Alex Coatney v. Ancestry.com DNA, LLC

In the

United States Court of Appeals

For the Seventh Circuit

____________________

No. 22-2813

ALEX COATNEY, individually and on behalf of similarly

situated individuals, et al.,

Plaintiffs-Appellees,

v.

ANCESTRY.COM DNA, LLC,

Defendant-Appellant.

____________________

Appeal from the United States District Court for the

Southern District of Illinois.

No. 3:21-cv-01368-DWD — David W. Dugan, Judge.

____________________

ARGUED DECEMBER 6, 2023 — DECIDED FEBRUARY 15, 2024

____________________

Before FLAUM, EASTERBROOK, and BRENNAN, Circuit Judges.

BRENNAN, Circuit Judge. Ancestry.com sells genealogy

tools to aid users in researching their family history. Regis-

tered users of its website must first agree to an arbitration

clause. In this case, guardians activated DNA test kits through

their accounts on behalf of their children. Those children are

the plaintiffs here. When another business acquired Ancestry,

the plaintiffs contended that Ancestry violated their privacy

2 No. 22-2813

rights by disclosing confidential genetic information and

sued. Ancestry moved to compel arbitration.

Sitting in diversity and applying Illinois law, the district

court ruled that the plaintiffs were not bound to arbitrate their

claims under an agreement between their guardians and An-

cestry. We agree and affirm the decision of the district court.

I. Background

Ancestry.com DNA, LLC is a genealogy and consumer

genomics company. 1 Users who create online accounts may

purchase a DNA test kit through which Ancestry collects con-

sumer saliva samples. Ancestry then analyzes the genetic in-

formation in those samples and returns genealogical and

health information to the purchaser through its website.

Individuals who purchase and activate Ancestry DNA test

kits must agree to Ancestry’s Terms & Conditions. Under the

Terms, only adults may purchase or activate a DNA test kit.

However, minors thirteen to eighteen years old may still use

Ancestry’s DNA service. A parent or legal guardian may acti-

vate a DNA test kit and send in a minor’s saliva sample using

an account for the child that the parent or guardian manages.

Between 2016 and 2019, guardians purchased and acti-

vated test kits on behalf of plaintiffs, who were all minors at

the time. When activating the kits, the guardians took a num-

ber of steps. In January 2016, N.S.’s guardian accessed Ances-

try’s website to enter N.S.’s personal information, confirm she

was a parent or guardian providing a minor’s DNA, and

1 Genomics is a field of biology focused on studying all the DNA of

an organism—that is, its genome. National Human Genome Research In-

stitute. https://www.genome.gov/genetics-glossary/genomics

No. 22-2813 3

verify her review and acceptance of the Terms. Coatney’s

guardian followed a similar process when activating a DNA

test kit on Coatney’s behalf in December 2017, and also com-

pleted additional, separate terms contained in a DNA Pro-

cessing Consent. H.S.’s and B.H.’s guardian completed these

same steps when activating test kits in August and September

of 2019. 2

The DNA Processing Consent lists several provisions re-

lated to Ancestry’s use of a minor’s DNA and a guardian’s

agreement. It states, “When you activate your child’s DNA

test kit, you consent to Ancestry’s collection and processing of

your child’s DNA data.” A guardian’s consent grants Ances-

try permission to, among other things:

 “Convert the physical DNA sample into DNA data

and use your child’s DNA data to provide reports

about your child’s ancestral origins;”

 “Identify your child’s potential relatives;” and

 “Use your child’s DNA data … to help you and

your child discover other details about your family

history.”

The Terms, in each iteration, contain a dispute resolution

provision, binding the parties to arbitration and waiving any

class actions. Language in the Terms notifies Ancestry’s users

that continued use of Ancestry’s services after a change to the

Terms constitutes acceptance of that change. The Terms also

2 H.S.’s and B.H.’s guardian—Donna Roberts—had previously cre-

ated an Ancestry account in 2015 and accepted the Terms. Roberts main-

tained her account through multiple updates of the Terms, including those

in effect at the same time she activated DNA test kits on H.S.’s and B.H.’s

behalf.

4 No. 22-2813

include specific provisions pertaining to Ancestry’s DNA Ser-

vices:

“DNA Services” refers to the use of our DNA

collection kit, processing and handling of your

DNA sample, genetic testing of your DNA sam-

ple, and our web or mobile app-based tools that

provide you with ethnicity and other genet-

ically related results and associated services, of-

fer you the ability to view genetic matches that

can identify potential relatives, help you ex-

plore your ethnic and family origins, and make

new discoveries through your DNA.

As the Terms explain, “[t]he purpose of the DNA Services is

to provide genetic and genealogy results and related reports

for your informational, recreational, educational, and re-

search use.”

The Terms did not require the plaintiffs to read them.

Plaintiffs allege they did not, and also that they did not create

Ancestry accounts. Nor did plaintiffs ever access their guard-

ians’ accounts, receive their DNA test results, or interact with

Ancestry’s website in any way before filing suit.

In 2020, Blackstone, Inc. acquired Ancestry. Plaintiffs sued

Ancestry in federal court, claiming that the acquisition re-

sulted in Ancestry disclosing genetic test results and personal,

identifying information to Blackstone without obtaining writ-

ten authorization, in violation of the Illinois Genetic Infor-

mation Privacy Act. See 410 ILL. COMP. STAT. 513/1, et seq.

Plaintiffs filed a purported class action under the Class Action

Fairness Act, and the district court had diversity jurisdiction

under 28 U.S.C. § 1332(d).

No. 22-2813 5

Under the Terms’ dispute resolution provisions, Ancestry

moved to compel arbitration under the Federal Arbitration

Act, 9 U.S.C. § 4. The district court denied Ancestry’s motion.

To that court, it was clear that Ancestry and plaintiffs’ guard-

ians had agreed to arbitration, but that court still had to de-

cide whether plaintiffs were also bound by the agreement.

First, the district court rejected Ancestry’s assertion that

plaintiffs assented to the Terms by agreeing to use Ancestry’s

services and submitting their DNA tests through their guard-

ians’ accounts or through their guardians’ execution of con-

sent forms on plaintiffs’ behalf. The court did not read the

Terms’ plain, unambiguous language to support that asser-

tion. Plaintiffs neither signed the Terms nor created Ancestry

accounts, so the district court declined to find that plaintiffs

had consented to those Terms. Further, plaintiffs did not acti-

vate their own DNA tests or otherwise independently engage

with Ancestry’s services.

Second, the district court concluded that equitable princi-

ples did not bind plaintiffs to the Terms. Specifically address-

ing a theory of direct benefits estoppel, the court noted, “it is

hard to imagine what benefit … Plaintiffs received from the

processing of their DNA,” where there were no allegations

that Plaintiffs accessed their guardians’ Ancestry accounts or

their DNA test results.

Ancestry timely filed this interlocutory appeal. “Interloc-

utory appeals from denials of motions to order arbitration are

authorized by 9 U.S.C. § 16(a)(1)(B).” Andermann v. Sprint

Spectrum L.P., 785 F.3d 1157, 1157 (7th Cir. 2015).

6 No. 22-2813

II. Discussion

Ancestry urges us to reverse the district court’s denial of

its motion to compel arbitration on three grounds:

 Plaintiffs’ guardians assented to the Terms on their

behalf;

 Plaintiffs are “closely related” parties to their

guardians (or even third-party beneficiaries), fore-

seeably bound by the Terms; or

 As direct beneficiaries of the Terms, plaintiffs are

estopped from avoiding them.

We review de novo a district court’s denial of a motion to

compel arbitration and the “findings of fact underlying that

decision for clear error.” Sosa v. Onfido, Inc., 8 F.4th 631, 638

(7th Cir. 2021). The district court’s application of equitable

doctrines is reviewed for an abuse of discretion. Id.

Before addressing Ancestry’s arguments, we review some

general legal principles surrounding arbitration. The FAA

“requires federal and state courts to place written arbitration

agreements on the same footing as other contracts.” Scheurer

v. Fromm Family Foods, LLC, 863 F.3d 748, 752 (7th Cir. 2017)

(citing 9 U.S.C. § 2). A court must compel arbitration under

the FAA when three elements exist: “(1) an enforceable writ-

ten agreement to arbitrate, (2) a dispute within the scope of

the arbitration agreement, and (3) a refusal to arbitrate.” Id.

(citing 9 U.S.C. § 4).

Arbitration is contractual, and “[a] party cannot be

required to submit to arbitration any dispute which he has not

agreed so to submit.” Id. (quotations omitted). It is a “bedrock

principle” that “an arbitration agreement generally cannot

No. 22-2813 7

bind a non-signatory.” A.D. v. Credit One Bank, N.A., 885 F.3d

1054, 1059 (7th Cir. 2018). Whether an arbitration agreement

is enforceable against a non-party is a question governed by

“traditional principles of state law.” Arthur Andersen LLP v.

Carlisle, 556 U.S. 624, 631 (2009); Scheurer, 863 F.3d at 752. State

law typically provides only for a handful of limited

exceptions to the general prohibition against binding non-

signatories: “(1) assumption, (2) agency, (3) estoppel, (4) veil

piercing, and (5) incorporation by reference.” A.D., 885 F.3d

at 1059–60 (citing Zurich Am. Ins. Co. v. Watts Indus., Inc., 417

F.3d 682, 687 (7th Cir. 2005)).

Illinois law governs, so we turn there for the specific legal

rules to resolve this appeal, mindful that we must ascertain

those principles as Illinois would understand them, even if

faced with a lack of a ready answer. Two “guardrails” keep us

on course. Green Plains Trade Grp., LLC v. Archer Daniels Mid-

land Co., 90 F.4th 919, 928 (7th Cir. 2024). First, “in the absence

of prevailing authority from the state’s highest court,” we

“give great weight to the holdings of the state’s intermediate

appellate courts.” Allstate Ins. Co. v. Menards, Inc., 285 F.3d

630, 637 (7th Cir. 2002). We deviate from those holdings only

where there are “persuasive indications that the highest court

of the state would decide the case differently.” Id. Second,

when presented with “two equally plausible readings of state

law,” we “should not choose the alternative that requires us

to predict a change or an expansion in extant state legal doc-

trine.” Green Plains Trade Group, 90 F.4th at 929.

A. Assent by Conduct

Ancestry argues that “[t]he conduct of Plaintiffs’ guardi-

ans unambiguously established consent to Ancestry’s Terms

on Plaintiffs’ behalf,” making plaintiffs direct parties. That

8 No. 22-2813

conduct, Ancestry submits, occurred when a guardian acti-

vated a DNA test kit in a plaintiff’s name, verified their guard-

ian status, agreed to the Terms, sought a plaintiff’s consent to

collect and submit their DNA, and administered the DNA

test.

Looking to Illinois law, our analysis begins with the

Terms’ language, which we “endeavor to give … ‘its plain and

ordinary meaning.’” Romspen Mortg. Ltd. P’ship v. BGC Hold-

ings LLC – Arlington Place One, 20 F. 4th 359, 372 (7th Cir. 2021)

(quoting Gallagher v. Lenhart, 874 N.E.2d 43, 58 (Ill. 2007)). The

goal of Illinois contract law “is to give effect to the intent of

the parties as demonstrated through objective conduct.” Jan-

iga v. Questar Cap. Corp., 615 F.3d 735, 742 (7th Cir. 2010) (cit-

ing Carey v. Richards Bldg. Supply Co., 856 N.E. 2d 24, 27 (Ill.

2006)).

That plain and ordinary meaning is unambiguous here.

Plaintiffs are not express parties to the Terms. As shown in the

use of “you” throughout the Terms, the only parties to the

agreement are the signatory and Ancestry. The Terms also say

they “are personal” to the signatory, who “may not … assign

or transfer any … rights and obligations” established by them.

Ancestry’s only counter to the Terms’ plain language is an

unpublished district court decision, Burns v. Wilderness Ven-

tures, Inc., No. 12 C 4188, 2012 WL 3779069 (N.D. Ill. Aug. 30,

2012). There, the father of a deceased sixteen-year-old girl

sued on behalf of her estate after she was killed in an accident

while taking part in defendant’s wilderness program. Id. at *1.

The minor and her mother signed two contracts with the de-

fendant. Id. at *2. Each contract contained a forum selection

clause setting Teton County, Wyoming as the sole jurisdiction

and venue of any legal proceeding arising out of the

No. 22-2813 9

wilderness program.3 Id. The contracts also contained lan-

guage informing a signatory parent or guardian that their sig-

nature was “on behalf of the Participant, myself, and my

spouse … .” Id.

Burns sued, and Wilderness Ventures moved to dismiss

for improper venue. Id. at *1. Burns claimed the forum selec-

tion clause could not bind his daughter’s estate. Id. at *3. The

district court rejected this argument. The decedent’s mother

signed the contracts as an individual and as the girl’s guard-

ian. The court also found persuasive authority permitting a

parent or guardian to bind their minor child to a specific fo-

rum or arbitration because such agreements do not limit the

minor’s “substantive right to sue,” but only “limit the proce-

dural avenues of such suit to those mutually agreed.” Id.

Ancestry urges us to follow Burns, but we decline for two

reasons. First, the court in Burns did not enforce the forum

selection clause based on the parents’ conduct. Rather, the

court did so because her mother signed contracts explicitly

noting that a guardian’s signature constituted agreement on

behalf of the minor child. Id. Nothing in Burns discusses any

conduct, outside of signing the contracts, that purportedly

bound the decedent to the forum selection clause. Second, the

contracts in Burns differ markedly from the Terms here. The

decedent’s mother signed the contracts with the forum selec-

tion clause “on behalf of” her minor child. Id. at *2. Ancestry’s

Terms do not say plaintiffs’ guardians agreed to them “on be-

half of” their children. Ancestry correctly points out that in

3 Because arbitration clauses are a type of forum selection clause, see

Jackson v. Payday Fin., LLC, 764 F.3d 765, 773 (7th Cir. 2014), authorities

involving forum selection clauses are useful in our analysis.

10 No. 22-2813

Burns, the court ignored the decedent’s own signature. Id. at

*3. Here, though, the only “on behalf of” (or similar language)

was not in Ancestry’s own contract, but in the DNA Pro-

cessing Consent. That Consent says nothing about binding

plaintiffs to the Terms—indeed, it does not mention the

Terms at all. 4

4 When contending that the guardians’ conduct bound plaintiffs to the

Terms, Ancestry cites a smattering of cases not from Illinois or from out-

side this circuit. These cases are distinguishable.

Two concerned arbitration clauses comparable to the forum selection

clause in Burns, indicating that agreement to them was on behalf of the

minor child. See Glob. Travel Mkt., Inc. v. Shea, 908 So.2d 392, 395 (Fla. 2005)

(“I, as parent or legal guardian of the below named minor, … agree, indi-

vidually and on behalf of my child or ward, to the terms of the above.”);

Cross v. Carnes, 724 N.E.2d 828, 831 (Oh. App. Ct. 1998) (noting that the

form containing the arbitration clause included two signature lines for the

parent to sign, one for the parent individually and the other on behalf of

her minor daughter). Another was not decided on comparable grounds;

rather, the court concluded that a parent’s agreement to arbitrate a minor’s

potential tort claims generally does not run contrary to public policy con-

cerns. Hojnowski v. Vans Skate Park, 901 A.2d 381, 391 (N.J. 2006).

The last case Ancestry cites on this point, Dillon v. Ski Shawnee, Inc.,

No. 13-7155, 2014 WL 3900877 (D.N.J. Aug. 11, 2014), is too brief to help.

There, a mother purchased ski lift tickets and agreed to a forum selection

clause setting forum in New Jersey state court, for herself and her minor

daughter. Id. at *1. Following the daughter’s injury at defendant’s ski area,

the mother and daughter sued; defendant sought to enforce the forum

selection clause. Id. The plaintiffs argued the daughter never agreed to the

clause, as she did not purchase a lift ticket. The district court rejected this

argument, concluding “[a] parent can bind a minor child to a forum-

selection clause to which the parent agreed to enter.” Id. at *2. Without

more analysis, Dillon does not help us decide whether the guardians’

conduct bound plaintiffs to the Terms.

No. 22-2813 11

B. Closely Related and Third-Party Beneficiary

Arguments

Even if plaintiffs are not direct parties under the plain lan-

guage of the Terms, Ancestry submits they are bound either

as closely related parties or third-party beneficiaries.

The company mounts these arguments from shaky legal

ground, as Illinois “recognize[s] a strong presumption against

conferring contractual benefits on noncontracting third par-

ties.” Sosa, 8 F.4th at 639 (quotations omitted); see also Estate of

Willis v. Kiferbaum Const. Corp., 830 N.E.2d 636, 642 (Ill. App.

Ct. 2005); Ball Corp. v. Bohlin Bldg. Corp., 543 N.E.2d 106, 107

(Ill. App. Ct. 1989); Midwest Concrete Prods. Co. v. La Salle Nat’l

Bank, 418 N.E.2d 988, 990 (Ill. App. Ct. 1981) (quoting 17 AM.

JUR. 2d Contracts § 304, at 729–30 (1964)). That presumption is

overcome only where “the implication” that the contract ap-

plies to a third party is “so strong as to be practically an ex-

press declaration.” Sosa, 8 F.4th at 639 (quoting 155 Harbor

Drive Condo. Ass’n v. Harbor Point Inc., 568 N.E.2d 365, 375 (Ill.

App. Ct. 1991)). Showing that the “parties know, expect, or

even intend that others will benefit from the agreement” will

not suffice to overcome the presumption against third-party

beneficiaries. Id. (quoting Marque Medicos Farnsworth, LLC v.

Liberty Mut. Ins. Co., 117 N.E.3d 1155, 1159 (Ill. App. Ct. 2018)).

“Instead, for a nonparty to qualify as a third-party benefi-

ciary, the language of the contract must show that ‘the con-

tract was made for the direct, not merely incidental, benefit of

the third person.’” Id. (quoting Martis v. Grinnell Mut. Reinsur-

ance Co., 905 N.E.2d 920, 924 (Ill. App. Ct. 2009)). That show-

ing exists only in “an express provision in the contract identi-

fying the third-party beneficiary by name or by description of

a class to which the party belongs.” Id.

12 No. 22-2813

Importantly, the Terms exclude third-party beneficiaries:

“There shall be no third-party beneficiaries to this Agree-

ment.” Ancestry seeks to avoid this exclusion, citing one case

for the proposition that general provisions excluding third-

party beneficiaries do not supersede more specific language

included elsewhere. See Barba v. Village of Bensenville, 29

N.E.3d 1187, 1194–95 (Ill. App. Ct. 2015). But the only specific

language Ancestry points to are the provisions in the DNA

Processing Consent. Most of that language, like most of the

Terms’ provisions, uses “you” and “your” to refer to the per-

son executing the DNA Processing Consent: the child’s parent

or guardian.

Illinois’ strong presumption against conferring contrac-

tual benefits on noncontracting third parties, as well as the

Terms’ express prohibition, hobbles Ancestry’s position. The

law on closely related parties and third-party beneficiaries

does not strengthen it.

i. Plaintiffs are not closely related parties foreseeably bound

by the Terms.

A nonparty will be bound by a forum selection clause if

the nonparty is “closely related” to the dispute “such that it

becomes foreseeable that [the nonparty] will be bound.”

Hugel v. Corp. of Lloyd’s, 999 F.2d 206, 209 (7th Cir. 1993) (quo-

tation marks omitted);5 Solargenix Energy, LLC v. Acciona, S.A.,

17 N.E.3d 171, 183 (Ill. App. Ct. 2014) (adopting Hugel’s

5 In Hugel, we concluded that third-party beneficiary status would sat-

isfy the “closely related” and “foreseeability” requirements, while also

recognizing that a showing of third-party beneficiary status is not re-

quired for a showing that a party is closely related. 999 F.3d at 209–10 n.

7.

No. 22-2813 13

closely related parties test). “Where there is a sufficiently

close relationship between the non-signatory and the dispute

and the parties, it does not defy the non-signatory’s reasona-

ble expectations that it would be bound.” Solargenix, 17

N.E.3d at 185.

Ancestry asks us to apply Hugel and Solargenix to reverse

the district court’s decision that plaintiffs are not closely re-

lated parties foreseeably bound to the Terms. To Ancestry, the

plaintiffs, as minors under the guardians’ supervision, are

closely related to them. The guardians consented to the Terms

when activating the DNA test kits. So, it was foreseeable,

should a dispute arise, that plaintiffs would be bound by the

Terms.

But Hugel and Solargenix do not extend as far as Ancestry

would like. In Hugel, a company, its subsidiary, and their

president and chairman, Hugel, sued Lloyd’s over a business

dispute in Illinois federal district court. 999 F.2d at 207. When

Lloyd’s attempted to enforce a forum selection clause fixing

the legal forum in England, the companies argued that the

clause applied only to Hugel, who signed the agreement in-

cluding the forum selection clause. Id. The district court re-

fused to exercise jurisdiction. Id. Our court affirmed, holding

that the district court did not clearly err in finding that the

companies were so closely related to the dispute between

Hugel and Lloyd’s. Id. at 210. Hugel was president and chair-

man of both companies and owned 99 percent of the parent

company’s stock, which in turn owned 100 percent of the sub-

sidiary’s stock. Id. at 209–10. Hugel and the companies were

essentially one.

Solargenix required an Illinois state court to decide

whether it could exercise personal jurisdiction over Spanish

14 No. 22-2813

companies whose American subsidiaries agreed to a joint

venture that contained a forum selection provision fixing

venue in Chicago. 17 N.E.3d at 174, 177. Adopting Hugel’s

closely related parties test, the Illinois appellate court af-

firmed the lower court’s exercise of jurisdiction over the Span-

ish companies. Id. at 182, 189. Jurisdictional discovery re-

vealed that the Spanish companies, as parents of the Ameri-

can subsidiaries, “were heavily involved in negotiating and

approving the joint venture agreements.” Id. at 182. This in-

volvement showed the Spanish companies’ close relation to

the dispute and made it foreseeable that any dispute arising

from the joint venture would reasonably result in binding

them to the agreement’s forum selection clause. Id. at 189.

Hugel and Solargenix present two circumstances in which

a non-signatory is a closely related party to an agreement and

foreseeably bound by its terms. In the first, the non-

signatory’s identity is so intertwined with the identity of the

signatory that the two cannot be distinguished. In the second,

the non-signatory is deeply involved in the negotiation of the

contractual terms.

Neither scenario applies to plaintiffs. Though a special re-

lationship exists between plaintiffs and their guardians, in

fact and in law that relationship does not join their identities,

as can be the case with parent and subsidiary corporations.

Further, neither plaintiffs nor their guardians negotiated the

Terms. Indeed, there is no evidence plaintiffs even knew the

Terms.

No. 22-2813 15

ii. Plaintiffs are not third-party beneficiaries under Illinois

law.

Ancestry asserts plaintiffs benefited from the Terms such

that they should be considered third-party beneficiaries to

them. To the company, “Plaintiffs were intended to—and

did—benefit from the agreements with Ancestry.” That is be-

cause “Ancestry sequenced and analyzed Plaintiffs’ DNA to

generate insights about Plaintiffs’ genetic history.” For sup-

port, Ancestry points to a provision in the DNA Processing

Consent, stating Ancestry would “[u]se your child’s DNA

data … to help you and your child discover other details

about your family history.”

This court’s decision in Sosa is instructive in evaluating

Ancestry’s argument. There, a non-signatory sought to en-

force an arbitration clause. Sosa filed a class action suit against

Onfido, alleging that the company used technology without

his consent to extract biometric identifiers in violation of the

Illinois Biometric Information Privacy Act. Sosa, 8 F.4th at 635.

Sosa’s interaction with Onfido’s software, TruYou, came

through his use of OfferUp, an online marketplace that part-

nered with Onfido to verify consumers’ identities. Id. When

Sosa registered with OfferUp and used its app, he agreed to

OfferUp’s Terms of Service and a mandatory arbitration pro-

vision. Onfido was not named in the Terms of Service, but its

software was. Onfido sought to compel arbitration, arguing

that it was a third-party beneficiary of the Terms of Service

based on the references to its software. Id. at 636.

In Sosa, we rejected Onfido’s argument that it qualified as

a third-party beneficiary. Id. at 639–40. The language on

which Onfido relied “simply prohibit[ed] OfferUp users from

using the TruYou feature without first obtaining necessary

16 No. 22-2813

permissions … or if their use of the feature would violate”

laws or regulations. Id. at 639. “Nothing in the Terms of Ser-

vice indicate[d] that this section or the contract as a whole

were intended for the direct benefit of Onfido.” Id. Moreover,

even if “Onfido ultimately incidentally incurred a benefit

from the contract’s TruYou provision, that [was] not sufficient

to demonstrate that Onfido qualifie[d] as a third-party bene-

ficiary under Illinois law.” Id. We concluded that the OfferUp

Terms of Service, “[r]ead as a whole … neither provide any

benefit to Onfido nor give Onfido a right to enforce the arbi-

tration provision.” Id. at 640.

As with the terms of service in Sosa, the Terms here do not

state that they were intended for the direct benefit of plain-

tiffs. Admittedly, they are slightly more specific than those in

Sosa. The DNA Processing Consent, incorporated into the

Terms, contemplates that consent to Ancestry’s processing

and analysis of a child’s DNA will enable Ancestry’s provi-

sion of:

• Reports about the child’s ancestral origins;

• Insights about the “child’s ethnicity, places of

origin, ancestors, individual traits, and characteris-

tics;”

• Identification of potential relatives; and

• The ability to “to help you and your child” discover

other details about family history.

But nothing in the DNA Processing Consent says the Terms

are for plaintiffs’ direct benefit. The only reference in the

Terms to minors is as possible subjects from whom saliva

samples could be collected.

No. 22-2813 17

Additionally, the Terms’ arbitration provision did not in-

tend to directly benefit plaintiffs. In Johnson v. Noble, the rele-

vant provision stated that certain disputes “between or

among members and/or associated persons, and/or certain

others, arising in connection with the business of such mem-

ber(s) or in connection with the activities of such associated

person(s), shall be arbitrated.” 608 N.E.2d 537, 539 (Ill. App.

Ct. 1992). The Illinois Appellate Court ruled that the third-

party beneficiary doctrine to compel arbitration is properly

applied when the non-signatory was to derive a benefit from

the agreement and “where the arbitration clause itself is sus-

ceptible to this interpretation.” Id. at 541. The court reasoned

that the relevant provision included two non-signatories as

third-party beneficiaries because they were “associated per-

sons with a member … as stated in the agreement.” Id.

Here, the Terms’ arbitration provision does not contain

language capturing the plaintiffs. As with language else-

where in the Terms, the provision refers to “you and Ances-

try,” and “dispute[s] between us.” This language indicates

that the signatories intended to bind themselves, but not oth-

ers, to arbitration.

The Terms are presumed to directly benefit its signatories,

who are Ancestry and the guardians. That both knew, ex-

pected, or even intended for plaintiffs to benefit from the

agreement does not overcome that presumption. If Ancestry

and the guardians expected plaintiffs to directly benefit from

the Terms, the Terms do not state that. Ancestry did not in-

clude language memorializing its contrary intent, defeating

their third-party beneficiary argument.

18 No. 22-2813

C. Direct Benefits Estoppel

Ancestry offers one other theory to rebut the presumption

under Illinois law against binding non-signatories to con-

tracts. As direct beneficiaries of their guardians’ agreement to

the Terms, plaintiffs are estopped from avoiding its arbitra-

tion provision. Though Illinois state courts have not applied

direct benefits estoppel to enforce arbitration against a non-

signatory, Ancestry argues that this court in Everett v. Paul Da-

vis Restoration, Inc., 771 F.3d 380 (7th Cir. 2014), and other fed-

eral courts have employed direct benefits estoppel to bind

non-signatories to arbitration. The company submits that it

sequenced plaintiff’s DNA samples, “the precise benefit

Plaintiffs sought when they ‘discussed the DNA test … and

… agreed to the collection and processing of their saliva.’” To

Ancestry, this benefit to plaintiffs flows directly from the

Terms containing the arbitration provision, “because Ances-

try would have never provided services without those agree-

ments.”

But this benefit is theoretical, speculative, and unrealized,

plaintiffs say. They received a benefit that flowed from the

Terms: genetic analysis conducted by Ancestry. This benefit

is limited, plaintiffs submit, like the small benefit the plaintiff

received in A.D. v. Credit One Bank, N.A., 885 F.3d 1054 (7th

Cir. 2018). There is no direct benefit here, plaintiffs argue, be-

cause there is no allegation that they have ever viewed this

genetic analysis. So, they urge us to affirm the district court’s

conclusion that “theoretical access to Defendant’s services”

was not enough to bind Plaintiffs to Ancestry’s terms.

Authority applying direct benefits estoppel under Illinois

law is scarce. The Supreme Court of Illinois has not directly

addressed the topic. And neither Snyder v. Jack Schmitt Ford,

No. 22-2813 19

Inc., No. 5-21-0413, 2022 WL 1197374 (Ill. App. Ct. 2022), nor

Peterson v. Devita, No. 1-23-0356, 2023 WL 6166964 (Ill. App.

Ct. 2023), applied direct benefits estoppel to bind a non-

signatory to a contract. This absence of authority counsels us

that Illinois would not embrace direct benefits estoppel to

bind plaintiffs here.

i. A.D., not Everett, governs and instructs that direct

benefits estoppel does not apply.

Under direct benefits estoppel, “[a] nonsignatory party is

estopped from avoiding arbitration if it knowingly seeks the

benefits of the contract containing the arbitration clause.”

Zurich Am. Ins. Co., 417 F.3d at 688; A.D., 885 F.3d at 1064. The

benefit accruing to the non-signatory “must flow directly

from the agreement.” Everett, 771 F.3d at 383. “Thus, a benefit

derived from the agreement itself is direct. However, a benefit

derived from the exploitation of the contractual relationship

of parties to an agreement, but not the agreement itself, is in-

direct.” Id. at 383–84.

Everett concerned “whether an owner-operator of a fran-

chise is obligated to arbitrate under a franchise agreement be-

cause she received direct benefits from the agreement despite

not having signed the document.” 771 F.3d at 381–82. The

plaintiff’s husband and his company, EA Green Bay, LLC

(“EAGB”), entered into a franchise agreement containing an

arbitration clause with defendant PDRI. Id. at 382. Ms. Ever-

ett, the plaintiff, held a 50% ownership stake in EAGB, but did

not sign the franchise agreement. Id. When PDRI terminated

the franchise agreement, Mr. Everett transferred 45 percent of

his ownership interest to Ms. Everett, who continued to oper-

ate EAGB under the name Building Werks—all while serving

the same customers, at the same location, employing the same

20 No. 22-2813

people, and trading upon the goodwill and reputation gar-

nered while a PDRI franchise. Id. at 382–83.

When PDRI discovered this, it sought to compel

arbitration. Id. at 383. Ms. Everett filed suit, seeking a

declaratory judgment that she was not bound to arbitrate as a

non-signatory to the franchise agreement. Id.at 383. At first,

the district court denied Ms. Everett’s attempt to avoid

arbitration. But, when PDRI returned to the district court to

request confirmation of the arbitration award, Ms. Everett

moved to vacate the award. Id. The district court agreed and

reversed its earlier determination, finding that any benefit

Ms. Everett received from the franchise agreement was

“indirect because it flowed through her ownership interest in

EAGB and her relationship to Mr. Everett, but not to her

directly.” Id.

This court reversed. Id. at 385. “Ms. Everett was not merely

exploiting the contractual relationship among EAGB, Mr. Ev-

erett, and PDRI, but rather the benefit of the contract itself—

namely owning and operating a PDRI franchise.” Id. at 384.

Ms. Everett received the same benefits as her husband, “in-

clud[ing] benefitting from trading upon the name, goodwill,

reputation and other direct contractual benefits of the fran-

chise agreement.” Id. This court further recognized that

“[w]ithout the franchise agreement, EAGB and the business it

operated would not have existed, and thus Ms. Everett’s own-

ership interest would not have existed.” Id. at 385. Thus, “Ms.

Everett’s ownership interest in EAGB was itself a direct ben-

efit of the agreement, and not a separate relationship that the

benefits of the agreement flowed through.” Id.

In sum, Ms. Everett received direct benefits from the fran-

chise agreement to which she was a non-signatory: power,

No. 22-2813 21

control, and direction of the franchise as well as economic

benefits derived from the company’ prior affiliation with

PDRI. These were not potential benefits; Ms. Everett held and

wielded these benefits.

Here, the benefit plaintiffs received is not as direct as the

benefit in Everett. 6 As the district court recognized, the benefit

to plaintiffs is “potential” or “inchoate.” Plaintiffs have theo-

retical access to Ancestry’s services, but there are no allega-

tions that they have accessed Ancestry’s analysis of their

DNA. And, as we noted above in our discussion of Ancestry’s

third-party beneficiary argument, the Terms do not suggest

they benefit anyone other than the signatory and Ancestry.

A.D. is closer to this case. It concerned a minor’s putative

class action against Credit One for alleged violations of the

Telephone Consumer Protection Act. 885 F.3d at 1057. A.D.

sought compensation for telephone calls made by Credit One

to her telephone number in attempts to collect a debt A.D. did

not owe. Id. The debt was her mother’s, and Credit One’s

caller ID capture system had added A.D.’s phone number

when her mother used A.D.’s phone to access her account. Id.

at 1058. Importantly, the standard cardholder agreement be-

tween Credit One and A.D.’s mother contained an arbitration

clause and a class action waiver. Id.

6 Everett was a diversity case applying Wisconsin, not Illinois, law. Its

discussion and application of direct benefits estoppel cites approvingly to

precedent of this court, the Second Circuit, and the Fifth Circuit, none of

which relied on Illinois law to resolve the question. See Zurich Am. Ins. Co.,

417 F.3d at 688; Thomson-CSF, S.A. v. American Arbitration Ass’n, 64 F.3d

773, 778–80 (2d Cir. 1995); Blaustein v. Huete, 449 F. App’x 347, 350–51 (5th

Cir. 2011).

22 No. 22-2813

In concluding that A.D. was not bound by the arbitration

clause, this court examined whether A.D. could be estopped

as a direct beneficiary of the cardholder agreement under Ne-

vada law. Id. at 1064. Credit One asserted A.D. “directly ben-

efitted under the cardholder agreement because [A.D.’s

mother] asked her to make purchases with the card,” and

therefore received the same benefit her mother received: “the

ability to use the credit card to make purchases.” Id. We disa-

greed, as the only benefit received with respect to the credit

card “was limited to following her mother’s directions to pick

up the smoothies that her mother had ordered previously.”

Id. We concluded that estoppel did not apply to bind A.D. to

arbitration because “A.D. had no relationship, contractual or

otherwise with Credit One.” Id.

The benefit plaintiffs received here is more direct than the

benefit in A.D., which was completely indirect. All A.D. re-

ceived from her mother’s cardholder agreement was the abil-

ity to obtain products purchased with her mother’s card and

under her mother’s direction. Here, Ancestry processed each

plaintiff’s DNA and prepared analyses based on each plain-

tiff’s unique genetic profile. These analyses were available to

plaintiffs—through their guardians—if they chose to access

them.

But this benefit is still too indirect. As plaintiffs point out,

and Ancestry does not contest, there are no allegations sug-

gesting the plaintiffs even accessed their genetic analyses.

This makes the benefit similar to the benefit in A.D., and, as

noted above, dissimilar to the benefit in Everett. Ancestry has

not offered any Illinois (or other) authority to support the ap-

plication of estoppel where a non-signatory has access to a

benefit but there are no allegations or evidence that she has in

No. 22-2813 23

fact accessed it. Therefore, we agree with plaintiffs that the

benefit is too speculative and unrealized to trigger estoppel

under Illinois law.

ii. Recent Illinois appellate court decisions confirm this

reading.

Two more recent Illinois cases show the uphill climb An-

cestry faces for relief under Illinois law.

In Snyder, the plaintiff purchased a truck from Jack

Schmitt Ford, executing an Installment Loan Contract con-

taining an arbitration clause. 2022 WL 1197374, at *1. Things

devolved from there: Jack Schmitt Ford filed a complaint

against Snyder with an arbitrator, and Snyder and his wife

filed a 17-count complaint in Illinois state court asserting sev-

eral tort claims. Id. Jack Schmitt Ford sought to compel arbi-

tration, and the trial court agreed to compel arbitration of

Snyder’s claims, but not his wife’s claims, based on her non-

signatory status. Id. at *2.

On its cross-appeal, Jack Schmitt Ford argued that estop-

pel principles, including direct benefits estoppel, bound

Snyder’s wife to the Loan Contract and its arbitration clause.

Id. at *6–*10. The appellate court rejected this argument. Id.

The court recognized that courts (albeit not in Illinois) have

approved a theory of direct benefits estoppel where the non-

signatory requested enforcement of the underlying contract

itself. Id. at *8–*9 (discussing Int’l Paper Co. v. Schwabedissen

Maschinen & Anlagen GMBH, 206 F.3d 411 (4th Cir. 2000) and

In re Weekley Homes, L.P., 180 S.W.3d 127 (Tex. 2005)). And

Jack Schmitt Ford could not show that Snyder’s wife was re-

questing any enforcement of the contract at issue, as her

claims sounded in tort based on allegedly false statements

made to her husband’s employer. Id. at *8.

24 No. 22-2813

The Illinois Appellate Court also noted that a direct benefit

is “one contained within the provisions of the contract,” i.e.,

“one flowing directly from the agreement.” Id. at *8, *9. Exam-

ining the relevant documents, the court located “nothing in

the [Loan Contract that] provides [Snyder’s wife] with any di-

rect benefit.” Id. at *9. In fact, the court considered the connec-

tion between any benefit Snyder’s wife received and the Loan

Contract “even more nebulous” than the connection offered

in A.D. Id. And much like A.D.’s benefit—the ability to con-

sume goods purchased with her mother’s credit card—

Snyder’s wife derived a benefit “solely from her relationship

with [Snyder].” Id. at *10. Her use of his vehicle depended to-

tally on him, not any right provided by the Loan Contract. Id.

The second case, Peterson, concerned an arbitration agree-

ment included in Airbnb’s terms of service. 2023 WL 6166964,

at *1. The plaintiff was injured when a deck railing gave way

at a home booked by his friend through Airbnb. Id. at *2. Pe-

terson had an Airbnb account, so Airbnb argued he had pre-

viously agreed to its terms. Id. Peterson’s friend had booked

the house, however, and Peterson was not listed on the reser-

vation; he was simply attending a party his friend was hosting

on the property. Id. at *1–*2. The trial court refused to compel

arbitration. Id. at *1.

Airbnb appealed and argued that direct benefits estoppel

prevented Peterson from avoiding arbitration. Id. at *7.

Airbnb claimed that Peterson’s tort claims stemmed from the

benefits he received from his friend’s booking. Id. Relying on

Snyder, the court rejected this argument. Peterson’s negli-

gence claims did not rely on the terms the friend agreed to

when booking the property. And other than as an invitee to

No. 22-2813 25

the party, the plaintiff did not benefit from his friend’s book-

ing. Id.

Snyder and Peterson further persuade us that direct bene-

fits estoppel does not apply here. As in those cases, the plain-

tiffs here do not seek to enforce the Terms against Ancestry.

Rather, they seek to enforce the Illinois Genetic Information

Privacy Act against Ancestry. The grounds Illinois courts

have recognized that might allow direct benefits estoppel are

not present here.

After considering the authorities cited by the parties, those

discussed above, and those located in our search, we do not

agree with Ancestry that Illinois law binds plaintiffs as direct

beneficiaries of the Terms. Of the cases we could locate con-

sidering Illinois law, none applied direct benefits estoppel to

bind a non-signatory to a contract.

The record before us, without an allegation that plaintiffs

have accessed or used the analyses completed by Ancestry as

contemplated by the Terms, does not support applying direct

benefits estoppel. “Even assuming that [plaintiffs have] bene-

fited” from the Terms, the benefit of unused DNA analyses is

“too attenuated and indirect to force arbitration under an es-

toppel theory.” Zurich Am. Ins., 417 F.3d at 688. When coupled

with the strong presumption under Illinois law disfavoring

the binding of non-signatories to arbitration, we do not

conclude that the district court abused its discretion when it

declined to apply equitable grounds to compel plaintiffs to ar-

bitrate on the record before it.

A provision in the Terms designating minor children

whose guardians activate a DNA test kit on their behalf as

Ancestry users or parties to the Terms could lead to a different

26 No. 22-2813

result. Even if Ancestry’s future Terms include such lan-

guage, the Terms here do not. 7 The limits of Illinois law can-

not be stretched to make up for that omission.

* * *

For the reasons above, we AFFIRM the district court’s

denial of Ancestry’s motion to compel arbitration.

7 Plaintiffs have argued that the lack of such a provision makes this an

easier case than A.D. Oral Arg. 21:35–22:10. In A.D., the cardholder agree-

ment detailed how someone could become an authorized user, binding

them to that agreement’s terms (though it was undisputed that neither

A.D. nor Credit One followed any step of that procedure). 885 F.3d at

1060–61. As plaintiffs argued, the Terms here do not contain any such pro-

vision by which a non-signatory becomes an Ancestry “User” bound to

the Terms. Id. at 22:10–22:20.