12C2199 HiWay 87 Stop, Inc. et al. vs. Power Buying Dealers, USA, Inc. et al. Page 1 of 3 

Order Form (01/2005) 

United States District Court, Northern District of Illinois

Name of Assigned Judge or 

Magistrate Judge John J. Tharp Jr. Sitting Judge if Other than Assigned Judge

CASE NUMBER 12 C 2199 DATE 03/28/2013 

CASE 

TITLE

HiWay 87 Stop, Inc. et al. vs. Power Buying Dealers, USA, Inc. et al. 

DOCKET ENTRY TEXT 

For the reasons stated in the Statement section of this order, the plaintiffs’ motion to compel 

arbitration [19] is granted. Per their written agreements, the parties must submit their dispute to 

non-binding arbitration. The parties are permitted to petition the arbitrator to allow (or prohibit) 

the arbitration to proceed on a class-wide basis. This case is stayed pending the arbitration. The 

parties are directed to file a joint status report with this Court upon conclusion of the arbitration. 

■[ For further details see text below.] Docketing to mail notices.

STATEMENT

Plaintiffs HiWay 87 Stop, Inc., Borgfield Investment, Inc., West Ave Express, Inc., and 

Garden Investment, Inc. filed a putative class action against Defendants Power Buying Dealers, 

USA, Inc. and Samer Odeh, alleging that the defendants owe the plaintiffs compensation for 

certain rebates and marketing funds under Vision 21 Master Agreements (“Agreements”) that 

the parties entered into. The plaintiffs initially filed their complaint in Illinois state court, and the 

defendants removed it to this Court pursuant to the Class Action Fairness Act, 28 U.S.C. § 

1332(d)(2). The defendants then moved to compel non-binding arbitration of the dispute 

pursuant to the terms of the Agreements, and their motion was granted at the parties’ agreement. 

After agreeing to arbitrate their dispute, however, the parties could not come to a further 

agreement as to whether the arbitration should proceed on a class-wide basis. The plaintiffs filed 

a demand for arbitration and informed the defendants that they had initiated one arbitration on 

behalf of the entire putative plaintiff class. The defendants objected to class-wide arbitration, and 

refused to proceed in that format. The plaintiffs now move the Court to compel the defendants to 

participate in the arbitration. 

DISCUSSION 

Each of the plaintiffs and potential class members entered into an identical Agreement 

with the defendants. The Agreements included a mandatory non-binding arbitration clause, 

stating: 

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17. Arbitration. The Parties agree that any claim or dispute arising out of this 

Agreement will be submitted to non-binding arbitration pursuant to the rules and 

procedures of the State of Illinois Arbitration Board. 

Dkt. 19-7 ¶ 17. The parties further agreed that: 

16. Governing Law. This Agreement shall be interpreted with and governed by 

the laws of the State of Illinois to which jurisdiction the parties hereto irrevocably 

submit themselves. 

Id. ¶ 16. Where, as here, the parties agree that a particular state’s laws will govern their contract, 

that state’s laws also governs the arbitration. Volt Info. Sciences, Inc. v. Bd. of Trustees of the 

Leland Stanford Jr. Univ., 489 U.S. 468, 479 (1989) (enforcing parties’ agreement to arbitrate 

under state law). Accordingly, Illinois law will govern the parties’ arbitration, and the 

defendants’ invocation of federal law through the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 

et seq., is misplaced. Tortoriello v. Gerald Nissan of N. Aurora, Inc., 379 Ill. App. 3d 214, 225, 

882 N.E.2d 157, 168 (Ill. App. Ct. 2008) (“in circumstances where parties to a contract have 

agreed to arbitrate in accordance with state law, the FAA does not apply, even where interstate 

commerce is involved”) (quoting Glazer’s Distrib. of Illinois, Inc. v. NWS-Illinois, LLC, 376 Ill. 

App. 3d 411, 421, 876 N.E.2d 203, 212 (Ill. App. Ct. 2007)). Therefore, the Illinois Uniform 

Arbitration Act (“Arbitration Act”), 710 Ill. Comp. Stat. 5/1 et seq., applies. Under Illinois law, 

non-binding arbitration is considered to be a type of arbitration. See Stratford W. Homeowners 

Ass’n v. Country Mut. Ins. Co., 338 Ill. App. 3d 288, 291, 788 N.E.2d 342, 343-44 (Ill. App. Ct. 

2003); but see Dluhos v. Strasberg, 321 F.3d 365, 370 (3d Cir. 2003) (the FAA does not apply to 

every form of non-binding arbitration). 

The arbitration provision in the Agreements is silent as to whether class arbitration is 

allowed. The provision refers to the rules and procedures of the State of Illinois Arbitration 

Board, but that entity apparently does not exist and neither party has identified what its rules and 

procedures consisted of when it was extant. See Sur-Reply (Dkt. 27) at 2 (“the State of Illinois 

Arbitration Board is no longer active, and its rules unknown”). Illinois law does not preclude 

arbitration on a class-wide basis, Kinkel v. Cingular Wireless LLC, 223 Ill.2d 1, 47-48, 857 

N.E.2d 250, 278 (2006), but the Illinois state courts appear not to have decided whether class 

arbitration can be compelled under the Arbitration Act when an arbitration agreement is silent on 

the point. However, because the parties explicitly agreed that “any . . . dispute arising out of this 

Agreement will be submitted to non-binding arbitration,” and the parties now dispute whether 

the Agreement allows for class arbitration, the question whether to proceed in arbitration as a 

class is for the arbitrator to decide. 

Federal courts applying the FAA submit the class arbitration question to the arbitrator 

when the arbitration provision is silent on the issue, as here. Green Tree Fin. Corp. v. Bazzle, 

539 U.S. 444, 451-52 (2003) (plurality opinion). Illinois state courts have also adopted that 

course of conduct when arbitration provisions are governed by the FAA. See Bess v. DirecTV, 

Inc., 351 Ill. App. 3d 1148, 1154-55, 815 N.E.2d 455, 460 (Ill. App. Ct. 2004). And Illinois 

courts interpreting the Arbitration Act regularly look for guidance to cases interpreting the FAA. 

See Rexnord Indus., LLC v. RHI Holdings, Inc., 389 Ill. App. 3d 393, 396, 906 N.E.2d 682, 684 

(Ill. App. Ct. 2009). Referring the class arbitration question to the arbitrator also fits with the 

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12C2199 HiWay 87 Stop, Inc. et al. vs. Power Buying Dealers, USA, Inc. et al. Page 3 of 3 

general Illinois rule that “when the language of an arbitration clause is broad and it is unclear 

whether the subject matter of the dispute falls within the scope of [the] arbitration agreement, the 

question of substantive arbitrability should initially be decided by the arbitrator.” Bahuriak v. 

Bill Kay Chrysler Plymouth, Inc., 337 Ill. App. 3d 714, 718, 786 N.E.2d 1045, 1049 (Ill. App. 

Ct. 2003) (quoting Donaldson, Lufkin & Jenrette Futures, Inc. v. Barr, 124 Ill.2d 435, 447-48, 

530 N.E.2d 439, 445 (Ill. 1988)). 

Here, the language of the arbitration provision is broad and it is not clear whether the 

provision allows for class arbitration. But it is clear that the Agreement requires disagreements 

to be decided by an arbitrator. The Court sees no reason to believe that Illinois law would depart 

from the conclusion reached in Green Tree Fin. Corp. that the class arbitration issue should be 

decided by the arbitrator. 

That brings us back to the matter at hand: the plaintiffs’ motion to compel arbitration of 

their claims. Because there is a mandatory arbitration provision in the Agreements, the Court 

grants the plaintiffs’ motion. Arbitration should go forward, but the parties are not precluded 

from arguing to the arbitrator that the arbitration should or should not be class-wide. Given the 

parties’ disagreement, it seems likely that the arbitrator will need to decide the class arbitration 

question at the outset before addressing the merits of the plaintiffs’ claims. 

That the arbitration is non-binding does not change this analysis. Though the parties are 

not bound by the arbitrator’s ultimate decision on the merits of their dispute, participation in the 

arbitration is required by the terms of their agreement. The parties chose Illinois law to govern 

their agreement, including their agreement to arbitrate, and for the reasons stated above, the 

Court concludes that under Illinois law the question of whether the arbitration should proceed on 

a class-wide or individual basis is itself a decision for the arbitrator; participation in the 

arbitration cannot, therefore, be conditioned on the arbitrator’s ruling on that question. 

Therefore, the parties should proceed to arbitration forthwith, and the arbitrator may 

decide what form the arbitration should take. 

 Courtroom Deputy

Initials: AIR 

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