United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
W. DARRAH United States District Court Judge
April 15, 2016, Plaintiffs filed a Complaint, Motion for
Temporary Restraining Order, and Motion to Temporarily Seal,
claiming Plaintiffs' confidential information was at risk
because of Defendant's IT security failures.
Plaintiff's Motion to Unseal the Case was granted on
December 8, 2016. Defendant has filed a Motion to Direct
Plaintiff to Proceed to Arbitration on an Individual Basis
and Enjoin Class Arbitration . For the reasons discussed
below, Defendant's Motion  is granted.
Johnson & Bell represented Plaintiffs Jason Shore and
Coinabul LLC in Hussein v. Coinabul, LLC, et al.,
No. 14-cv-5735. Plaintiffs signed a client engagement letter,
which set out the terms of the legal representation and
included an arbitration clause. The arbitration clause
Although we do not expect that any dispute between us will
arise, in the unlikely event of any dispute under this
agreement, including a dispute regarding the amount of fees
or the quality of our services, such dispute shall be
determined through binding arbitration with the
mediation/arbitration services of JAMS Endispute of Chicago,
Illinois. Any such arbitration shall be held in Chicago,
Illinois[, ] unless the parties agree in writing to some
other location. Each party to share the costs of the
arbitration proceeding equally. Each party will be
responsible for their own attorney's fees incurred as a
result of the arbitration proceeding.
(Compl. Exh. 2.) The Hussein case ended after an
Order of Deafult Judgment was entered against Coinabul, LLC
and Jason Shore on July 6, 2015. Jason Shore was dismissed
with prejudice via stipulation on July 1, 2016.
Complaint specifically alleged that Defendant's
information-technology infrastructure was compromised by
three instances of a “JBoss
Vulnerability” and that Plaintiffs' confidential
information was exposed because of those vulnerabilities. The
Motion to Temporarily Seal stated that the documents
initiating the case should be filed under seal because they
“reveal[ed], in explicit detail, where and how
[Defendant] has left its clients' confidential
information unsecured and unprotected” and left
Plaintiffs under “a heightened risk of . . .
injuries.” The Motion to Temporarily Seal was granted
on April 21, 2016. On May 4, 2016, counsel for Defendant
represented that the “JBoss Vulnerability” had
been fixed; and Plaintiffs' counsel confirmed that on the
same day. On May 26, 2016, Plaintiffs dismissed their claims
without prejudice to refiling the claims in arbitration.
12, 2016, Plaintiffs filed a related Complaint in arbitration
as well as a demand for class arbitration before JAMS.
to the Federal Arbitration Act (“FAA”):
A party aggrieved by the alleged failure, neglect, or refusal
of another to arbitrate under a written agreement for
arbitration may petition any United States district court
which, save for such agreement, would have jurisdiction under
Title 28, in a civil action or in admiralty of the subject
matter of a suit arising out of the controversy between the
parties, for an order directing that such arbitration proceed
in the manner provided for in such agreement.
9 U.S.C. § 4. “An agreement to arbitrate is
treated like any other contract, ” and a “party
can be forced to arbitrate only those matters that he or she
has agreed to submit to arbitration.” Dr. Robert L.
Meinders, D.C., Ltd. v. UnitedHealthcare, Inc., 800 F.3d
853, 857 (7th Cir. 2015).
argues that whether or not Plaintiffs may proceed to class
arbitration is a gateway question for the Court to decide and
not the arbitrator and that the client ...