A.D. v. Credit One Bank, N.A., 885 F.3d 1054

Background

A.D., a minor, sued Credit One Bank under the TCPA alleging repeated autodialed calls to her cell phone placed to collect her mother’s debt.
Ms. Serrano (A.D.’s mother) had a Credit One cardholder agreement containing an arbitration clause and class-action waiver, and Credit One’s records later showed A.D.’s phone number attached to Serrano’s account after Serrano used A.D.’s phone to access the account.
Credit One moved to compel arbitration after discovery, arguing A.D. was an "Authorized User" (or otherwise bound) and thus subject to the arbitration clause; the district court granted the motion and stayed the case.
The district court concluded A.D. directly benefited from the cardholder agreement and was estopped from avoiding arbitration; it certified an interlocutory appeal on whether A.D. was bound.
The Seventh Circuit reversed: A.D. was not an authorized user under the contract terms, was a minor without capacity to contract (and had disaffirmed any such relation), and equitable estoppel/direct-benefits principles did not require arbitration.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether A.D. is bound to arbitrate as an Authorized User of Serrano’s account	A.D.: she never was added as an Authorized User and did not consent to arbitrate	Credit One: A.D. used the card and thus was an Authorized User per agreement language	Held: Not bound — contract requires a formal addition process, age requirement, fee, and issuance of a card; none occurred
Whether equitable estoppel/direct-benefits binds A.D. to the arbitration clause	A.D.: she received no direct contractual benefit and her TCPA claim does not rely on the card agreement	Credit One: A.D. directly benefited by using the card and her claims implicate the contract (consent defense)	Held: Not estopped — A.D. received only a limited, non-contractual benefit; her TCPA claim is independent and does not rely on enforcing the card agreement
Whether A.D.’s minority and failure to plead infancy waived her right to avoid arbitration	A.D.: as a minor she lacked capacity and has disaffirmed any contractual obligations; she filed suit while still a minor	Credit One: A.D. waived or impliedly ratified by failing to raise infancy earlier	Held: Minority protects A.D.; Credit One had the burden to prove she was an Authorized User and could not rely on waiver here
Whether a defendant’s affirmative defense relying on the cardholder agreement transforms a statutorily based TCPA suit into one subject to arbitration	A.D.: TCPA claim stands apart; consent is an affirmative defense for Credit One to prove, not part of A.D.’s claim	Credit One: because consent under the card agreement is relevant, the dispute centers on the contract and should be arbitrated	Held: Rejected — reliance on the agreement as an affirmative defense does not convert the plaintiff’s independent statutory claim into one that invokes the arbitration clause

Key Cases Cited

Moser v. FCC, 46 F.3d 970 (9th Cir. 1995) (context for TCPA’s origination addressing autodialers)
AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (Supreme Court) (FAA reflects a national policy favoring arbitration)
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (Supreme Court) (arbitration is a matter of contract)
United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574 (Supreme Court) (a party cannot be compelled to arbitrate disputes it did not agree to submit)
Zurich Am. Ins. Co. v. Watts Indus., Inc., 417 F.3d 682 (7th Cir.) (limits on binding non-signatories; exceptions listed)
Scheurer v. Fromm Family Foods LLC, 863 F.3d 748 (7th Cir.) (standard of review for motions to compel arbitration; equitable doctrines may apply)
Int’l Paper Co. v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411 (4th Cir.) (direct-benefits estoppel doctrine in arbitration context)
E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d 187 (3d Cir.) (decision explaining when a dispute is "core" to a contract)