NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                               ________________

                                      No. 18-3802
                                   ________________

                                       DIANE ORN

                                             v.

                             ALLTRAN FINANCIAL, L.P.,

                                              Appellant

                     On Appeal from the United States District Court
                         for the Middle District of Pennsylvania
                                (D.C. No. 3-18-cv-00599)
                      District Judge: Honorable James M. Munley
                      ____________________________________

                      Submitted under Third Circuit L.A.R. 34.1(a)
                                   on July 9, 2019

             Before: SHWARTZ, KRAUSE, and FUENTES, Circuit Judges

                              (Opinion filed: July 12, 2019)



                                        OPINION *




       *
        This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
KRAUSE, Circuit Judge.

       Alltran Financial, a debt collector, appeals the District Court’s denial of its motion

to compel arbitration of Diane Orn’s suit under the Fair Debt Collection Practices Act

(FDCPA). As Alltran contends that South Dakota law governs whether it can invoke

Citibank’s arbitration agreement with its cardholders, and the only two theories it raises

under South Dakota law prove unavailing, we will affirm the District Court’s order.

I.     Background

       In June 2016, Diane Orn opened a credit-card account with Citibank. The credit-

card agreement governing her relationship with Citibank included a mandatory arbitration

provision stating that “[y]ou or we may arbitrate any claim, dispute or controversy

between you and us arising out of or related to your Account . . . (called ‘Claims’).”

App. 47. In identifying who can force arbitration, the agreement repeatedly speaks of

“us” or “you,” which it defines as “Citibank, N.A.” and “[t]he cardmember who opened

the Account” respectively. App. 40, 47. But, although the agreement does not expressly

allow any third party to compel arbitration, it does provide that “all Claims are subject to

arbitration . . . includ[ing] Claims made by or against anyone connected with us or you or

claiming through us or you, or by someone making a claim through us or you, such as a

co-applicant, authorized user, employee, agent, representative or an

affiliated/parent/subsidiary company.” App. 47. The agreement also contains a choice-

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of-law clause providing “[f]ederal law and the law of South Dakota govern the terms and

enforcement of this Agreement.” App. 48.

       After Orn fell behind on her credit-card payments, Citibank referred her account to

Alltran for collection. Alltran then sent Orn at least four dunning letters seeking to

collect on Orn’s account. One of these letters, Orn contends, violated the FDCPA by

failing to inform her whether interest would continue to accrue on her account. Orn’s

complaint, filed in April 2018, neither relies on the terms of the Citibank credit-card

agreement nor contends that Citibank committed any wrongdoing. Rather, she named

Alltran as the sole defendant.

       Having been haled into federal court, Alltran sought to enforce the arbitration

provision in Orn’s credit-card agreement with Citibank under a third-party beneficiary,

agency, or equitable-estoppel theory. The District Court rejected each argument. It held

that Alltran could not enforce the arbitration agreement as a third-party beneficiary

because the agreement did not evince an intent to benefit Alltran. In considering

Alltran’s agency theory, the District Court concluded that Alltran was Citibank’s agent

but Orn’s FDCPA claim did not bear a sufficient nexus to the credit-card agreement for

Alltran to invoke the arbitration agreement. Finally, the District Court concluded that

Alltran could not equitably estop Orn from resisting arbitration under this Court’s

interpretation of South Dakota law in White v. Sunoco, Inc., 

(3d Cir. 2017).

       This interlocutory appeal followed.

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II.    Discussion 1

       Before considering the merit of Alltran’s appeal, we must determine which

jurisdiction’s substantive law attends this dispute. After Arthur Andersen LLP v.

Carlisle, 

(2009), federal courts may no longer fashion federal common law

rules of third-party enforcement, so we look to the relevant state’s substantive law to

determine whether Alltran can invoke Citibank’s arbitration agreement with its

cardholders. 

. Although that state might have been Pennsylvania,

where Orn resides and received the dunning letters, Alltran urges us to apply South

Dakota law based on the card agreement’s South Dakota choice-of-law clause, even

though a choice-of-law clause, just like an arbitration provision, generally can be invoked

only by a party with standing to enforce an agreement. See, e.g., In re Henson, 

, 1059 (9th Cir. 2017); see also Schnabel v. Trilegiant Corp., 

, 119 (2d

Cir. 2012); 

n.6. Orn does not dispute the applicability of South

Dakota law, so we will accept Alltran’s entreaty to apply it.

       On the merits, Alltran seeks to invoke Citibank’s arbitration agreement with its

customers as a third-party beneficiary or as Citibank’s agent. Neither theory is availing.


       1
         The District Court had federal-question jurisdiction over Orn’s FDCPA suit
under 28 U.S.C. § 1331, and we have interlocutory jurisdiction over the District Court’s
denial of Alltran’s motion to compel arbitration under 9 U.S.C. § 16(a)(1)(C). Because
the District Court did not conduct any fact-finding, we consider de novo the District
Court’s denial of Alltran’s motion to compel arbitration. Griswold v. Coventry First
LLC, 

, 270 (3d Cir. 2014). We may affirm on any basis supported by the

                                             4
       Under South Dakota law, a non-signatory may enforce an agreement as a third-

party beneficiary if two conditions are met: (1) “[t]he terms of the contract . . . clearly

express intent to benefit that party or an identifiable class of which the party is a

member,” and (2) “the contract was entered into by the parties directly and primarily for

his benefit.” Jennings v. Rapid City Reg’l Hosp., Inc., 

, 922–23 (S.D.

2011) (citations omitted); see also Masad v. Weber, 

, 153–54 (S.D.

2009) (holding that an express intent to benefit a third party does not suffice). The

second condition creates a “but-for” test that requires a non-signatory to show that the

parties would not have executed the agreement unless they intended to benefit the third

party. See 

(“But for the Employees, . . . they would not

have entered into the Agreements. We look only at who was directly and primarily

benefited.”).

       We need not resolve whether the card agreement’s mention of “connected entities”

manifests a clear intent to grant Alltran the right to compel arbitration, see 

–68 (rejecting a similar argument), because Alltran fails to acknowledge—

much less satisfy—this second condition. Without evidence that Citibank and its

cardholders would not have entered the card agreement but for the intent to benefit debt

collectors like Alltran, it cannot enforce the arbitration provision as a third-party

beneficiary under South Dakota law. See 

–54.


record. Fairview Twp. v. EPA, 

, 525 n.15 (3d Cir. 1985).
                                               5
       Alltran’s agency theory suffers from an even more fundamental flaw: It does not

cite—and we have not found—South Dakota authority adopting a freestanding “agency”

theory of third-party enforcement. On appeal, the only South Dakota authority Alltran

cites to bolster its agency theory does not address third-party enforcement of a contract at

all. 2 See generally NattyMac Capital LLC v. Pesek, 

(S.D. 2010).

Instead, as best as we can tell, South Dakota treats the ability of agents to compel

arbitration as a species of equitable estoppel. Indeed, in White, we relied on the South

Dakota Supreme Court’s decision referencing enforcement of contracts by agents to

distill that state’s test for equitable estoppel. 

; Rossi Fine Jewelers,

Inc. v. Gunderson, 

, 815 (S.D. 2002). This view accords with Williston

on Contracts, which recites essentially the same tests for equitable estoppel and agency.

See 21 Williston on Contracts § 57:19 (4th ed. 2019) (concluding that a putative agent

can enforce an arbitration agreement if the plaintiff “must rely on the terms of the written

agreement in asserting its claims against the nonsignatory” or the plaintiff “raises

allegations of substantially interdependent and concerted misconduct”); see 4 Am. Jur. 2d

Alternative Dispute Resolution § 62 (2d ed. 2019) (same).


       2
         The District Court, in rejecting Alltran’s agency theory, applied a two-part test
developed by a California district court, instead of examining South Dakota case law.
That was error. Following Arthur Anderson, a district court should not consider
decisions applying federal common law rules of third-party enforcement unless, based on
a careful examination of the available state case law, it has assured itself that the relevant
state has adopted the same rule. See 

n.4. This error, however, has

                                              6
       Under the applicable test, then, Alltran can enforce the arbitration clause based on

its avowed role as Citibank’s agent if either (1) “all the claims against the nonsignatory

defendants are based on alleged substantially interdependent and concerted misconduct

by both the nonsignatories and one or more of the signatories to the contract,” or (2) Orn

“asserts ‘claims arising out of agreements against nonsignatories to those agreements

without allowing those defendants also to invoke the arbitration clause contained in the

agreements.’” 

(citation omitted).

       Even accepting the District Court’s determination that Alltran acted as Citibank’s

agent, Alltran’s agency argument would still falter under either part. On the first, Alltran

does not attempt to argue that the allegations against it amount to allegations of

misconduct by Citibank, much less “substantially interdependent and concerted

misconduct.” 

the second, Alltran cannot show that Orn’s claims “aris[e] out

of” the Citibank agreement as we construed that part of South Dakota’s test for equitable

estoppel in White because “the claim[] that [Orn] asserts against [Alltran] do[es] not rely

on any terms in the Card Agreement.” 

       We do not suggest that an agent can never enforce an arbitration agreement under

South Dakota law. But on the specific facts and arguments before us, we have no basis to

conclude that South Dakota would allow Alltran, as a non-signatory, to enforce

Citibank’s arbitration agreement with its customers.


no impact on our disposition or reasoning.
                                             7
III.   Conclusion

       For the aforementioned reasons, we will affirm the District Court’s order denying

Alltran’s motion.




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