Sosa v. Onfido, Inc.

CourtDistrict Court, N.D. Illinois
DecidedJanuary 5, 2021
Docket1:20-cv-04247
StatusUnknown

This text of Sosa v. Onfido, Inc. (Sosa v. Onfido, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sosa v. Onfido, Inc., (N.D. Ill. 2021).

Opinion

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

FREDY SOSA, individually, and on behalf of ) all others similarly situated, ) ) Plaintiff, ) ) v. ) No. 1:20 CV 04247 ) Hon. Marvin E. Aspen ONFIDO, INC., a Delaware corporation, ) ) Defendant. )

MEMORANDUM OPINION & ORDER

MARVIN E. ASPEN, District Judge: Plaintiff Fredy Sosa (“Plaintiff”) filed a putative class action lawsuit against Onfido, Inc. (“Defendant”), alleging that Defendant violated the Illinois Biometric Information Privacy Act, 740 ILCS 14/1, et seq (“BIPA”). (Complaint (“Compl.”) (Dkt. No. 1-1) ¶¶ 46–58.) Plaintiff’s theory is that Defendant violated BIPA because Defendant collected and stored biometric information pertaining to Plaintiff and others without obtaining written releases and providing certain information, as required by statute. (Compl. ¶¶ 53–57.) Before us is Defendant’s Motion to Stay and Compel Individual Arbitration. (Motion (Dkt. No. 20).) For the reasons set forth below, we deny the Motion. BACKGROUND Plaintiff filed this action in the Circuit Court of Cook County, Illinois Chancery Division on June 12, 2020. (Compl. at 1.) Defendant then removed the action to federal court on July 18, 2020, under 28 U.S.C. §§ 1332, 1441, 1446, and 1453. (Dkt. No. 1 at 1.) Plaintiff is a member of online marketplace Offerup, Inc. (“OfferUp”). (Compl. ¶ 33; Plaintiff’s Response to Defendant’s Motion to Stay and Compel Individual Arbitration (“Resp.”) (Dkt. No. 26) at 3 n. 1.) OfferUp is an online marketplace where people can buy and sell goods. (Compl. ¶ 33.) According to Defendant, when Plaintiff signed up for OfferUp, and each time that he logged into his account thereafter, he agreed to Offer’s Terms of Service and Privacy Policy.

(Defendant’s Memorandum of Law in Support of Its Motion to Stay and Compel Individual Arbitration (“Memo”) (Dkt. No. 21) at 2.) The Terms of Service contain an arbitration provision in Section 20. (See Memo at Ex. A–E.) According to Plaintiff, OfferUp partnered with Defendant to establish users’ identities. (Compl. ¶¶ 33–4.) On or around April 2020, Plaintiff established his identity on OfferUp by uploading photographs of his driver’s license and face. (Id. ¶ 35.) Plaintiff claims that Defendant “subsequently used biometric identification technology to extract his biometric identifiers and compare the two photographs” without advising Plaintiff that it would “collect, use, or store his biometric identifiers derived from his face.” (Id. ¶¶ 35–6.) Likewise, Plaintiff alleges that Defendant failed to provide him with a biometric data retention policy or to advise

him of whether it will permanently delete the biometric identifiers that it derived from Plaintiff’s face. (Id. ¶ 37.) Additionally, Plaintiff claims that he never signed a written release allowing Defendant to “collect, use, or store his biometric identifiers derived from his face.” (Id. ¶ 38.) As a result, Plaintiff was “exposed to the risks and harmful conditions created by [Defendant’s] violations of the BIPA. . . .” (Id. ¶ 39.) Plaintiff does not know how many individuals were similarly harmed, but he alleges that “Defendant has collected, captured, received, or otherwise obtained biometric identifiers or biometric information from at least hundreds of consumers who fall into the definition of the Class.” (Id. ¶ 42.) LEGAL STANDARD The Federal Arbitration Act (“FAA”) directs courts to treat arbitration agreements as they would any other agreement. Kindred Nursing Centers Ltd. P’ship v. Clark, 137 S. Ct. 1421,

1424 (2017). “Under the FAA, a court must compel arbitration when it finds that: (1) there is an enforceable written agreement to arbitrate; (2) the dispute falls within the scope of the arbitration agreement; and (3) a party refuses to arbitrate.” Smith v. Cavalry Portfolio Servs. LLC, No. 20 C 1375, 2020 WL 7682236, at *1 (N.D. Ill. Dec. 26, 2020). “Parties may only be compelled to arbitrate those issues they have agreed to arbitrate.” Paragon Micro, Inc. v. Bundy, 22 F. Supp. 3d 880, 887 (N.D. Ill. 2014). If there are any doubts as to the scope of the arbitrable issues, they should be resolved in favor of arbitration. Id. Once a court is satisfied that the parties have agreed to arbitrate the issues at hand, it “‘shall on application of one of the parties stay the trial of action until such arbitration has been had in accordance with the terms of the agreement.’” Id. (quoting 9 U.S.C. §§ 3, 4).

ANALYSIS A. Motion to Compel Individual Arbitration Defendant asserts that this dispute should be arbitrated based on the arbitration provision contained in the Terms of Service agreed to by OfferUp.1 (Memo at 1–4, 9–14.) Plaintiff argues that Defendant should not be able to enforce the arbitration provision within the Terms of Service because Defendant was not a party to that agreement and cannot overcome that fact by

1 Plaintiff does not admit that he agreed to OfferUp’s Terms of Service but briefs the Motion as if the Terms of Service apply. (See Resp. at 9.) We will follow the same convention here. invoking the common law doctrines of third-party beneficiary, equitable estoppel, and agency. (See generally Resp.) The question of whether a non-signatory can enforce the terms of an arbitration agreement is governed by state law. Scheurer v. Fromm Family Foods LLC, 863 F.3d 748, 752

(7th Cir. 2017). Plaintiff argues that Illinois law should apply, while Defendant advocates for Washington law based on a choice of law provision in the Terms of Service. (Resp. at 5 n.2; Memo at 5.) Since we exercise diversity jurisdiction over these claims, we will apply Illinois’s choice of law rules to select the applicable state substantive law. See, e.g., McCoy v. Iberdrola Renewables, Inc., 760 F.3d 674, 684 (7th Cir. 2014); Kaufman v. American Exp. Travel Related Servs Co., Inc., No. 07 C 1707, 2008 WL 687224, at *4 (N.D. Ill. Mar. 7, 2008) (“The case was removed pursuant to CAFA, which is part of the diversity jurisdiction statute. A district court applies the choice of law rules of the state in which it sits in a diversity case.”) (internal citations omitted).

“Before performing a choice of law analysis, the court must be sure that there is a conflict.” Moje v. Fed. Hockey League, LLC, 377 F. Supp. 3d 907, 915 (N. D. Ill. 2019). “Under Illinois choice-of-law rules, a conflict of law exists only where the application of one state’s law over that of another state will make a difference in the outcome of a case, and where there is no conflict in the relevant state law, a court will apply Illinois law.” Perdue v. Hy-Vee, Inc., 455 F. Supp. 3d 749, 758 (C.D. Ill. Apr. 20, 2020) (internal citations omitted). In this case, the parties agree that there are no outcome-determinative differences between Illinois law and Washington law. (See generally Memo; Resp.) Accordingly, we will apply Illinois law. Perdue, 455 F. Supp. 3d at 758.2 Ordinarily, only signatories to an arbitration agreement are entitled to enforce it. Ervin v.

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Sosa v. Onfido, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/sosa-v-onfido-inc-ilnd-2021.