Williams v. Opportunity Financial, LLC
1:24-cv-09730
| N.D. Ill. | Jul 17, 2025Background
- Danielle Williams, an Indiana resident, obtained a $1,800 internet loan from Opportunity Financial, LLC (OppLoans) with a 159.24% interest rate.
- Williams alleges the loan violates Indiana’s 36% interest rate cap for consumer loans, enforced through the Indiana Uniform Consumer Credit Code (IUCCC).
- OppLoans operates via a "Bank Partner Model," originating loans through out-of-state banks (here, a Utah-chartered bank) to avoid state interest caps.
- The Promissory Note includes a broad arbitration clause, governed by the Federal Arbitration Act (FAA), and a choice-of-law provision selecting Utah law (except for arbitration).
- Williams filed a putative class action under Indiana law and RICO, and OppLoans moved to compel arbitration and stay litigation per the FAA.
Issues
| Issue | Plaintiff’s Argument | Defendant’s Argument | Held |
|---|---|---|---|
| Prospective Waiver Doctrine | Arbitration clause waives statutory rights under Indiana’s interest cap. | Arbitration clause does not waive statutory rights; arbitrator decides law to apply. | Doctrine not implicated; arbitrator decides choice of law. |
| Applicability of Indiana Law in Arbitration | Arbitration, via choice-of-law provision, mandates Utah law thus preempting Indiana protections. | FAA governs arbitration clause and arbitrator can apply Indiana law if appropriate. | Arbitrator determines which law applies. |
| Severability of Arbitration Clause | Arbitration clause invalid because Promissory Note is usurious and illegal in Indiana. | Challenge is to underlying contract, not the arbitration clause itself. | Issue of contract validity is for arbitrator. |
| Enforcement of Arbitration | Arbitration clause unenforceable due to state law and public policy. | FAA requires enforcement; state law arguments for arbitrator. | Court compels arbitration and stays case. |
Key Cases Cited
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (arbitration clauses are severable from contracts and validity challenges go to arbitrator unless specific to the clause)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (arbitration does not require waiver of substantive statutory rights)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (FAA reflects federal policy favoring arbitration)
- Vimar Seguros Y Reaseguros v. M/V Sky Reefer, 515 U.S. 528 (arbitrator decides choice-of-law in arbitration agreements)