising practices." Order at 9. We think that overstates the case.
The MMPA allows for class actions, see Mo. Rev. Stat. § 407.025.2, but does not
suggest that public policy favors class actions or that the wrongs sought to be
remedied by the MMPA would continue unabated without the availability of class
actions. Further, it is important to note that the arbitration agreement at issue here,
unlike the one in Whitney, limits neither Chase's liabilities nor Cicle's remedies under

                                           -9-
the MMPA. See Pleasants, 541 F.3d at 858 (upholding enforceability of class-action
waiver in arbitration agreement in case brought under the Truth in Lending Act, under
which "a prevailing plaintiff may recover attorney's fees, costs, statutory damages (up
to $2,000), and actual damages"). Under the MMPA, Cicle may be awarded punitive
damages, attorney's fees, and equitable relief. See Mo. Rev. Stat. § 407.025.1. And
the arbitration agreement makes no attempt to limit the amount or types of damages
that an arbitrator may award or to bar any available legal or equitable remedy. We
hold that the District Court erred in severing the class-action waiver from the
agreement to arbitrate.

       As for costs, according to the agreement, both parties are to bear their own
costs, except the agreement leaves open, at the arbitrator's discretion and in keeping
with the applicable law, the possibility of shifting all costs, regardless of which party
prevails. According to the District Court, Cicle and others similarly situated "must
risk incurring significant costs without the resulting opportunity for payout." Order
at 15. But under the terms of the agreement, Chase will reimburse Cicle up to $500
for the initial arbitration filing fee and will pay the arbitrator's and arbitration
administrator's fees for two days of hearings. In addition, Chase "will advance or
reimburse filing fees and other fees if the arbitration administrator or arbitrator
determines there is good reason for requiring us to do so or you ask us and we
determine there is good cause for doing so."

       The District Court concluded that the cost- and fee-sharing provisions of the
agreement are insufficient to save the agreement from unconscionability because Cicle
could be responsible for the payment of substantial costs and fees if she goes forward
with an individual arbitration. In support of this position, the court relied on an
affidavit Cicle filed with her motion for summary judgment that enumerates costs
associated with a class-action arbitration in another matter. The court posited, based
on the affidavit, that two days "is not long enough to conduct a class arbitration" and
that "it is likely the arbitrator will charge a considerable hourly fee before there are

                                          -10-
any hearings in the matter." Order at 15. Cicle also argues that even if she were to
prevail in arbitration, Chase could appeal, according to the terms of the agreement, to
a panel of three arbitrators, and run up her costs even more.

       We disagree with the District Court's determination that the agreement to
arbitrate is substantively unconscionable because of the potential that Cicle could be
obligated to pay excessive costs and fees. The cost-sharing and cost-shifting
provisions in the arbitration agreement save it from being unconscionable on its face.
And the record does not support the court's conclusion that the costs and fees
associated with arbitration of Cicle's individual claim make the agreement
unconscionable as to her. Because Cicle "seeks to invalidate an arbitration agreement
on the ground that arbitration would be prohibitively expensive, [she] bears the burden
of showing the likelihood of incurring such costs." Green Tree Fin. Corp.–Al. v.
Randolph, 531 U.S. 79, 92 (2000). In Green Tree, the Supreme Court held that an
arbitration agreement's silence as to who would bear the costs of arbitration and the
plaintiff's unsupported assertion of "high" costs and her inability to pay them made the
risk that arbitration would be cost-prohibitive for plaintiff "too speculative to justify
the invalidation of an arbitration agreement." Id. at 90 & n.6, 91. In this case, Cicle
"has not provided the evidence necessary to estimate the length of the arbitration and
the corresponding amount of arbitrators' fees (e.g. sophistication of the issues, average
daily or hourly arbitrator costs in the region)" for an individual arbitration. Faber v.
Menard, Inc., 367 F.3d 1048, 1054 (8th Cir. 2004). The only cost information Cicle
has produced cannot support a legal conclusion of unconscionability because it is
purely speculative or relates to a class, not an individual, arbitration of a different
matter.1



      1
        We recognize that the District Court relied on the affidavit when considering
the cost issue because the court had severed the class-action waiver from the
arbitration agreement and apparently assumed that the action would proceed as a class
arbitration with Cicle as named plaintiff.

                                          -11-
      In sum, the District Court erred in holding that the arbitration agreement as
written is so substantively unconscionable that when considered with any procedural
unconscionability inherent in the agreement, it is unenforceable.

       Although it may be tempting, we cannot allow the unfair credit card practices
alleged in Cicle's claims against Chase (some of which are now or will soon be illegal)
to color our analysis of the unconscionability of the arbitration provision to which
Cicle agreed. We hold that Cicle has not shown that the agreement is so
unconscionable under Missouri law that it should not be enforced. Accordingly, we
reverse the judgment of the District Court and remand with instructions to enter an
order granting Chase's Motion to Compel Arbitration and to Stay Litigation.
                        ______________________________




                                         -12-
