# Durbin v. Carrols Corporation

> District Court, S.D. Illinois · January 13, 2020

URL: https://www.frixlaw.com/law-library/cases/10151394

## Case

- **Court:** District Court, S.D. Illinois
- **Decided:** January 13, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10151394

## How later opinions describe it (automated extraction)

- finding that bare procedural violation of BIPA did not satisfy Article III concreteness requirement for standing
- finding that “disclosure [of biometric information] can create irreparable harm.”
- finding reference to arbitration rules met “clear and unmistakable evidence” test to delegate arbitrability, but reserving other jurisdictional issues for the court
- declining to review the scope of a discovery order issued by district court before ruling on a motion to compel arbitration

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
HAILEY DURBIN, individually and on
behalf of all others similarly situated,
Plaintiff,
Case No. 3:19-CV-1212-NJR
v.
CARROLS CORPORATION,
Defendant.
MEMORANDUM AND ORDER
ROSENSTENGEL, Chief Judge:
Pending before the Court is a Motion to Stay Briefing on Defendant’s Motion to
Compel Arbitration and to Allow Limited Discovery filed by Plaintiff Hailey Durbin
(Durbin) (Doc. 17). For the reasons set forth below, the Court denies the motion.
FACTUAL & PROCEDURAL BACKGROUND
This action arises out of Durbin’s employment with Defendant Carrols

Corporation (“Carrols”), an operator of numerous Burger King franchises (Doc. 1 at 1).
Specifically, Durbin argues that Carrols’s collection of her fingerprints and the
fingerprints of other employees of Carrols was a violation of employees’ rights under the
Illinois Biometric Information Privacy Act (“BIPA”) (Id.).
Durbin was an employee of Carrols in Illinois (Doc. 1 at 7). Durbin alleges that as

part of her employment, her fingerprints were scanned by Carrols and stored in at least
one database maintained by Carrols (Id.). Durbin further alleges that she was required to
scan her fingerprints at the beginning and end of each workday (Id.). As a condition of
her employment, Durbin also executed the Agreement for Resolution of Disputes
Pursuant to Binding Arbitration Between Carrols Corporation and Hailey N. Durbin

(“Arbitration Agreement”) (Doc. 17, Ex. D). This agreement specifies that all disputes
arising out of Durbin’s employment with Carrols will be resolved through arbitration
under current rules set by JAMS, a national arbitration association (Id. at 2). The few
exceptions listed in the Arbitration Agreement include the caveat that “the parties reserve
the right to go to court if they are faced with the risk of irreparable harm, such as the
disclosure of confidential information” (Id.).

In 2008, Illinois enacted BIPA, with the Illinois General Assembly finding that
“[t]he public welfare, security, and safety will be served by regulating the collection, use,
safeguarding, handling, storage, retention, and destruction of biometric identifiers and
information.” 740 ILL. COMP. STAT. 14/5. BIPA requires that private entities seeking to
collect individual biometric information must first obtain the written informed consent

of the subject. 740 ILL. COMP. STAT. 14/15. Since the passage of BIPA, decisions of certain
courts interpreting BIPA have found that some violations of the statute may raise the risk
of irreparable harm, while other “bare procedural violations” may not raise any risk of
material harm. Compare Sekura v. Krishna Schaumburg Tan, Inc., 115 N.E.3d 1080, 1095 (Ill.
App. Ct. 2018) (finding that “disclosure [of biometric information] can create irreparable

harm.”), with Rivera v. Google, Inc., 366 F. Supp. 3d 988, 1004–05 (N.D. Ill. 2018) (finding
that bare procedural violation of BIPA did not satisfy Article III concreteness requirement
for standing).
On November 4, 2019, Durbin filed this suit, alleging that Carrols’s practices
violated BIPA and violated the rights of Durbin and a class of Carrols’s employees to

privacy in their biometric information as set forth in BIPA (Doc. 1 at 2). Two days later,
on November 6, 2019, Durbin also filed a complaint with the National Labor Relations
Board (“NLRB Complaint”) challenging the Arbitration Agreement on the grounds that
it did not note that employees retained the right to bring complaints before the NLRB
arising out of alleged violations of the National Labor Relations Act (“NLRB”) (Doc. 17,
Ex. B). On November 21, 2019, Carrols’s counsel wrote to Durbin offering to delete the

biometric information retained by Carrols (Doc. 22, Ex. 2). Durbin’s counsel responded
on the same day with a list of questions that it stated were necessary to assess counsel’s
offer to delete Durbin’s biometric information (Doc. 22, Ex. 3). To date, Carrols still retains
Durbin’s biometric information (Doc. 22, pg. 12-13).
On November 26, 2019, Carrols filed a Motion to Compel Arbitration and Dismiss

Action pursuant to the Arbitration Agreement signed by the parties (“Motion to
Compel”) (Doc. 13). On December 9, 2019, Durbin filed the instant motion, requesting
(1)an extension of time until January 30, 2020, to respond; (2) a 90-day stay of Durbin’s
response pending decision on the NLRB Complaint; and (3) limited discovery in the form
of specific interrogatories from the Carrols related to the storage and transmission of her

biometric data (Doc. 17). Because Carrols did not oppose the extension of time, the Court
granted the extension until January 30, 2020, and reserved ruling on issues (2) and
(3)(Doc. 18).
ANALYSIS
I. Durbin’s Request for Limited Discovery
A. Applicable Law

The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq., governs the
interpretation of arbitration agreements in federal courts. The Supreme Court has
explained that “the overarching purpose of the FAA . . . is to ensure the enforcement of
arbitration agreements according to their terms so as to facilitate streamlined
proceedings.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 344 (2011). In light of this

purpose, courts have consistently interpreted the FAA as establishing a federal policy
favoring the broad validity and enforceability or arbitration agreements. E.g., Id. at 346;
Kiefer Specialty Flooring v. Tarkett, Inc., 174 F.3d 907, 909 (7th Cir. 1999) (“[S]trong support
for the federal policy favoring arbitration exists.”).
Sections 3 and 4 of the FAA describe procedures through which federal courts

implement arbitration agreements, stating that courts “shall” stay proceedings and order
arbitration upon confirming the existence of an enforceable arbitration agreement that
covers the dispute at hand. In determining whether parties formed an agreement to
arbitrate and agreed to arbitrate particular issues, courts generally should apply ordinary
state-law principles of contract interpretation. First Options of Chicago, Inc. v. Kaplan, 514
U.S. 938, 944 (1995). In practice, however, courts have held repeatedly that even threshold

issues such as the arbitrability of the dispute may be subject to the arbitration if the
language of a broadly-worded agreement specifically includes arbitrability and
jurisdiction among the subjects delegated to the arbiter. In assessing whether parties have
agreed to delegate the issue of arbitrability to an arbitrator, however, courts should not
assume delegation unless there is “clear and unmistakable evidence” that the parties

intended to arbitrate the issue of arbitrability. Id. Nevertheless, if the issue of arbitrability
itself is not arbitrable, any doubts concerning the scope of arbitrable issues should be
resolved by the court in favor of arbitration, and a district court cannot deny a request to
arbitrate “unless it may be said with positive assurance that the arbitration clause is not
susceptible of an interpretation that covers the asserted dispute.” Kiefer Specialty Flooring,
174 F.3d at 909.

Courts have not fully clarified the extent of discovery that may be permissible in
order to assess arbitrability. Gore v. Alltel Communications, LLC, 666 F.3d 1027, 1032 n.1
(7th Cir. 2012) (declining to review the scope of a discovery order issued by district court
before ruling on a motion to compel arbitration). However, any such discovery would
have to comply with the provisions of the FAA requiring that decisions regarding the

existence of applicable arbitration agreements be conducted “summarily,” as well as “the
unmistakably clear congressional purpose that the arbitration procedure . . . be speedy
and not subject to delay and obstruction.” Merit Ins. Co. v. Leatherby Ins. Co., 581 F.2d 137,
142 (7th Cir. 1978). To allow extensive discovery prior to obtaining a ruling on arbitration
would defeat the purpose of arbitration agreements and go against the broad, pro-

arbitration policy of the FAA.
B. Discussion
In the Motion, Durbin argues that Carrols should be ordered to answer
interrogatories prior to the time that she responds to the Motion to Compel. Durbin cites
case law indicating that violations of BIPA relating to biometric data may create a risk of
irreparable harm. While noting that Carrols has indicated the existence of BIPA policy

and offered to delete Durbin’s biometric data, Durbin argues that she may be at risk of
irreparable harm which would remove her dispute from the scope of the arbitration
agreement. To determine whether the dispute is in fact arbitrable, Durbin states that
further information regarding Carrols’s storage and management of biometric data is
required to assess the potential for irreparable harm.
This presents the Court with an issue of arbitrability under the Arbitration

Agreement—the Court must determine first whether the issue of arbitrability is itself
subject to arbitration under the terms of the agreement, in which case this court should
not consider it further. If arbitrability is not a subject of arbitration, the Court must assess
whether there is no interpretation of the Arbitration Agreement that could be said to
cover the dispute between the parties, and whether the limited discovery requested by

Durbin would aid in this assessment or would merely delay and inhibit the arbitration
procedure agreed upon by the parties in the Arbitration Agreement.
Carrols notes that the JAMS rules for arbitration are specifically mentioned in the
Arbitration Agreement, which states that arbitration shall be conducted under “the then
current JAMS rules” and that “[the employee] has been told that JAMS’ rules for

arbitration . . . are available at www.jamsadr.com or upon request from a manager[.]”
(Doc. 22, Ex. 1, p. 19). Based on this language, Carrols argues that the JAMS rules,
including JAMS Rule 11(b) granting the arbitrator authority to rule on issues of
arbitrability, are incorporated by reference. A number of courts have in the past
considered the issue of whether incorporation by reference is sufficient to delegate
arbitrability to an arbitrator. E.g., Preston v. Ferrer, 552 U.S. 346, 357 (2008) (indicating that

arbitration rules may generally be incorporated by reference); Awuah v. Coverall North
America, Inc., 554 F.3d 7, 14 (1st Cir. 2009) (finding reference to arbitration rules met “clear
and unmistakable evidence” test to delegate arbitrability, but reserving other
jurisdictional issues for the court). Overall, existing case law seems to favor a finding that
incorporation of arbitration rules by reference provides clear and unmistakable evidence
of an intent to delegate the threshold question of arbitrability to the arbitrator. Under this

interpretation of the Arbitration Agreement, it would be improper for this court to allow
further discovery into the issue, which the parties agreed to reserve for decision by an
arbitrator.
Even if the reference to JAMS rules were not sufficient to delegate the issue of
arbitrability to the arbitrator, the Court still could not justify ordering the limited

discovery requested by Durbin. The Court cannot deny a request to arbitrate “unless it
may be said with positive assurance that the arbitration clause is not susceptible of an
interpretation that covers the asserted dispute.” Kiefer Specialty Flooring, 174 F.3d at 909.
Here, the Arbitration Agreement preserves the right to go to court “if parties are faced
with the risk of irreparable harm[.]” (Doc 22, Ex. 1, p. 19). Courts have ruled, however,

that violations of BIPA in many cases may not give rise to injuries that are material, and
Durbin has alleged only procedural violations of BIPA without specific, individualized
harm to herself or any other members of the proposed class. Durbin’s questions for
Carrols deal solely with the scope and procedures for data retention, not with any harm
to Durbin or the proposed class beyond the procedural violations of BIPA alleged in the
complaint. These questions do not appear capable of eliciting further proof of any harm

to Durbin that might so clearly rise to the level of irreparable harm as to leave the
Arbitration Agreement incapable of interpretation in a manner that would cover this
dispute. Further, the possibility of any future irreparable harm is mitigated by the fact
that Carrols has already offered to delete Durbin’s biometric information, thus removing
the necessity of the equitable relief that the Arbitration Agreement appears to
contemplate. Durbin’s request for limited discovery is denied.

II. Durbin’s Request for a Stay Pending Decision on the NLRB Complaint
A. Applicable Law
A district court has inherent power to exercise discretion to stay proceedings.
Landis v. North American Co., 299 U.S. 248, 255 (1936); Texas Independent Producers and
Royalty Owners Ass’n v. EPA, 410 F.3d 964, 980 (7th Cir. 2005). In exercising this power,

the Court must weigh competing interests and consider the economy of time and effort
for itself, counsel, and litigants. Landis, 299 U.S. at 255. In considering whether to stay
arbitration, however, the Court must not allow discretionary considerations to frustrate
the strong federal policy in favor of arbitration. Dickinson v. Heinold Securities, Inc., 661
F.2d 638, 644 (7th Cir. 1981) (citing C. Itoh. & Co. v. Jordan International Co., 552 F.2d 1228,

1231 (7th Cir. 1977)). Courts have held that where disputes involve both arbitrable and
non-arbitrable claims, the FAA requires district courts to compel arbitration of pendent
arbitrable claims “even where the result would be the possibly inefficient maintenance of
separate proceedings in different forums.” Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213,
217 (1985); Dickinson, 661 F.2d at 646.
B. Discussion

Here, Carrols argues that the claims in Durbin’s NLRB Complaint are in fact
arbitrable. But even if this were not the case, precedent clearly shows that the pendency
of a separate non-arbitrable issue in a different forum is not sufficient reason to stay
arbitration over arbitrable claims. Furthermore, even if this court were to consider
matters of efficiency in debating whether or not to stay arbitration, it does not appear that

a three-month stay would be beneficial for economy of time and effort. The challenges to
the Arbitration Agreement in the NLRB Complaint relate to that agreement’s silence on
employees’ rights to bring claims before the NLRB alleging violations of the NLRA. The
claim brought by Durbin in this forum arises under BIPA, not the NLRA, and even if the
NLRB were to rule in favor of Durbin, the NLRB precedents cited by Durbin indicate that

the likely outcome would be mere revision of the Arbitration Agreement to specifically
mention the right to bring claims before the NLRB. Cedars-Sinai Medical Center, 368 NLRB
No. 83 at 3 (Sept. 30, 2019) (ordering the employer to “rescind . . . or revise [the arbitration
agreement”) (emphasis added); Beena Beauty Holding, Inc., 368 NLRB No. 91 (Oct. 8, 2019)
(ordering the employer to “rescind [the arbitration agreement] or revise it”) (emphasis

added). This would not affect the arbitrability of the issue before this court, and there is
no indication that the NLRB will make such a ruling within the three-month window
sought by Durbin in her request for a stay. Durbin’s request for a stay is denied.
CONCLUSION
For the reasons set forth above, the Court DENIES the Motion to Stay Briefing on
Carrols’s Motion to Compel Arbitration and to Allow Limited Discovery (Doc. 17) filed by
Durbin. Durbin shall respond to Carrols’s Motion to Compel by the end of the extension
of time on January 30, 2020.
IT IS SO ORDERED.
DATED: January 13, 2020
Thee Moet?
NANCY J. ROSENSTENGEL
Chief U.S. District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10151394. Public record. Not legal advice.