Affirming a district court ruling granting a motion to compel arbitration of a dispute between a credit card issuer and a cardholder, the Fifth Circuit Court of Appeals held that the parties' arbitration agreement was enforceable because the agreement was neither oppressive nor one-sided.

In Stinger v. Chase Bank, USA, N.A., No. 07-20325, 2008 WL 344760 (5th Cir. Feb. 7, 2008), Stinger obtained two credit cards from Chase. The credit cards were subject to a Cardmember's Agreement (CMA) containing an arbitration provision. Each CMA expressly provided that it would take effect when the cardholder used the card.

Stinger sued Chase in Texas state court, asserting several claims arising from an allegation that Chase reduced Stinger's credit limit on both cards resulting in a dishonored credit card check. Chase removed the action to federal court and moved to compel arbitration. The district court granted the motion. Stinger appealed, arguing that no valid arbitration agreement existed between him and Chase because he had never received the CMAs. Alternatively, he asserted the arbitration agreement was unconscionable.

The Court held that a valid arbitration agreement existed between Stinger and Chase and found the agreement was not unconscionable. Stinger's only evidence consisted of his unsupported testimony asserting he did not receive the CMA. The district court was well within its discretion to believe the statement from a Chase employee indicating that Chase had mailed the CMA to Stinger. Finally, by using the cards, Stinger voluntarily assumed the terms attached to the card's use.

Additionally, the Court rejected Stinger's arguments that the arbitration agreement was unconscionable. Although Chase had superior bargaining power, the Court did not find the arbitration agreement's terms oppressive or one-sided. Moreover, the arbitration agreement mutually bound both parties. If Chase sued Stinger, he too could compel arbitration under the agreement's express terms. The Court also found Stinger did not cite any legal authority to support his contention that he lacked meaningful choice. In fact, Stinger could have freely rejected the credit card terms and used other forms of payments such as bank-issued check cards.