Coons v. Yum! Brands, Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ILLINOIS

KIMBERLY COONS, Individually

and on Behalf of All Others

Similarly Situated,

Plaintiff,

Case No. 21-CV-45-SPM

v.

YUM! BRANDS, INC., TACO BELL

FRANCHISOR, LLC, YUM

RESTAURANT SERVICES GROUP

LLC, TACO BELL CORP.

Defendants.

MEMORANDUM & ORDER

McGLYNN, District Judge:

Plaintiff Kimberly Coons (“Coons”) brings a purported class action against

defendants Yum! Brands, Inc. (“Yum!”), Taco Bell Franchisor, LLC. (“TBF”), Yum

Restaurant Services Group (“YRSG”), and Taco Bell Corp. (“TBC”) for alleged violations

of the Illinois Biometric Privacy Act (“BIPA”), codified at 740 ILCS §14/1, et seq. Pending

before the Court are three (3) separate motions: (1) Motion to Dismiss pursuant to Rule

12(b)(2) of the Federal Rules of Civil Procedure filed by Yum and YRSG (Doc. 103); (2)

Motion to Compel Arbitration pursuant to the Federal Arbitration Act (“FAA”) filed by

Yum!, YRSG, TBF, and TBC (Doc. 107); and, (3) Motion to Dismiss pursuant to Rules

12(b)(6) and 12(b)(7) of the Federal Rules of Civil Procedure, filed by all four defendants

in the alternative to the prior two motions (Doc. 109). For the reasons set forth below,

the Court GRANTS the motion to compel arbitration, and further stays this case,

including resolution of the motions to dismiss, pending the outcome of the arbitration.

The Illinois Biometric Information Privacy Act

The Illinois General Assembly enacted the Illinois Biometric Information Privacy

Act (“BIPA”), in 2008 to protect a person’s privacy interests in his “biometric identifiers”,

which includes fingerprints, retina and iris scans, hand scans and facial geometry. 740

ILCS 14/1, et seq. (2008); Fox v. Dakkota Integrated Systems, LLC., 980 F.3d 1146 (2020).

BIPA was created in response to the growing use of biometrics “in the business and

security screening sectors”. 740 ILCS 14/5. In fact, the legislative findings refer to the

immutability of biometric identifiers and the risk of identity theft, and state the

following, “Biometrics are unlike other unique identifiers that are used to access

finances or other sensitive information. For example, social security numbers, when

compromised, can be changed. Biometrics, however, are biologically unique to the

individual; therefore, once compromised, the individual has no recourse, is at

heightened risk for identity theft, and is likely to withdraw from biometric-facilitated

transactions.” 740 ILCS 14/5(c). Because “the full ramifications of biometric technology

are not fully known”, the General Assembly found that “the public welfare, security, and

safety will be served by regulating the collection, use, safeguarding, handling, storage,

retention, and destruction of biometric identifiers and information.” Id. §§14/5 (f)-(g).

Section 15 of the Act comprehensively regulates the collection, use, retention,

disclosure and dissemination of biometric identifiers. 740 ILCS 14/15. Specifically, §

15(a) of BIPA states:

“A private entity in possession of biometric identifiers or information must

develop a written policy, made available to the public, establishing a

retention schedule and guidelines for permanently destroying biometric

identifiers and biometric information when the initial purpose for

collecting or obtaining such identifiers or information has been satisfied or

within 3 years of the individual’s last interaction with the private entity,

whichever comes first.” 740 ILCS 15/15(a).

Section 15(b) of the Act deals with informed consent and prohibits private entities

from collecting, capturing, or otherwise obtaining a person’s biometric identifiers or

information without the person’s informed written consent. Id. § 15(b). In other words,

the collection of biometric identifiers or information is barred unless the collector first

informs the person “in writing of the specific purpose and length of term for which the

data is being collected, stored, and used” and “receives a written release” from the

person or his legally authorized representative. Id.

PROCEDURAL BACKGROUND

On January 31, 2021, Coons filed her initial class action complaint against Yum!

“to put a stop to its unlawful collection, use, and storage of Plaintiff’s … sensitive

biometric identifiers and biometric information”, “to have Defendants return and

destroy the biometric information”, and “to issue a written retention policy” (Doc. 1). On

March 17, 2021, Yum! filed its first motion to dismiss (Doc. 21). However, prior to

proceeding on this motion, the parties stipulated to plaintiff filing an amended

complaint and to a briefing schedule regarding the amended pleading (Doc. 28).

On April 28, 2021, Coons filed her amended complaint against Yum!, and also

asserted causes of action against TBF and Bell American Group, LLC (“Bell”) (Doc. 30).

Within the amended complaint, Coons asserted that Yum! and TBF directly violated

BIPA, and acted as joint employers with Bell (Id.).

On July 20, 2021, Bell filed a motion to compel arbitration and supporting

memorandum of law, referring to an executed copy of Bell’s Dispute Resolution Program

(Docs. 47, 48). On that same date, Bell filed a motion and supporting memorandum to

dismiss, or in the alternative, stay the case (Doc. 50, 51). Defendants Yum! and TBF

also filed a motion to dismiss along with their supporting memorandum (Docs. 49, 52).

On September 20, 2021, Coons sought leave to voluntarily dismiss defendant Bell

(Doc. 61). On November 29, 2021, oral argument was conducted before the Court at

which time the parties also discussed the future handling of this case. On November 30,

2021, the Court entered an Order advising the parties of the proper way to dismiss

and/or add a party or claim (Doc. 70).

On January 1, 2022, Coons filed her second amended complaint, which was

brought against TBF and Yum! (Doc. 73). It is important to note that Bell was no longer

identified as a party-defendant (Id.). Accordingly, all pending motions were terminated

as moot (Doc. 74).

On Feb. 3, 2022, Yum! filed another motion to dismiss and supporting

memorandum of law for lack of jurisdiction pursuant to the Rule 12(b)(2) of the Federal

Rules of Civil Procedure (Docs. 75, 76). On that same date, Yum! and TBF also filed a

motion to dismiss pursuant to Rule 12(b)(7) and 12(b)(6) and supporting memorandum

of law. (Docs. 77, 78).

On March 7, 2022, Coons filed her response to the pending motions (Docs. 80, 81).

She also filed a motion seeking leave to conduct jurisdictional discovery (Doc. 82).

Accordingly, on March 10, 2022, this Court granted Coons sixty (60) days to conduct

jurisdictional discovery while holding the pending motions in abeyance (Doc. 83).

On June 24, 2022, the Court held a scheduling conference at which time the

parties discussed the status of the jurisdictional discovery (Doc. 93). Shortly thereafter,

on July 15, 2022, the parties submitted a Joint Status Report disputing the future

handling of this matter (Doc. 94). On August 11, 2022, the Court granted Coons leave

to file an amended complaint based upon the issues being raised in the status report

(Doc. 96).

On September 1, 2022, Coons filed her third amended complaint (“TAC”) against

erstwhile defendants Yum! and TBF and newcomers TBC and YRSG (Doc. 98).

Specifically, the TAC alleges that the defendants “constitute a vertically integrated

structure of entities” with YUM “the ultimate corporate parent of its wholly owned

direct and indirect subsidiaries, YRSG, TBC, and TBF” (Id.). Coons also raises “joint

employer” and “alter ego” theories (Id.).

On September 16, 2022, the following three motions and supporting

memorandums of law were filed by defendants herein: (1) Motion to Dismiss filed by

YUM and YRSG pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure,

including Affidavit of Thomas E. Ahlering (Docs. 103-105); (2) Motion to Compel

Arbitration pursuant to Rule 12(b)(3) filed by all defendants (Docs. 107, 108); and (3)

Motion to Dismiss, in the alternative, pursuant to Rules 12(b)(6) and 12(b)(7) filed by

all defendants (Docs. 109, 110).

On September 30, 2022, this Court approved the proposed briefing schedule (Doc.

123). Accordingly, on October 17, 2022, Coons filed her unredacted memorandums in

opposition to the three defense motions (Docs. 134, 137, and 139). Defendants filed their

respective replies on November 7, 2022 making these motions ripe (Docs. 143, 145).

On January 6, 2023 and February 24, 2023 respectively, the Court granted Coons

leave to file supplemental authority, including recent decisions from the Northern

District, the Seventh Circuit, and the Illinois Supreme Court, to wit: Giron v. Subaru of

America, Inc., 2022 WL 17130869 (N.D. Ill. Nov. 21, 2022), Johnson v. Mitek Systems,

Inc., 55 F.4th 1122 (7th Cir. 2022); Tims, et al v. Black Horse Carriers, Inc., 2023 IL

127801 (Ill. Feb. 2, 2023); and, Cothron v. White Castle Systems, Inc. 2023 IL 128004

(Ill., Feb. 17, 2023).

FACTUAL BACKGROUND

The facts alleged by Coons are accepted as true for purposes of defendants’

motions1. FED. R. CIV. P. 10(c); Arnett v. Webster, 658 F.3d 742, 751-52 (7th Cir. 2011).

This Court will summarize what it deems necessary to address this motion.

Coons is a citizen of Illinois (Doc. 98, ¶ 30). She worked at various Taco Bell

restaurants for approximately 18 years (Doc. 98, ¶ 79). She last worked at the

restaurant in Caseyville, Illinois, which was franchised by Bell (Id.). From about 2014

to 20172, Coons was one of the managers at the Caseyville location (Id.). During her

tenure in Caseyville, Coons was told that all the Taco Bell restaurants were converting

from a card or password time system to a biometric timekeeping system (Doc. 98, ¶ 80).

Under the new system, Coons was required to scan her fingerprints into the timekeeping

system as a means of authentication and identification, instead of using a key fob or

other authentication device (Doc. 98, ¶ 11). As a manager, Coons also had to direct other

employees to provide their fingerprints into the system incorporated at the Taco Bell

(Doc. 98, ¶ 80). Coons also had to use her fingerprint when she dealt with time records

1The factual information was taken directly from the TAC (Doc. 98) and will be cited accordingly.

2 In paragraph 9, Coons indicates she was employed as a manager of the Caseyville Taco Bell in

2013; however, in paragraph 30, she claims to have been manager there from 2014 to 2017.

or other employee records (Doc. 98, ¶ 81). Bell required Coons and the other employees

to scan their fingerprints to authenticate and track time (Doc. 98, ¶ 83). Bell

subsequently stored Coons’ fingerprint data and presumed the remaining defendants

could access said date (Id.).

Coons left Taco Bell in 2017 and does not know if the collection and possession of

fingerprint data continued (Doc. 98, ¶ 84). She does not recall being informed of the

specific limited purpose or length of time the fingerprints were collected or stored, and

does not know if they have been destroyed (Doc. 98, ¶ 85). She never signed a written

release allowing anyone to collect, store, or have access to her fingerprints (Doc. 98, ¶

86).

Within the TAC, Coons alleges a vertically integrated structure of entities (Doc.

98, ¶ 2). Yum! is the “ultimate corporate parent” of its wholly owned direct and indirect

subsidiaries: YRSG, TBF, and TBC (Doc. 98, ¶ 32). YRSG is the operational arm of Yum!

in that it provides financial and administrative support to TBC and TBF (Doc. 98, ¶ 36).

YRSG also collects non-refundable fees from franchisees, including Bell (Doc. 98, ¶ 54).

TBC is a party to the franchise agreement in this case and is alleged to be a 100%

owned direct subsidiary of Yum!3 (Doc. 98, ¶ 37). Coons claims TBC has direct control

over the Caseyville franchise because the franchise agreement required compliance with

the Operation Manual4 (Doc. 98, ¶ 56).

TBF is a 100% wholly owned indirect subsidiary of TBC and Yum! (Doc. 98, ¶ 38).

TBF has zero employees, its corporate operations are controlled Yum! and TBC, and

3 Coons also claims that TBC has acted as Yum!’s alter ego (Doc. 98, ¶ 37).

4 The Operations Manual was incorporated by reference into the Franchise Agreement.

many of its administrative functions are performed by YRSG (Id.). TBF issues the

Franchise Disclosure Document (“FDD”) to the Taco Bell Franchises, including former

party-defendant, Bell American Group, LLC “Bell” (Doc. 98, ¶ 39).

Bell is the second largest Taco Bell franchisee in the county, and the restaurant

located in Caseyville, Illinois is one of its properties (Doc. 98, ¶ 40). Yum! had periodic

contact with Bell; however, Coons claims that Bell is not an indispensable party because

Yum!, YRSC, TBC, and TBF are being sued for their direct control and indirect actions

over the Caseyville restaurant (Doc. 98, ¶¶ 42, 43). There is no provision in the FDD or

applicable franchise agreement precluding any claim that Yum!, TBC, or any of their

subsidiaries are joint employers of Bell’s employees (Doc. 98, ¶ 45).

Bell paid a successor franchise fee for the Caseyville restaurant to TBC, as well

as periodic fees and a marketing fee (Doc. 98, ¶ 57). TBC kept a marketing fund for the

Caseyville restaurant, and under the franchise agreement, TBC has the right to enter

the restaurant to ensure Bell’s compliance with the Franchise Agreement and

Operations Manual, which Coons claims gave them access to and control over any

biometric information collected by the Caseyville restaurant (Id.).

Coons asserts that TBF directed the POS and computer systems used in its

franchises and had unlimited access to the information, including biometric

information, that was being captured (Doc. 98, ¶ 61). Coons further claims that TBC

also had unfettered access to said biometric information (Doc. 98, ¶ 62).

In 2016, Yum! underwent a securitization transaction wherein TBC became

Yum!’s alter ego and was assigned all of its duties under the franchise agreements (Doc.

98, ¶ 65). Shortly thereafter, several subsidiaries and affiliates, including TBC, entered

into a management agreement wherein TBC was designated to act as the manager and

was delegated to carry out the affiliates’ duties and obligations under franchise and

licensing agreements (Doc. 98, ¶ 67).

Coons also claims that Yum! exercised sufficient control of the daily operations of

the franchises, including the Caseyville restaurant, to be considered a joint employer

with Bell (Doc. 98, ¶ 89). Yum! was able to control the POS system, including the

fingerprint scanners, that were purchased by the franchisees, including Bell (Doc. 98, ¶

91). Accordingly, Yum! should have inferred that Bell was using fingerprint technology

to clock its employees in and out (Id.). Yum! also had a direct impact on franchisee hiring

policies, benefits, and programs that were offered to franchisee employees and

maintained control over franchisees through its wholly owned subsidiaries (Doc. 98, ¶¶

96, 99).

TBC and TBF are also joint employers, with TBC being a 100% wholly owned

subsidiary of Yum! and the 100% owner of TBF (Doc. 98, ¶ 102)

LEGAL STANDARD

The Federal Arbitration Act ("FAA") "governs the enforcement, validity, and

interpretation of arbitration clauses in commercial contracts in both state and federal

courts." Jain v. de Mere, 51 F.3d 686, 688 (7th Cir. 1995). Section 2 of the FAA provides

that “an agreement in writing to submit to arbitration an existing controversy ... shall

be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in

equity for the revocation of any contract.” 9 U.S.C. § 2. This provision “embodies both a

‘liberal federal policy favoring arbitration and the fundamental principle that

arbitration is a matter of contract.’ ” Gore v. Alltel Communications, LLC, 666 F.3d

1027, 1032 (7th Cir. 2012).

Under the FAA, "arbitration should be compelled if three elements are present:

(1) an enforceable written agreement to arbitrate; (2) a dispute within the scope of the

arbitration agreement; and (3) a refusal to arbitrate." Scheurer v. Fromm Family Foods

LLC, 863 F.3d 748, 752 (7th Cir. 2017). As the party seeking arbitration, Defendant[s]

bear the burden of proving that Plaintiff “agreed to arbitrate the claim[s] asserted here.”

See also Zurich American Ins. Co. v. Watts Industries, Inc., 466 F.3d 577, 580 (7th Cir.

2006). “To decide this question, courts apply an evidentiary standard similar to the one

that applies at summary judgment, meaning that if the party seeking arbitration offers

sufficient evidence to allow a factfinder to conclude that the parties agreed to arbitrate,

the party opposing arbitration must identify facts showing a genuine dispute as to the

existence of the agreement.” Tinder v. Pinkerton Security, 305 F.3d 728, 735 (7th Cir.

2002)). “[O]nce an enforceable arbitration contract is shown to exist, questions as to the

scope of arbitrable issues should be resolved in favor of arbitration.” Scheurer, 863 F.3d

at 752 (citing Moses H. Cone, 460 U.S. at 24-25) (“Once it is clear, however, that the

parties have a contract that provides for arbitration of some issues between them, any

doubt concerning the scope of the arbitration clause is resolved in favor of arbitration as

a matter of federal law.”).

ANALYSIS

Before the Court can rule on this motion, the Court must first consider whether

there was, in fact, an agreement to arbitrate. Indeed, the Supreme Court has held that

“arbitration is a matter of contract and a party cannot be required to submit to

arbitration any dispute which he has not agreed so to submit.” AT&T Technologies v.

Communications Workers of America, 475 U.S. 643, 648 (1986). Next, a court must

consider whether the parties agreed to arbitrate. Id. at 649. It is important to note that

a court, in deciding whether the parties have agreed to arbitrate, is not to rule on the

potential merits of the underlying claims. Id.

In determining whether a valid arbitration agreement exists between parties,

federal courts apply the state law principles of contract formation. Gupta v. Morgan

Stanley Smith Barney, LLC, 934 F. 3d 705, 711 (7th Cir. 2019). An enforceable

contract under Illinois law requires an offer, acceptance, consideration, and mutual

assent. Nat'l Prod. Workers Union Ins. Trust v. Cigna Corp., 665 F.3d 897, 901 (7th Cir.

2011).

Coons was an “at-will” employee, which is presumed when a person is hired

without a fixed term and which is expressly stated in the Bell Manager Handbook (Doc.

137-1, p. 4); see also Duldudao v. St. Mary of Nazareth Hosp. Ctr., 505 N.E.2d 314, 318

(Ill. 1987). An employment agreement signed by an at-will employee can create valid

and enforceable contractual rights if the traditional requirements for contract formation

exist. Duldulao, 505 N.E.2d at 318. While Coons contends that there was no contract,

this Court finds the contrary. Bell offered employment, which was accepted by Coons,

and both parties consented to the terms.

Accordingly, this Court moves on to the next step – determining whether a valid

arbitration agreement existed. In the motion, defendants point to the document itself,

which was entitled, “RECEIPT OF DISPUTE RESOLUTION PROGRAM AND

AGREEMENT TO ABIDE BY DISPUTE RESOLUTION PROGRAM” and which was

executed by Coons on August 15, 2013 along with Charles W. Brown, the authorized

officer for Bell American Group and its subsidiaries (Doc. 48-2). The entirety of the

Dispute Resolution Program (“DRP”), which Coons indicated she had reviewed, set forth

how to seek arbitration and the agreement itself stated, “[t]his is an agreement to

arbitrate all legal claims” (Doc. 48-3). The DRP also specified that any arbitration would

be administered under the American Arbitration Association’s rules and expressly

stated, “[T]he Federal Arbitration Act shall govern the interpretation, enforcement, and

proceedings under this Agreement.” (Doc. 48-2). By executing the document, Coons

agreed “that any arbitration between the Company and me will be on an individual basis

and not as a class or collective action”. (Id.) Coons further affirmed, “I understand that

by entering into this Agreement, I am giving up my right to have my legal

claims against the Company decided in court by a judge or jury.” (Id.) (emphasis

added).

However, because “the Company” refers to Bell American Group, which was the

only signatory beyond Coons, Coons counters that defendants, as non-signatories to the

contract, are unable to enforce the agreement to begin with, leaving the Court to address

the issue of arbitrability (Doc. 137). She further contends that any claims as to

arbitrability must be determined by the Court, not the arbitrator (Id.). Notwithstanding

her argument, the Court points to the agreement itself which states, “The arbitrators,

and not any federal, state, or local court or agency, shall have exclusive authority to

resolve any dispute relating to the interpretation, arbitrability, applicability,

enforceability or formation of the agreement to arbitrate, including, but not limited to

any part of the agreement to arbitrate is void and voidable.” (Doc. 137-1, p. 27).

Defendants contend that by signing the document, Coons agreed to a “sweeping”

delegation clause that referred all disputes to an arbitrator (Doc. 108). Defendants

further contend that the agreement incorporates the rules of the American Arbitration

Association (“AAA”) is an unmistakable delegation as to questions of arbitrability (Id.).

This Court concurs. In fact, the Supreme Court has held that a court may not override

a contract when the arbitrability question is delegated to an arbitrator. Henry Schein,

Inc. v. Archer and White Sales, Inc., 139 S.Ct. 524, 529 (2019). In those circumstances,

a court possesses no power to decide the arbitrability issue. Id. As such, this Court defers

all issues of arbitrability, including the ability of a non-signatory to enforce the

agreement, to the arbitrator.

Coons next argues that the arbitration agreement does not apply to non-

signatories. A “nonparty's right to enforce an arbitration agreement is governed by

state law.” Sosa v. Onfido, Inc., 8 F.4th 631, 637 (7th Cir. 2021) (citing Arthur Andersen

LLP v. Carlisle, 556 U.S. 624, 630-631(2009). Furthermore, ‘traditional principles’ of

state law generally “allow a contract to be enforced by or against nonparties to the

contract through ‘assumption, piercing the corporate veil, alter ego, incorporation by

reference, third-party beneficiary theories, waiver and estoppel”. Id. (quoting 21 R.

Lord, Williston on Contracts § 57:19, p. 183 (4th ed. 2001)).

In Illinois, a non-signatory to a contract typically has no right to invoke an

arbitration provision contained in that contract. See, e.g., Caligiuri v. First Colony Life

Ins. Co., 742 N.E.2d 750, 755 (Ill.App.Ct. 2000). However, there are recognized

exceptions to that general rule — third-party beneficiary, agency, and equitable

estoppel. See Ervin v. Nokia, Inc., 12 N.E.2d 534, 539–41 (Ill.App.Ct. 2004) (applying

third-party beneficiary, agency, and equitable estoppel theories in considering a

nonparty's claim to enforce an arbitration agreement). Additionally, the Supreme Court

has recognized that arbitration agreements may be enforced by non-signatories through

“assumption, piercing the corporate veil, alter ego, incorporation by reference, third-

party beneficiary theories, waiver and estoppel.”. GE Power Conversion France SAS,

Corp., v. Outokumpo Stainless USA, LLC, 140 S.Ct. 1637, 1649 (2020).

This Court does not agree with Coons. To the contrary, defendants raise two

possible arguments for why the Court should enforce the arbitration agreement,

although only one needs to be found for the agreement to be upheld against non-

signatories.

In the TAC, Coons alleges the defendants have an agency relationship with Bell,

going so far as alleging alter ego and joint employer scenarios. Defendants contend that

the agreement is enforceable by them because Coons alleges that Bell’s actions should

be imputed to the rest of the defendants (Doc. 108, p. 19).

The Seventh Circuit has compelled arbitration where the plaintiff alleges a non-

signatory has some sort of agency relationship, regardless of whether the allegations

are true or disputed. In re Oil Spill by Amoco Cadiz Off Coast of France Mar. 16, 1978,

659 F.2d, 759 (7th Cir. 1981) (“Having alleged an agency relationship as the basis for

its standing in the suit, [plaintiff] cannot slough off that relationship at will”). Coons

does not contest this with contrary law, but instead claims that no such agency

relationship was alleged (Doc. 137, p. 19). Plaintiff contends that because she did not

say the magic words that Bell American was acting as an agent of the defendants, she

can escape her plain accusations of agency (See Doc. 98, ¶ 16):

“Specifically, YBI had direct influence and impact on the Taco Bell

franchises and their daily routines, and indirect influences on them

through its 100% owned subsidiaries, including TBC. Franchises were

required to purchase their supplies, including computer systems and their

point of sale or POS systems through … an entity controlled by YBI.”

The TAC is riddled with numerous accusations of knowledge, involvement, and

control, by defendants, and although Plaintiff may not have explicitly pled an agency

relationship, these accusations are more than enough to allege the existence of an

agency relationship, as was similarly found in Illinois law by Walker v. Watson, 2012 IL

App (1st) 111759-U:

“In her amended complaint, plaintiff Walker alleged, on information and

belief, that defendant Watson was a major stockholder of defendant

dealership, that he set policies and procedures that permitted his

employees to sell previously wrecked cars without disclosing that fact to

the prospective buyers. She further alleged that defendant Watson was

personally involved in decisions regarding the level of inspection afforded

the rebuilt cars and condoned inspections designed not to discover defects.

She further alleged that defendant Watson was personally aware of and

ratified the decision of his sales manager to sell the damaged vehicle to

her.”

Coons cannot escape the plain undertones of her suit by claiming that she never

outright pled the specifics of agency. Defendants, due to the accusations of knowledge

and control over Bell, have the right to enforce the arbitration agreement because of

their alleged agency relationship.

The Federal Arbitration Act (“FAA”) allows one party to an arbitration agreement

to ask the court to put the litigation on hold and force the other party to arbitrate the

disputes. 9 U.S.C. § 4. Indeed, 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. 9 U.S.C. §§ 3,4. As such, a party

moving for arbitration also implicitly seeks a stay of judicial proceedings.

Notwithstanding the foregoing, the Court has the inherent authority to stay

proceedings to “control the disposition of causes on its docket with economy of time and

effort for itself, for counsel, and for litigants.” Landis v. North American Co., 299 U.S.

248, 254 (1936). This authority exists even in the absence of a procedurally valid motion

to stay. See Clinton v. Jones, 520 U.S. 681, 706 (1997) (discussing district courts’ “broad

discretion to stay proceedings as an incident to its power to control its own docket”);

Jackson v. Van Kampen Series Fund, Inc., No. 06-CV-944, 2007 WL 1532090, at *2 (S.D.

Ill. May 24, 2007) (holding that court’s inherent authority “includes the power to stay

proceedings sua sponte.”). As such, this Court will stay further proceedings in this

matter pending a decision from the arbitrator. Consequently, the pending motions to

dismiss are held in abeyance (Docs. 103, 109).

CONCLUSION

For the reasons set forth above, Defendants’ Motion to Compel Arbitration (Doc.

107) is GRANTED in its entirety. As set forth infra, all further proceedings in this

matter are STAYED pending arbitration. The parties are DIRECTED to file a report

advising the Court of the status of the arbitration proceeding on or before November 1,

2023.

IT IS SO ORDERED.

DATED: May 8, 2023

/s/ Stephen P. McGlynn_

STEPHEN P. McGLYNN

U.S. District Judge