BLST Northstar, LLC v. Santander Consumer USA, Inc.

U.S. District Court, District of Minnesota November 21, 2024

Trial Court Opinion

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

BLST Northstar, LLC, and Civ. No. 22-2210 (PAM/DJF)
BLST Receivables & Servicing, LLC,

Plaintiffs,

v. MEMORANDUM AND ORDER

Santander Consumer USA, Inc.,

Defendant.

This matter is before the Court on Defendant Santander Consumer USA, Inc.’s
Motion for Summary Judgment. (Docket No. 101.) For the following reasons, the
Motion is granted.
BACKGROUND
This lawsuit is a contract dispute between Plaintiffs BLST Northstar, LLC and
BLST Receivables & Servicing, LLC (collectively “Bluestem”), an online and mail-order
retailer, and Santander Consumer, USA, Inc. (“SCUSA”), a financial institution. In April
2013, Bluestem and SCUSA began a program in which Bluestem’s customers purchased
goods through use of Bluestem credit cards, and Bluestem sold those credit-card debts—
the receivables—to SCUSA. (Am. Compl. (Docket No. 68) ¶¶ 21–22.) Two agreements
govern this relationship, the Program Agreement (Mitcham Decl. Ex. 1 (Docket No. 115)
“PA”) and the Standard Receivables Sales Agreement (id. Ex. 2 (Docket No. 115-2)
“SRSA”).
Subsequently, SCUSA decided to exit the credit-card business and discussed
selling the receivables back to Bluestem, but ultimately did not do so, as Bluestem

declared bankruptcy in 2020. (Am. Compl. ¶ 1; Pls.’ Mem. in Opp’n (Docket No. 137)
at 12.)
In March 2021, SCUSA sold the receivables to BB Allium, LLC, an entity
controlled by Castlelake (“the Castlelake Transaction”). (Id. ¶ 35; Mitcham Decl. Ex. 8
(115-8).) The following month, SCUSA notified Bluestem that it would not renew the
PA, which was set to expire in April 2022. (Am. Compl. ¶¶ 21, 34.) Bluestem thereafter

requested information from SCUSA, including the terms of the Castlelake Transaction
and other information related to selling the receivables, which SCUSA provided.
(Mitcham Decl. Exs. 9, 10, 13–19 (Docket Nos. 115-9, 115-10, 115-13–19).)1
This lawsuit followed in September 2022. Bluestem brings three claims: a breach
of contract claim, a violation of the Defend Trade Secrets Act, and a breach of the implied

covenant of good faith and fair dealing. SCUSA now moves for summary judgment as
to all of Bluestem’s claims.
DISCUSSION
Summary judgment is proper if there are no disputed issues of material fact and
the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The

Court must view the evidence and inferences that may be reasonably drawn from the
evidence in the light most favorable to the nonmoving party. Tolan v. Cotton,

572 U.S. 1

    Additional facts necessary to the Court’s analysis are set forth below. 
650, 660 (2014).  The moving party bears the burden of showing that there is no genuine 
issue of material fact and that it is entitled to judgment as a matter of law.  Celotex Corp. 

v. Catrett,

477 U.S. 317, 323

 (1986).  A party opposing a properly supported motion for 
summary judgment may not rest on mere allegations or denials but must set forth specific 
facts in the record showing that there is a genuine issue for trial.  Anderson v. Liberty 
Lobby, Inc.,

477 U.S. 242, 256

 (1986).  A dispute is genuine if the evidence could cause 
a reasonable jury to return a verdict for the nonmoving party.

Id. at 248

.  

A.   Breach-of-Contract Claim                                             
“[A] breach of contract claim requires proof of (1) an agreement, (2) adequate 
performance by the plaintiff, (3) breach by the defendant, and (4) damages.”  Fischer & 
Mandell, LLP v. Citibank, N.A.,

632 F.3d 793, 799

 (2d Cir. 2011) (citation omitted); see 
Espenschied Transp. Corp. v. Fleetwood Servs., Inc.,

422 P.3d 829, 833

 (Utah 2018).  “In 
interpreting a contract, . . . [w]ords and phrases are given their plain meaning.  Rather 

than rewrite an unambiguous agreement, a court should enforce the plain meaning of that 
agreement.”  Am. Exp. Bank Ltd. v. Uniroyal, Inc.,

164 A.D.2d 275, 277

 (N.Y. App. Div. 
1990) (internal citations omitted); see WebBank v. Am. Gen. Annuity Serv. Corp.,

54 P.3d 1139, 1145

 (Utah 2002) (quoting Cent. Fla. Invs., Inc. v. Parkwest Assocs.,

40 P.3d 599, 605

(Utah 2002) (“If the language within the four corners of the contract is

unambiguous, the parties’ intentions are determined from the plain meaning of the
contractual language, and the contract may be interpreted as a matter of law.”)).
Bluestem alleges that it had a “right of first refusal to buy back the receivables
owned by SCUSA in the event of non-renewal, such that SCUSA could not sell those
receivables to a third party on equal or less favorable terms that offered by Bluestem.”
(Am. Compl. ¶ 62.) But this alleged “right of first refusal” is not mentioned in the parties’

agreements. This may be why Bluestem now argues that it was the parties’ “intent” that
Bluestem could buy back the receivables before they could be sold to third parties.
SCUSA argues that the breach-of-contract claim fails as a matter of law because
it exercised its express contractual right to sell the receivables. Indeed, the SRSA is clear
that SCUSA owns the receivables and is “entitled to all of the rights, privileges, and
remedies applicable to said ownership interest, including the right to pledge, transfer,

sell, assign, exchange, or collect and receive payments . . . .” (SRSA § 3(a)(i).) This
section further grants SCUSA “the right to enter into a Loan or Securitization that
complies with Sections 3(f) and (g).” (Id.) Notably, Bluestem does not reference
§ 3(a)(i) in its memorandum opposing summary judgment. Rather, Bluestem argues that
SCUSA breached other aspects of the parties’ agreement in selling the receivables.

Bluestem first contends that SCUSA breached the agreements by preventing
Bluestem from presenting a bid to repurchase the receivables in the first instance. But
the agreements state that Bluestem’s right to “present a bid” only arises in the event that
SCUSA “delivers a notice of termination of the Program Agreement . . . or a Non-
Renewal Notice.” (SRSA Ex. A. § (a); PA Ex. Q § (a).) There is no dispute that the

Castlelake Transaction occurred before SCUSA delivered such a non-renewal notice.
(Am. Compl. ¶¶ 7–8, 24.) Bluestem does not reference any explicit contractual provision
indicating a right of first refusal or a restriction on SCUSA’s right to sell the receivables
before indicating to Bluestem that it would not renew the agreements. (See SRSA Ex. A.
§ (a); PA Ex. Q § (a).) Even so, the right to present a bid to purchase the receivables is
distinct from the right to purchase them. And the agreements state that “SCUSA shall

have no obligation to sell the Receivables Package to [Bluestem] or its Nominated
Purchaser,” meaning that the bid process was not intended to be binding. (SRSA Ex. A.
§ (b); PA Ex. Q § (b).)
Bluestem’s reliance on parol evidence to establish the parties’ intent contrary to
the agreements’ plain language is in vain. The SRSA explicitly states that “the Program
Documents . . . supersede any prior or contemporaneous negotiations . . . with regard to

the same subject matter.” (SRSA § 24.) As a result, any pre-agreement discussions are
irrelevant to the parties’ rights and obligations under the agreements. Further, the
agreements are not ambiguous and do not require extrinsic evidence to determine their
meaning. See Tangren Fam. Tr. v. Tangren,

182 P.3d 326, 330

 (Utah 2008) (quoting 
Hall v. Process Instruments & Control, Inc.,

890 P.2d 1024, 1026

 (Utah 1995) (“[I]f a 

contract is integrated, parol evidence is admissible only to clarify ambiguous terms; it is 
‘not admissible to vary or contradict the clear and unambiguous terms of the contract.’”)); 
Intercontinental Plan., Ltd. v. Daystrom, Inc.,

24 N.Y.2d 372, 379

 (N.Y. 1969) (“[I]t is 
. . . well settled that extrinsic and parol evidence is not admissible to create an ambiguity 
in a written agreement which is complete and clear and unambiguous upon its face.”). 

Second,  Bluestem  argues  that  § 3(g)  restricted  SCUSA’s  ability  to  sell  the 
receivables.  In relevant part, § 3(g) states that:                       
SCUSA shall use its reasonable best efforts not to structure any Loan or 
Securitization or otherwise encumber the Purchased Receivables . . . in 
such a way that . . . if SCUSA [accepts a Bluestem bid, Bluestem’s] rights 
to purchase all of such related Program Assets . . . would be encumbered, 
impaired or delayed.                                                 
(Pls.’ Mem. in Opp’n at 35 (quoting SRSA § 3(g)(i)).)  Bluestem contends that the 
parties’ use of “encumber” in § 3(g)(i) suggests “the parties plainly intended a broader 
definition, like ‘impede or hinder,’ ‘make it difficult for someone to do something,’ or 
‘weight down, burden.”  (Id. at 36 (footnotes omitted).)  However, § 3(a)(i) of the SRSA 
explicitly grants SCUSA the right to “transfer, sell, [or] assign” the receivables.  (SRSA 
§ 3(a)(1).)  Moreover, Bluestem’s view overlooks that § 3(g) is an exception to § 3(f), 

which concerns loans and securitizations.  Therefore, § 3(g) of the SRSA does not restrict 
sales,  and  there  is  no  dispute  that  the  Castlelake  Transaction  was  not  a  loan  or 
securitization, such that this exception would apply.                     
Third, Bluestem contends that § 11 of the SRSA prohibits assignment of the 
receivables.  To the contrary, § 11 states that it “shall not restrict SCUSA’s ability to 

transfer the Purchased Receivables or its rights and obligations under this Agreement or 
implement a Loan or Securitization, subject to Section 3(f).”  (Id. § 11.)   
Fourth, Bluestem argues that SCUSA failed to “cooperate in effectuating [a] 
repurchase by Bluestem” and “provide all information about the assets that Bluestem 
reasonably  sought.”    (Am.  Compl.  ¶¶ 36,  37.)    However,  SCUSA’s  contractual 

obligations to provide such information arise only if SCUSA accepts Bluestem’s bid to 
repurchase the receivables, which did not occur here.  (SRSA Ex. A §§ (a)–(e); PA Ex. Q 
§§ (a)–(e).)  The Court is likewise unpersuaded by Bluestem’s argument that SCUSA 
failed to reasonably cooperate with the transfer of the receivables, including relevant 
information relating to the transfer.  Again, SCUSA’s duty to transfer information to 
Bluestem only arose if SCUSA accepted a bid from Bluestem, which did not occur.   

Bluestem has not raised a material fact in dispute regarding its breach-of-contract 
claim, and SCUSA’s Motion is granted as to this claim.                    
B.   Defendant Trade Secrets Act Claim                                    
Bluestem alleges that SCUSA violated the Defend Trade Secrets Act (“DTSA”) 
by impermissibly providing Bluestem’s trade secrets, financial information, and other 
Bluestem information to Castlelake and others related to the Castlelake Transaction.  

(Am. Compl. ¶¶ 45, 48–49.)  The Defend Trade Secrets Act creates a private cause of 
action for the “owner of a trade secret that is misappropriated . . . if the trade secret is 
related to a product or service used in, or intended for use in, interstate or foreign 
commerce.”

18 U.S.C. § 1836

(b)(1).  A trade secret includes:             
all forms and types of financial, business, scientific, technical, economic, 
or  engineering  information,  including  patterns,  plans,  compilations, 
program  devices,  formulas,  designs,  prototypes,  methods,  techniques, 
processes, procedures, programs, or codes, whether tangible or intangible, 
and  whether  or  how  stored,  compiled,  or  memorialized  physically, 
electronically, graphically, photographically, or in writing if—     
     (A) the owner thereof has taken reasonable measures to keep such 
         information secret; and                                     
     (B) the information derives independent economic value, actual or 
         potential, from not being generally known to, and not being 
         readily ascertainable through proper means by, another person 
         who can obtain economic value from the disclosure or use of 
         the information[.]

Id.

§ 1839(3). Under the DTSA, “misappropriation” includes “disclosure or use of a trade
secret of another without express or implied consent . . . us[ing] improper means to
acquire knowledge of the trade secret.” Id. § 1893(5)(B)(i). “‘[I]mproper means’
includes . . . breach or inducement of a breach of a duty to maintain secrecy.” Id.

§ 1893(6)(A). Here, Bluestem alleges that “SCUSA misappropriated [Bluestem’s] trade
secrets, by use of improper and unlawful means, in breach of an express promise of
confidentiality to Bluestem.” (Am. Compl. ¶ 58.)
Bluestem’s DTSA claim fails as a matter of law because it is based on SCUSA’s
alleged breach of the agreements’ confidentiality provisions, which explicitly allowed for
the disclosures.

Section 3(c)(xii) of the SRSA allowed SCUSA to provide a potential purchaser of
the receivables with Bluestem’s confidential information “as may reasonably be required
. . . to evaluate its . . . purchase and investment, provided that such purchaser enters into
a confidentiality agreement with SCUSA or the subsequent purchaser (if applicable) that
is substantially similar to the confidentiality provisions in this Agreement.” (SRSA

§ 3(c)(xii).) SCUSA correctly argues that the records it disclosed to Castlelake fall
squarely within that provision, and that there is no dispute that Castlelake was a “potential
purchaser” of the receivables.
Bluestem contends SCUSA further breached the agreements by providing
Castlelake with more than merely “data tape” information—“anonymized account

balance information”—as the PA allows. (Pls.’ Mem. in Opp’n at 8.) Indeed, § 14 of
the PA states that “[i]n the event that SCUSA has a right to sell the Purchased
Receivables . . . SCUSA may . . . provide Data Tape Information to a potential
purchaser . . . of such Receivables . . . as may reasonably be required by such purchaser
or lender to evaluate such purchase or loan,” so long as SCUSA entered into a
confidentially agreement with that the potential purchaser, among other requirements.

(PA § 14(a).) It is undisputed that SCUSA and Castlelake entered into a confidentiality
agreement. (Mitcham Decl. Exs. 3–5 (Docket Nos. 115-3–5).) As SCUSA maintains,
this clause is permissive. Contrary to Bluestem’s assertions, the PA does not say that
SCUSA may “only” share data tape information. (Am. Compl. ¶ 47.) Indeed, the PA
allowed for disclosure of additional information: “In the event that SCUSA has a right to
sell the Purchased Receivables . . . the Parties acknowledge that SCUSA may provide

related Borrower information to a potential purchaser . . . of such Receivables . . . as may
reasonably be required by such a purchaser . . . to evaluate such purchase,” provided that
SCUSA abides by some restrictions, including that the potential purchaser must sign a
confidentially agreement. (PA § 11(c)(3).)
Bluestem again attempts to rely on extrinsic evidence of SCUSA’s conduct to

demonstrate breach, but because the contracts are not ambiguous, the Court cannot
consider that evidence.
Bluestem lastly argues that because some of the documents that SCUSA shared
with Castlelake may have been unnecessary to effectuate the sale, the Court must review
each document to determine whether a breach occurred. However, even if SCUSA

provided extraneous documents to Castlelake, Bluestem fails to identify any resulting
damages, which are required for the claim to proceed. See Phyllis Schlafly Revocable
Tr. v. Cori, No. 4:16CV01631 JAR,

2016 WL 6611133

, at *2 (E.D. Mo. Nov. 9, 2016) 
(“In order to prevail on a claim for misappropriation of a trade secret, a plaintiff must 
show: (1) the existence of a protectable trade secret; (2) misappropriation of those trade 
secrets by the defendant; and (3) damages.”).                             

Bluestem fails to point to any material fact in dispute.  SCUSA’s Motion is granted 
as to the DTSA claim.                                                     
C.   Breach-of-Good-Faith-and-Fair-Dealing Claim                          
Bluestem further alleges that SCUSA breached the implied covenant of good faith 
and fair dealing by depriving Bluestem of its rights under the contracts.  (Am. Compl. 
¶¶ 68–76.)  “A cause of action to recover damages for breach of the implied covenant of 

good faith and fair dealing cannot be maintained where the alleged breach is ‘intrinsically 
tied to the damages allegedly resulting from a breach of the contract.’”  Deer Park Enters., 
LLC v. Ail Sys., Inc.,

57 N.Y.S.2d 89

, 90 (N.Y. App. Div. 2008) (quoting Canstar v. J.A. 
Jones Const. Co.,

622 N.Y.S.2d 730, 731

 (N.Y. App. Div. 1995); see Canopy Corp. v. 
Symantec Corp.,

395 F. Supp. 2d 1103, 1111

 (D. Utah 2005) (“To state a separate claim, 

[Plaintiff]  must  demonstrate  some  implied  promise  separate  from  a  breach  of  the 
Agreement’s term provision that could support this cause of action.”).  Bluestem alleges 
that SCUSA acted in bad faith but fails to demonstrate that SCUSA was not merely 
exercising its express rights under the agreements.  Therefore, SCUSA’s Motion is 
granted as to this claim as well.                                         
CONCLUSION                                                                
Accordingly, IT IS HEREBY ORDERED that:                              

1.   Defendant SCUSA’s Motion for Summary Judgment (Docket No. 101) is 
     GRANTED;                                                        
2.   Defendant  SCUSA’s  Motions  to  Exclude  Expert  Testimony  (Docket 
     Nos. 118, 128) are DENIED as moot; and                          
3.   This matter is DISMISSED with prejudice.                        

LET JUDGMENT BE ENTERED ACCORDINGLY.                                 
Date:  November 21, 2024            s/Paul A. Magnuson                    
                              Paul A. Magnuson                       
                              United States District Court Judge