ADR and Mediation

Dist. Ct. did not err in denying defendant’s motion to compel arbitration on plaintiffs’ lawsuit under circumstances, where: (1) plaintiffs’ guardians activated DNA test kits on behalf of plaintiffs-minor children; (2) registered users of defendant’s website was required to first agree to arbitration clause to resolve disputes; and (3) when another entity acquired defendant, plaintiffs alleged in instant lawsuit that their privacy rights were violated by disclosing their genetic information to third-party in violation of Illinois Genetic Information Privacy Act. Dist. Ct. could properly find that arbitration clause agreed to by guardians did not apply to plaintiffs, as plaintiffs did not activate their own DNA test kit or otherwise independently engage in defendant’s services. Moreover, there was no allegation that plaintiffs had actually accessed their guardian’s Ancestry accounts or their DNA test results. Ct of Appeals also rejected defendant’s claim that: (1) plaintiffs were closely related parties for purposes of being bound by arbitration clause; and (2) concept of direct benefit estoppel applied, where there was no allegation that plaintiffs had accessed defendant’s analysis of plaintiffs' DNA.

Dist. Ct. erred in granting defendant-PayPal and others’ motion to compel arbitration in plaintiff’s claim that PayPal mishandled charity donations she made through her PayPal account. While terms of plaintiff’s PayPal account did not include mandatory arbitration clause at time plaintiff became account-holder, record showed that PayPal had amended terms of its account in 2012 to include mandatory arbitration clause and, according to defendants, PayPal emailed plaintiff with notice of mandatory arbitration clause, as well as gave plaintiff timeframe to close her account if she objected to said clause. However, Dist. Ct. could not find that plaintiff had received said notice and opportunity to opt out, where plaintiff flatly denied receiving said email or otherwise agreeing to inclusion of mandatory arbitration clause as part of terms of her account. As such, plaintiff’s denial precluded Dist. Ct. from resolving factual dispute via motion to compel and required Dist. Ct. to set matter for trial.

Dist. Ct. did not err in denying plaintiff’s request for vacatur of arbitrator’s decision rejecting plaintiff’s claim that defendant-employer violated Americans with Disabilities Act by failing to accommodate him after he suffered work-related injuries. While plaintiff contended that said decision should be set aside, where arbitrator improperly required proof of discriminatory intent in order for plaintiff to prevail on his claim, record showed that arbitrator could consider discriminatory animosity and intent when considering any fault on part of both parties in interactive dialogue process. As such, plaintiff could not show that arbitrator exceeded his authority. Moreover, Ct. emphasized that claim to set aside arbitrator’s decision under 9 USC section 10(a)(4) cannot prevail where losing party merely argues that arbitrator misapplied applicable law.

Dist. Ct. did not err in denying defendant-union’s motion to compel arbitration of plaintiff-employer’s action under section 301 of Labor Management Relations Act, alleging that union’s two strikes violated non-strike provisions of collective bargaining agreement (CBA). While CBA had arbitration clause, said clause applied only to employee-initiated grievances. As such, plaintiff was not obligated to submit instant dispute to arbitration.

Dist. Ct. did not err in denying defendant’s request to refer to arbitration plaintiff’s class action lawsuit alleging violations of section 15 of Illinois Biometric Privacy Act. Record showed that: (1) defendant provided to third-party identity-verification services involving plaintiff and others, under circumstances where plaintiff and others sought to lease vehicles from third-party; and (2) defendant sought to invoke arbitration clause found in contract between plaintiff and third-party. While arbitration clause in contract between plaintiff and third-party covered disputes between plaintiff, third-party, and “beneficiaries of services or goods provided” under said contract, Dist. Ct. could properly find that suppliers of services to third-party, such as defendant, were not covered under arbitration clause. Ct. of Appeals, in affirming Dist. Ct., rejected defendant’s claim that instant dispute with plaintiff was covered under arbitration clause, because it was “beneficiary of services provided’ under contract between plaintiff and third-party, where Ct. found that “services” at issue in contract between plaintiff and third-party dealt with services to third-party’s customers and not to services supplied to third-party. Ct. also noted that it was difficult to find that plaintiff was required to arbitrate instant dispute, where defendant did not have any contract with plaintiff.

Dist. Ct. did not err in denying defendant’s motion to arbitrate parties’ dispute regarding defendant’s use of plaintiff’s software license used to provide estimates of costs to repair cars and trucks, where Dist. Ct. noted that defendant was not party to contract that contained said arbitration clause. Plaintiff alleged that: (1) employee of defendant falsely represented to plaintiff that he represented independent appraiser seeking plaintiff’s software license; (2) defendant’s employee agreed not to assign his rights to license to anyone else; and (3) defendant’s employee then gave software package to defendant. Ct. of Appeals found that defendant could not obtain any rights to subject contract, including arbitration clause, where it was not party to contract and was not otherwise third-party beneficiary, Moreover, instant contract demonstrated that identity of plaintiff’s trading partner was vital element of instant contract.

In action seeking to enforce through turnover order arbitrator’s $650,000 award in favor of plaintiff, Dist. Ct. erred in finding that defendant could choose to pay $500,000 portion of said award out of his future stock dividends, as well as his estate after his death. While arbitrator stated that plaintiff could satisfy instant $500,000 obligation “in such manner as plaintiff chooses,” arbitrator's award lacked any indication that arbitrator granted defendant complete discretion to decide if, when and how defendant would pay award during his lifetime. As such, plaintiff could use instant request for turnover order to satisfy this portion of arbitrator’s award. Also, Dist. Ct. did not err in directing defendant to turn over stock in plaintiff’s company to satisfy remaining $150,000 of arbitrator’s award, where, contrary to defendant’s contention, award failed to contain any language indicating that defendant remain as shareholder in plaintiff’s company.

Dist. Ct. did not err in dismissing in favor of arbitration plaintiff’s action alleging that defendant’s Snapchat service violated Illinois Biometric Privacy Act, where plaintiff’s Snapchat account contained arbitration clause. Record showed that plaintiff signed up for her Snapchat account when she was 11, under circumstances where defendant specified that persons must be 13 to have account. Plaintiff argued that because arbitration is matter of contract formation, judges, as opposed to arbitrators, must decide that contract has been formed before they may order arbitration, and that, as current minor, she could not form any contract. Ct. of Appeals, though, found that: (1) under Illinois law, plaintiff’s minor status merely made instant contract voidable, which could be ratified by plaintiff; (2) Illinois law treats age of contracting parties as defense to enforcement of contract; and (3) plaintiff’s potential defense must properly be decided by arbitrator. Ct. similarly noted that youth is defense to contract enforcement, as opposed to impediment to contractual formation.

Dist. Ct. erred in denying defendant-employer’s request to refer plaintiff-employee’s employment-related action to arbitration pursuant to arbitration clause contained in parties’ employment agreement. Although defendant did not contest Dist. Ct.’s finding that aspects of arbitration clause requiring plaintiff to bear all costs of arbitration, while defendant was permitted to select arbitrator and location of arbitration were unenforceable because they were too favorable to defendant, Dist. Ct. could not find that entire clause was unenforceable, where: (1) agreement reflected that both parties had agreed to arbitrate instant dispute; (2) agreement could be enforced without portions of agreement that Dist. Ct. found were too favorable to defendant; (3) decision on who pays for arbitration could be resolved by federal statute that formed basis of plaintiff’s claim; and (4) arbitration rules allowed Dist. Ct. to select arbitrator for arbitration that would occur in same judicial distract as instant litigation. As such, case was remanded with directions for Dist. Ct. to select arbitrator and to refer dispute to arbitration.