United States District Court, N.D. Illinois, Eastern Division
JONATHAN HUSER, and STEPHEN WELCH on behalf of themselves and the class members described below, Plaintiffs,
MIDLAND FUNDING, LLC; MIDLAND CREDIT MANAGEMENT, INC. and ENCORE CAPITAL GROUP, INC., Defendants.
MEMORANDUM OPINION AND ORDER
B. GOTTSCHALL, JUDGE
Midland Credit Management, Inc., Midland Funding LLC, and
Encore Capital Group, Inc., move to compel arbitration of the
Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. § 1692 et seq., claims of one of the two
plaintiffs in this putative class action, Jonathan Huser
(“Huser”). Huser and Welch respond that
defendants have waived their right to compel arbitration by
participating in this case and that his claims are outside
the scope of the applicable arbitration clause. For the
following reasons, the court grants the motion to compel.
seek to enforce an arbitration clause in a credit card member
agreement (“agreement”) between Huser and Juniper
Bank Delaware (“Juniper”). See
“Agreement 1, ” ECF No. 96-2 Ex. 3 to Mulcahy
Aff. at 11-12. The paragraph beneath the heading
Any claim, dispute or controversy ("Claim") by
either you or us against the other, or against the employees,
agents or assigns of the other, arising from or relating in
any way to this Agreement or your Account, or any transaction
on your Account including (without limitation) Claims based
on contract, tort (including intentional torts), fraud,
agency, negligence, statutory or regulatory provisions or any
other source of law and Claims regarding the applicability of
this arbitration clause or the validity of the entire
Agreement, shall be resolved exclusively and finally by
binding arbitration under the rules and procedures of the
arbitration Administrator selected at the time the Claim is
filed. The Administrator selection process is set forth below
For purposes of this provision, "you" includes any
authorized user on the Account, agents, beneficiaries or
assign of you; and "we" or "us" includes
our employees, parents, subsidiaries, affiliates,
beneficiaries, agents and assigns. Claims made and remedies
sought as part of a class action, private attorney general or
other representative action are subject to arbitration on an
individual basis, not on a class or
96-2 at 12 (excerpt containing this language) (emphasis in
original); ECF No. 102-1 Ex. 1 at 5 (same); see also
ECF No. 103-1 Ex. 7 at 9 (containing additional terms of
Juniper Changes Its Name; Defendants Purchase Huser's
where otherwise noted, Huser does not dispute the following
facts. Huser opened the consumer credit card account at issue
here with Juniper on February 7, 2006. Aff. of Sean Mulcahy
¶ 14, ECF No. 96-2; Aff. of Matt Hadfield ¶ 5, ECF
No. 96-4. Juniper renamed itself Barclay's on May 25,
2006. ECF No. 96-1 Ex. A at 1. Barclay's sold Huser's
account to defendants as one of a group of allegedly
delinquent accounts on December 14, 2012. Mulcahy Aff. ¶
8; Hadfield Aff. ¶¶ 7, 9; Aff. of Keith Walch
¶ 4, ECF No. 96-3 Ex. C.
plaintiffs here allege that the defendants sent them
misleading form dunning letters seeking to collect credit
card debts. See 2d Am. Compl. ("SAC")
¶¶ 24-35, ECF No. 59. Huser's claims stem from
a collection letter dated March 8, 2017. SAC Ex. A., ECF No.
original complaint filed June 14, 2017, named Mary T. Janetos
(“Janetos”) as the sole plaintiff. ECF No. 1.
Defendants did not answer the original complaint before it
was amended on July 20, 2017 (“First Amended
Complaint” or “FAC”). The FAC added Huser
as a plaintiff, see ECF No. 22 at 1.
answered the FAC on August 30, 2017. ECF No. 40. They
asserted as an affirmative defense that “[u]pon
information and belief” the plaintiffs' claims
“may be” subject to a binding arbitration clause.
Id. at 16. Janetos voluntarily dismissed her claims
that same day, August 30, 2017, leaving Huser as the sole
plaintiff. The period of court-authorized discovery began in
September 2017. See Minute Entry, Sept. 8, 2017, ECF
No. 46. In pre-discovery correspondence, defendants'
lawyer agreed to begin discovery so long as it was clear that
defendants' claim of arbitrability was not waived.
See ECF No. 103-2, Ex. B. As the parties proposed,
the court set August 31, 2018, as the deadline to complete
fact discovery. Id. Huser served written discovery
requests in October 2017, and defendants responded on
December 8, 2017. Resp. to Mot. to Compel Arb. 2, ECF No.
102; Reply 10, ECF No. 103. For their part, defendants
represent (this appears to be undisputed) that they have not
"initiated any discovery." Mot. to Compel Arb. 4,
ECF No. 96.
have been negotiating with Huser about the arbitration of his
claims since at least April 2018. Mot. to Compel. Arb. 4
(citing ECF No. 90 at 4). Correspondence between counsel
confirm this. See ECF No. 102-1 Ex. 5 at 15-18
(email thread recorded in message dated Apr. 12, 2018).
Plaintiffs' lawyer expressed confusion about the fact
that the agreement involved Juniper rather than
Barclay's, responding that defendants would need to
provide an affidavit before Huser would agree to arbitrate
his claims. See Id. at 2. One was immediately
the parties attempted to settle this and three other cases
pending in this court from July-September 2018. Plaintiffs
filed a motion in Pierre v. Midland Credit Management,
Inc., No. 16-CV-2895, ECF No. 127 (N.D. Ill. July 5,
2018), to reassign this and three other cases for the purpose
of holding a settlement conference before a magistrate judge.
Judge Leinenweber entered and continued the motion but
ordered the parties in the four cases to attend the
settlement conference. In anticipation of that conference,
the parties here jointly moved this ...