# Coons v. Yum! Brands, Inc.

> District Court, S.D. Illinois · May 9, 2023

URL: https://www.frixlaw.com/law-library/cases/10156362

## Case

- **Court:** District Court, S.D. Illinois
- **Decided:** May 9, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10156362. Public record. Not legal advice.