White v. Sunoco — civil / arbitration — affirmance — Chagares

Sunoco, like many corporations, offers incentives to consumers who sign up for a rewards-program credit card. Sunoco doesn’t issue the credit card; a bank (here, Citibank) issues the card. Citibank sets terms and conditions, including that, in a dispute between the cardholder and the bank, the bank can force binding arbitration.

Here, a cardholder alleged that rewards-program benefits were fraudulent, and he sued Sunoco, not Citibank. Sunoco moved to compel arbitration based on the terms set by Citibank. The district court denied arbitration.

Today, in what strikes me as a major consumer-arbitration-law ruling, a divided Third Circuit panel affirmed, applying state law to conclude that Sunoco could not force arbitration under the credit-card terms issued by Citibank. The court rejected Sunoco’s arguments based on equitable estoppel and based on the arbitration clause’s inclusion of claims “made … against anyone connected with us.”

Joining Chagares was Restrepo. Roth dissented in an opinion that uses the phrase “basic contract law” twice and the adverb “clearly” five times. Arguing counsel were Seamus Duffy of Drinker Biddle for Sunoco and David Stanoch of Golomb & Honik for the consumer.