553 F.Supp.3d 452
N.D. Ill.2021Background
- Two small-business plaintiffs (Sha-Poppin and Ajira) applied for PPP loans through JPMorgan Chase and allege Chase prioritized larger/politically connected customers instead of processing on a first-come, first-served basis.
- Both plaintiffs had Chase business accounts and acknowledged receipt of Chase's Deposit Account Agreement (DAA) via signed account signature cards; plaintiffs do not contest being bound by the DAA.
- The DAA contains a broad arbitration clause requiring individual arbitration for disputes "relating in any way to your account or transactions" and incorporates AAA and JAMS rules.
- Chase also relies on two online "clickwrap" agreements (Digital Services Agreement and Online Services Agreement); plaintiffs dispute adequate assent to those online agreements.
- Chase moved to compel arbitration and stay the suits; the court evaluated (1) whether an enforceable arbitration agreement exists and (2) whether arbitrability is delegated to an arbitrator.
- The court granted Chase's motion to compel arbitration under the DAA, finding the arbitration clause enforceable and that incorporation of AAA/JAMS rules clearly and unmistakably delegates arbitrability to the arbitrator.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of arbitration agreement | Plaintiffs argued limited scope and challenged assent only to online agreements; do not dispute DAA receipt but contend PPP claims are unrelated | Chase argued signed signature cards and account statements show assent to DAA; DAA governs accounts used to apply for PPP loans | Court: DAA is an enforceable written arbitration agreement; plaintiffs acknowledged DAA receipt |
| Delegation of arbitrability | Plaintiffs argued arbitrability should be decided by court and questioned whether incorporation of AAA/JAMS shows clear delegation | Chase argued DAA’s incorporation of AAA and JAMS rules supplies clear and unmistakable evidence that arbitrability is for the arbitrator | Court: Incorporation of AAA/JAMS rules clearly and unmistakably delegates arbitrability to arbitrator; arbitrator decides scope |
| Scope of arbitration (do PPP claims fall under DAA) | Plaintiffs: claims concern Chase’s PPP administration, not deposit-account transactions, so outside DAA scope | Chase: DAA’s broad phrasing covers "relating in any way to your account" and PPP applications required a Chase business account | Court: Because arbitrability was delegated, arbitrator will decide scope; court compelled arbitration under DAA |
| Assent to online (clickwrap) agreements (OSA/DSA) | Plaintiffs: Sergi declarations insufficiently specific to prove assent to online agreements | Chase: Sergi declarations show affirmative clicks agreeing to DSA/OSA | Court: Did not resolve clickwrap assent on the record; unnecessary because DAA alone compels arbitration |
Key Cases Cited
- Wallace v. Grubhub Holdings, Inc., 970 F.3d 798 (7th Cir. 2020) (recognizing federal policy favoring arbitration)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state rules that interfere with arbitration enforcement)
- Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013) (gateway arbitrability questions presumptively for court absent clear delegation)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (standard for who decides arbitrability)
- AT&T Techs., Inc. v. Communications Workers, 475 U.S. 643 (1986) (clear-and-unmistakable delegation principle)
- Sgouros v. TransUnion Corp., 817 F.3d 1029 (7th Cir. 2016) (fact-intensive analysis for online assent)
- Gore v. Alltel Commc'ns, LLC, 666 F.3d 1027 (7th Cir. 2012) (broad "arising out of or relating to" arbitration clauses)
- A.D. v. Credit One Bank, N.A., 885 F.3d 1054 (7th Cir. 2018) (elements to compel arbitration)
- Blanton v. Domino's Pizza Franchising LLC, 962 F.3d 842 (6th Cir. 2020) (incorporation of AAA rules shows clear delegation)
- Brennan v. Opus Bank, 796 F.3d 1125 (9th Cir. 2015) (discussing incorporation-of-rules question and circuits' consensus)
- Zurich Am. Ins. Co. v. Watts Indus., Inc., 466 F.3d 577 (7th Cir. 2006) (state contract formation principles applied to arbitration agreements)
- Continental Cas. Co. v. Am. Nat'l Ins. Co., 417 F.3d 727 (7th Cir. 2005) (choice-of-law and contract formation for arbitration analysis)