United States District Court, W.D. Wisconsin
MAURICE JEWELL, JR., on behalf of himself and all others similarly situated, Plaintiff,
HSN, INC., Defendant.
OPINION AND ORDER
D. Peterson District Judge.
Maurice Jewell brings this proposed class action against
defendant retailer HSN, Inc. Jewell used an HSN-branded
credit card issued by Comenity Capital Bank to make purchases
from HSN, which attempted to collect his unpaid balance.
Jewell contends that HSN refused to comply with his requests
to stop calling his mobile phone in its collection attempts,
thereby violating the Telephone Consumer Protection Act
(TCPA), 47 U.S.C. § 227, and the Wisconsin Consumer Act
(WCA), Wis.Stat. §§ 427.101-105.
moves to compel arbitration, relying on an arbitration
provision in the account agreement between Jewell and
Comenity. Dkt. 11. Because HSN isn't entitled to
compel arbitration under the account agreement, the court
will deny HSN's motion.
motion to compel arbitration is reviewed in the same way as a
motion for summary judgment. Tinder v. Pinkerton
Sec., 305 F.3d 728, 735 (7th Cir. 2002). The court
considers all evidence in the record and draws all reasonable
inferences in the light most favorable to Jewell because he
is the non-moving party. Id.
(which isn't a party to this lawsuit) partners with
nearly 150 retailers, including HSN, to issue branded credit
cards. Together, Comenity and HSN market the HSN Card, a
credit card that can only be used to purchase goods from HSN.
The HSN Card's account agreement is solely between the
cardholder and Comenity; HSN isn't a party to the
also offers some of its goods through its
“FlexPay” program, which allows a customer to
receive his purchase up front and then pay for it in
installments. Dkt. 14, ¶ 12. When due, each installment
is billed separately to the customer's credit card,
whether it is an HSN Card or another card.
2016, Jewell used his HSN Card to purchase two items from
HSN, a t-shirt and a smartphone, under the FlexPay program.
Each item's price was divided into five installments,
which HSN billed to Jewell's HSN Card. The first four
installments for each item were billed successfully, but
Comenity declined payment for both items' fifth
installments. HSN then called Jewell's mobile phone
regarding these declined payments. Those calls form the basis
of this lawsuit.
Card account agreement contains an arbitration provision that
states, “Arbitration may be elected by any party with
respect to any Claim.” Dkt. 13-1, at 3. It defines a
“Claim” as “any claim, dispute, or
controversy between you and us” that relates to the
cardholder's use of the card. Id. And it defines
“Parties Subject to Arbitration, ” in relevant
part, in this way: “Solely as used in this Arbitration
Provision (and not elsewhere in this Agreement), the terms
‘we,' ‘us' and ‘our' mean . . .
Comenity Capital Bank, any parent, subsidiary or affiliate of
the Bank and the employees, officers and directors of such
companies.” Id. HSN moves to compel
arbitration under these provisions of the account agreement.
isn't a party to Jewell's account agreement with
Comenity, which would normally prevent HSN from invoking the
agreement's arbitration provision. Everett v. Paul
Davis Restoration, Inc., 771 F.3d 380, 383 (7th Cir.
2014). But a nonparty can sometimes invoke an arbitration
provision under principles of state contract law. Arthur
Andersen LLP v. Carlisle, 556 U.S. 624, 631 (2009).
Because the account agreement states that it is governed by
Utah law, the parties agree that Utah law should govern
application of the agreement's arbitration provision.
contends that under Utah law, it is entitled to invoke the
agreement's arbitration provision as a third-party
beneficiary of the agreement or under equitable estoppel
principles and that Jewell's claims fall within the
provision's scope. But the court isn't persuaded by
either of these theories.
primary contention is that it is expressly included in the
account agreement's arbitration provision as an
“affiliate” of Comenity entitled to compel
arbitration. This is really an argument that HSN is a
third-party beneficiary under the express terms of the
agreement, although HSN doesn't frame it in this way. HSN
argues, alternatively, that it's a third-party