IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

 

)

JOHN MATHYS, )

)

Plaintiff, )

)

v. ) Case No. 20-cv-03927

)

THE HARTFORD GOLD GROUP, LLC ) Honorable Charles P. Kocoras

d/b/a AMERICAN HARTFORD GOLD )

GROUP; and DAVID WOLAN, )

)

Defendants. )

 )

MEMORANDUM OF LAW IN REPLY TO OPPOSITION

TO MOTION TO COMPEL ARBITRATION,

AND TO DISMISS OR STAY PROCEEDINGS

Defendants The Hartford Gold Group, LLC dba American Hartford Gold Group (“HGG”)

and David Wolan (“Wolan”) – who are referred to herein collectively as “Defendants” – respectfully

submit their memorandum of law in reply to plaintiff John Mathys’ (“Mathys”) opposition to their

motion to compel arbitration, and to dismiss or stay proceedings.1

1 At footnote 2 of his opposition, Mathys suggests HGG improperly failed to “record”

the name American Hartford Gold Group, which as a fictitious business name, is not

required to be registered with California’s Secretaryof State. However, it is properly

registered with the Los Angeles County Registrar-Recorder.

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 1 of 17 PageID #:451
I. INTRODUCTION

Mathys’ twofold argument contends: (1) HGG’s employee, Wolan, lacks standing to enforce

the arbitration agreement contained in the two Shipping and Transaction Agreements (the “STAs”)

into which HGG and Mathys undisputedly entered; and (2) it would be unconscionable for this Court

to compel arbitration because: (a) arbitration may be costly; (b) Mathys lacked the capacity to agree

to arbitrate; and (c) discovery from non-parties might be limited in arbitration. Because well-settled

law soundly refutes Mathys’ arguments, and Mathys failed to meet his burden of providing evidence

that the arbitration agreement and its delegation clause are unconscionable, Defendantsrespectfully

submit their motion to compel arbitration and dismiss Mathys’ first amended complaint (the “FAC”)

must be granted.

II. ARGUMENT

Mathys’ first contention, that Wolan lacks standing to enforce the arbitration agreement in

the STAs, wholly disregards his own allegations that Wolan acted as an agent of his employer, HGG. 

Mathys’ second contention, that the arbitration agreement and its delegation clause (collectively the

“Arbitration Agreement”) are unconscionable,failsnotonlyforlackoflegalsupport,but also because

Mathys fails to meet his burden of providing supporting evidence. 

A. AS HGG’S EMPLOYEE, WOLAN HAS STANDING TO ENFORCE THE

ARBITRATION AGREEMENT

The undisputed evidence establishesWolanwas at allrelevant times HGG’s employee, acting

on HGG’s behalf. Declaration of David Wolan (“Wolan Decl.”), ¶ 2 (“At all times relevant to this

action, I was an employee of HGG, with the title Senior Director.”) In fact, Mathys’ FAC concedes

as much. See, e.g., FAC, ¶ 6 (Wolan “is a Senior Director of Defendant HGG”); ¶ 17 (Wolan is an

1

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 2 of 17 PageID #:452
“HGG representative[]”); ¶¶ 18, 21; Exs. C, D (Wolan sent Mathys letters on HGG’s letterhead,

signing Senior Director,The Hartford Gold Group, with an HGG email, Dwolan@hgoldgroup.com);

¶ 23 (Wolan encouraged Mathys to invest assets with HGG);¶24(“Wolan’s knowledge of Plaintiff’s

advanced age is imputable to Defendant HGG”). 

Having acted on behalf of his employer, HGG, Wolan has standing to enforce the Arbitration

Agreement contained in the two identical STAs Mathys entered into with HGG. Hoffman v. Deloitte

& Touche, 143 F.Supp.2d 995, 1005 (N.D. Ill. 2001): non-signatory agents are covered by signatory

principals’ arbitration agreements where, like here, “only by allowing the non-signatories to invoke

arbitration would evisceration of the agreements be avoided”; Howells v. Hoffman, 209 Ill.App.3d

1004, 1009 (1991): an arbitration provision limited to “controversies which may arise between us”

protects the signatory’s employee. Because a companylike HGG can onlyact through its employees,

allowing a contracting party to avoid arbitration by simply naming an employee of the signatory

company as a defendant would effectively render an arbitration agreement meaningless. Indeed, in

Dunmire v. Schneider, 481 F.3d 465, 466-467 (7th Cir. 2007), the Seventh Circuit rejected the exact

same argument Mathys asserts here, that a non-signatory employee lacked standing to enforce his

employer’s arbitration agreement stating: “Every dispute between customer and [Morgan Stanley]...

shall be settled by arbitration....,” because it did not mention employees. (Brackets original.) 

Curiously disregarding not onlythe undisputed evidence – but even his own allegations – that

Wolan acted as HGG’s employee, Mathys contends Wolan lacks standing to enforce the Arbitration

Agreement because he is not an intended third party beneficiary of the STAs. Wolan never claimed

to be a third party beneficiary of the STAs – though he likely is (Dunmire, 481 F.3d at 467: “To the

extent that there is any doubt about this, courts regularly treat employees as third-party beneficiaries

2

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 3 of 17 PageID #:453
of arbitration clauses such as this... No appellate decision goes the other way”) – and Mathys wholly

ignores his own authority confirming that Illinois law allows a non-signatoryemployee or agent, like

Wolan, to enforce a signatory-principal’s arbitration agreement. Applications Software Tech. LLCv.

Kapadia, 2018 WL 3122173, at *9 (N.D. Ill. June 26, 2018): like third party beneficiary, agency is

one of six contract-based theories upon which an arbitration agreement may cover a non-signatory. 

Because Wolan can enforce theArbitration Agreement as HGG’s employee, none of Mathys’

third party beneficiary authorities is relevant, and none even suggests that Wolan, as HGG’s agent,

lacks standing to enforce the Arbitration Agreement. See Continental Casualty Co.v. American Nat.

Ins. Co., 417 F.3d 727, 735 (7th Cir. 2005): a non-signatory had standing to enforce the arbitration

agreement as a third party beneficiary; Manor v. Copart Inc., 2017 WL4785924, at *7 (N.D. Ill. Oct.

24,2017): a non-signatorysubsidiaryhad standing to enforce an arbitration agreement as a third party

beneficiary; Safety Solutions, Inc. v. City of Chicago, 2011 WL 3652446, at *10, 12-13 (N.D. Ill.

Aug.18,2011): an individualplaintiff lackedstanding to bring claims arising from her wholly-owned

corporation’s contract because “the factual allegations do not support any claims or damages that

could be plausibly construed as relating to [her].” In contrast here, though Wolan at all times acted

solely as HGG’s employee, Mathys sued Wolan as an individual, and seeks damages against Wolan

personally, so he has standing to enforce the Arbitration Agreement.

B. THEARBITRATORDECIDESTHETHRESHOLDARBITRABILITYISSUE

As discussed in § 3.Cof Defendants’ motion, the Arbitration Agreement – stating in relevant

part: “Any dispute, claim, or controversy arising out of this Agreement or otherwise between HGG

and the Customer, including but not limited to ... the scope and applicability of the agreement to

arbitrate contained in this paragraph,shallbe determined byarbitration...”– clearlyand unmistakably

3

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 4 of 17 PageID #:454
delegates to the arbitrator the threshold arbitrability issue. Rent-A-Center, West, Inc. v. Jackson, 561

U.S. 63, 69-70, 130 S.Ct. 2772, 177 L.Ed.2d 40 (2010): “We have recognized that parties can agree

to arbitrate ‘gateway’ questions of ‘arbitrability,’ such as whether the parties have agreed to arbitrate

or whether their agreement covers a particular controversy.” Mathys’ own authority agrees. Lee v.

Uber Technologies, Inc., 208 F.Supp.3d 886, 891-892 (N.D. Ill. 2016): clause delegatingto arbitrator

“disputes arising out of or relating to interpretation or application of this Arbitration Provision,

including the enforceability, revocability or validity of the Arbitration Provision” found to be “clear

and unmistakable in delegating the question of arbitrability to an arbitrator.” 

Mathys fares no better with his other authorities. In re Dealer Management Systems Antitrust

Litigation, 362 F.Supp.3d 510 (N.D. Ill. 2019), involved the motion of one defendant (CDK) seeking

to compel arbitration under an agreement another defendant (Reynolds), CDK’s competitor, entered

into with the plaintiffs. Because CDK did not even argue it was entitled to the benefit of Reynolds’

agreement to arbitrate arbitrability, the Court did not assess the (conceded) issue, and “proceed[ed]

on the assumption that the Court has authority to address the threshold issue of the arbitrability of

Plaintiffs’ claims against CDK.” Id., at 526-527.

In CCC Info. Serv. Inc. v. Tractable Inc., 2019 WL 2011092, at *1-2 (N.D. Ill. May 7, 2019),

Chen, an employee of the plaintiff’s rival, Tractable, secured a license from the plaintiff by falsely

representing he worked for “JA Appraisal,” which never even existed. Denying Tractable’s motion

to compel arbitration pursuant to the fraudulentlyobtained license, the Court explained “a reasonable

jury could conclude that plaintiff reasonably believed that it was granting a license to either Chen

or JA Appraisal – but not to Tractable....” Id., at *5. Notably, unlike Wolan – HGG’s undisputed

agent – Chen and “JA Appraisal” expressly represented they were not acting as anyone’s agent. Id.

4

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 5 of 17 PageID #:455
In Applications Software Tech, 2018WL3122173, at *9 (granting the defendant’s motion to

compel arbitration), immediately after the sentence Mathys quotes at p. 4 of his opposition, the Court

acknowledged Illinois courts maybind non-signatoriesto arbitration agreements upon contract-based

theories such as agency. And, in Kramer v. Toyota Motor Corp., 705 F.3d 1122,1125 (9th Cir.2013),

after “vigorously litigating” for nearlytwo years,Toyota unsuccessfullysoughttocompel arbitration

under agreements between plaintiffs and the auto dealerships – who were neither parties to the action

nor Toyota’s agents – from whom they purchased allegedly defective vehicles. Affirming denial of

Toyota’s motion, the Ninth Circuit noted: “The United States Supreme Court has held that a litigant

who is not a party to an arbitration agreement may invoke arbitration under the FAA if [as here] the

relevant state contract law allows the litigant to enforce the agreement.” Id., at 1128. Mathys’ final

authority, National Oilwell Varco, L.P. v. Sadagopan, 2018 WL 276363 (S.D. Tex. Jan. 3, 2018),

involves Texas’ one-satisfaction rule, but neither arbitration nor anything else relevant here. 

Not only does the STA’s Arbitration Agreement “clearly and unmistakably” delegate to the

arbitrator the threshold arbitrability issue, but it designates JAMS as the arbitration administrator and

JAMS’ rules as governing. Declaration of Jennifer Reubel (“Reubel Decl.”), ¶ 3; Ex. A, ¶ 12: “The

arbitration shall be administered byJAMS pursuant to the rules promulgated byJAMS.” JAMS Rule

11(b) – readilyavailable atwww.jamsadr.com/rules-comprehensive-arbitration/#Rule-1– expressly

delegates to the arbitrator the arbitrability issue:

Jurisdictional and arbitrability disputes, including disputes over the

formation,existence,validity, interpretation orscope of the agreement

under which Arbitration is sought, and who are proper parties to the

Arbitration, shall be submitted to and ruled on by the Arbitrator. The

Arbitrator has the authority to determine jurisdiction and arbitrability

as a preliminary matter. 

5

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 6 of 17 PageID #:456
C. THEARBITRATIONAGREEMENTISENFORCEABLEANDAPPLICABLE

Given the “emphatic federal policy in favor of arbitral dispute resolution,” Marmet Health

Care Center, Inc.v.Brown,565 U.S. 530, 533, 132 S.Ct. 1201, 182 L.Ed.2d 42 (2012), Mathys bears 

the heavyburden of proving his claims “are unsuitable for arbitration.” Green Tree Financial Corp.-

Alabama v. Randolph,531 U.S. 79, 91, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000). Neither the evidence

nor the applicable law even marginally supports Mathys’ contention that the Arbitration Agreement

is unconscionable.

1. The Arbitration Agreement is not procedurally unconscionable

Mathys contends the Arbitration Agreement is procedurally unconscionable because: (a) it

is printed in a small, single-spaced font; (b) he did not consult with his attorney before signing his

two STAs in December 2018 and October 2019; and (c) he “lacked capacity to meaningfully assent

to the terms at issue.” An arbitration agreement may be procedurallyunconscionable “where a term

is so difficult to find, read, or understand that the plaintiff cannot fairly be said to have been aware

he was agreeing to it.” Davis v. Fenton, 26 F.Supp.3d 727, 737 (N.D. Ill. 2014.)

First, the Arbitration Agreement is printed in the same size and spaced font as the rest of the

STA, though its disclosure that “BY AGREEING TO ARBITRATE ANY CLAIMOR DISPUTE

PURSUANTTOTHIS PARAGRAPH 12, THEPARTIESWAIVE ANY RIGHTSTHEY MAY

OTHERWISEHAVETOACOURTORJURYTRIAL” is in bold, upper case type. Reubel Decl.;

Ex. A, ¶ 12 (emphasis original.) And, it is appropriately, conspicuously situated within the section

of the STA headed “DISPUTE RESOLUTION.” Id. (emphasis original.) Davis, 26 F.Supp.3d at

738: “An arbitration clause does not need to be emphasized with any special font or typeface to

prevent it from being procedurally unconscionable; it just needs to be conspicuous.”

6

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 7 of 17 PageID #:457
Mathys’ purported inability to understand the STA’s Arbitration Agreement does not render

it unconscionable. Melena v. Anheuser-Busch, Inc., 219 Ill.2d 135, 147 (2006): “That the consumer

did not read or understand the arbitration clause does not prevent the consumer from consenting to

it. Nor does the consumer’s ignorance that an arbitration clause is included on the form”; see also

Falkenberg v. CB Tax Franchise Systems, LP, 637 F.3d 801, 809 (7th Cir. 2011): “Ignorance of the

contract’s arbitration provision is no defense if they failed to read the contract before signing.” 

Moreover, Mathys’ belated claim that hedid not understand the Arbitration Agreement diametrically

contradicts his affirmative representation that he “has carefully read, understands and agrees to all

the terms and conditions of this agreement [the STA containing the Arbitration Agreement]” – which

he signed on two separate occasions. Reubel Decl., ¶ 3; Ex. A, p.5. 

Second, if Mathys failed to consult with his attorney before signing either STA, he made that

decision unilaterally,anddirectlycontrarytoHGG’surgingthat he obtain legal advice before signing. 

Reubel Decl., ¶ 3; Ex. A, preamble: “ITISIMPORTANTTHATYOUCAREFULLYREADAND

FULLY UNDERSTAND THISAGREEMENT,WHICHGOVERNSTHEPARTIES’ RIGHTS

AND OBLIGATIONS, LIMITS HGG’S LIABILITY, AND THAT YOU CONSULT WITH

YOUR ATTORNEY AND/OR FINANCIAL ADVISOR.” (Emphasis original.)

Third, Mathys’ contention that he lacked capacity to meaningfully assent to the Arbitration

Agreement issoundlyrefuted byundisputed evidence that he never disclosed anypurported cognitive

issue to Defendants, and no cognitive issue was apparent to Defendants, who to the contrary found

him to be intelligent,witha sharp mind. Wolan Decl.,¶2; Declaration of Paul Stone (“Stone Decl.”),

¶ 2. Even if true, Mathys’ belated claim he did not understand the Arbitration Agreement would still

be irrelevant here. Melena, 219 Ill.2d at 147; Village of South Elgin v. Waste Mgmt. of Illinois, 810

7

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 8 of 17 PageID #:458
N.E.2d 658, 670 (Ill.App. 2004): “‘Intent’ refers to objective manifestations of intent in the words

of the contract and the actions of the parties; it does not encompass one party’s secret, undisclosed

intentions or purely subjective understandings of which the other party is unaware.”

Moreover, Mathys proffers these memory lapse anecdotes to “prove” his alleged cognitive

decline precluded him from understanding the Arbitration Agreement, but none of his witnesses is

qualified to render an expert opinion as to such causation. Frisone v. U.S., 270 F.2d 401, 403 (9th

Cir. 1959): the existence of mental illness serious enough to cause permanent memory impairment

required expert testimony because “[i]t is well settled that only expert testimony will be allowed on

technical questions of causation.” 

Although Jennifer Wilson-Binotti, Psy.D. might be qualified to render an expert opinion on

Mathys’ cognitive ability at the time of her evaluation of him on August 27, 2020 (20 months after

he signed the first STA and 10 months after he signed the second STA), Mathys offers no evidence

whatsoever – or even argument, for that matter – establishing her qualifications, as required byRule

702 of the Federal Rules of Evidence (the “FRE”). Lewis v. CITGO Petroleum Corp., 561 F.3d 698,

706 (7th Cir. 2009): the proponent of expert testimony bears the burden of establishing the expert’s

qualifications; Advisory Committee Notes to 2000 amendment to FRE 702: “the proponent has the

burden of establishing that the pertinent admissibility requirements are met by a preponderance of

the evidence.” (Italics supplied.) Having offered no evidence of Dr. Wilson-Binotti’s qualifications,

Mathys undeniably failed to meet his burden, but even if he had, the doctor’s report is inadmissible

hearsay and not authenticated. (FRE 802, 901.) Moreover, the report is wholly irrelevant (FRE 402)

because it does not appear to assess Mathys’ ability to understand the Arbitration Agreement, though

it does conclude that, as of August 27, 2020, Mathys’ complex processing, abstract reasoning, and

8

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 9 of 17 PageID #:459
nonverbal logical reasoning abilities registered in the high-average to above average range – which

seemingly refutes Mathys’ cognitive decline argument. 

Mathys dubiouslycontendshispurportedcognitive decline prevented himfrom understanding

only the Arbitration Agreement, but not the rest of the 5-page STA, which he presumably concedes

he was competent to enter into because he has sued HGG for breach of the October 2019 STA. FAC,

CountIX. Mathys’ own authoritylabels illogical his after-the-fact revelation that purported cognitive

decline prevented him from understanding only the Arbitration Agreement, one of 14 sections of the

STA. Spahr v. Secco, 330 F.3d 1266, 1273: “Unlike a claim of fraud in the inducement, which can

be directedatindividual provisionsin acontract, amental capacitychallenge canlogicallybe directed

only at the entire contract.” 

The motive for Mathys’ selective purported inabilityto understand the Arbitration Agreement

is no mystery. In Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445-446, 126 S.Ct. 1204,

163 L.Ed.2d 1038 (“Buckeye”), the Supreme Court held “unless the challenge is to the arbitration

clause itself, the issue of the contract’s validity is considered by the arbitrator in the first instance.” 

Because Mathys’ claim that he lacked the capacity to understand only the Arbitration Agreement but

not the rest of the STAs he signed twice is illogical – as his own authority recognizes (Spahr, 330

F.3d at 1273) – Mathys’ belated capacity contention can only logically be considered a challenge to

the entire STAs, a question Buckeye says is decided by the arbitrator. See also Primerica Life Ins.

Co. v. Brown, 304 F.3d 469, 472 (5th Cir. 2002): a mental capacity defense challenges the agreement

as a whole and is “part of the underlying dispute between the parties which, in light of Prima Paint

[Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967)] and its progeny, must be submitted to the

arbitrator.”

9

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 10 of 17 PageID #:460
But, in footnote 1 on page 444 of Buckeye, acknowledging the distinction between contract

validity and contract formation, the Supreme Court indicated that its opinion “does not speak to the

issue... whether the signor lacked the mental capacityto assent.” Accordingly, whether the arbitrator

or the Court considers Mathys’ lack of capacityclaim remains somewhat unsettled, but 100% certain

is that the undisputed evidence establishes Mathys never disclosed any purported cognitive issues

to Defendants, nor were any purported cognitive issues apparent to Defendants in their dealings with

Mathys (Wolan Decl., ¶ 2; Stone Decl., ¶ 2), and Mathys offers no admissible evidence whatsoever

that he lacked the mental capacity to assent to the Arbitration Agreement (or the entire STAs for that

matter).2 Thus, regardless who decides the arbitrability issue in light of Mathys’ purported capacity

allegation, Mathys wholly fails to meet his burden of establishing through admissible evidence that

his claims are not arbitrable. Green Tree Financial Corp.-Alabama, 531 U.S. at 91. 

Mathys’ remaining authorities do not support his argument either. In Frank’s Maintenance

&Engineering, Inc. v.C.A. Roberts Co.,408 N.E.2d 403,410 (Ill.App.1980)(“Frank’s”), a damages

limitation clause was unenforceable because it was printed on the back of an acknowledgment form,

and the clause directing the plaintiff’s attention to conditions on the back of the form was “stamped

over, indicating that legend was irrelevant.” In contrast here, the Arbitration Agreement is quite

conspicuously printed beneath the heading “DISPUTE RESOLUTION” and prominently notifies

Mathys that: “BY AGREEING TO ARBITRATE ANY CLAIM OR DISPUTE PURSUANT TO

THIS PARAGRAPH 12, THE PARTIES WAIVE ANY RIGHTS THEY MAY OTHERWISE

HAVETOA COURT OR JURY TRIAL.” Reubel Decl., ¶ 3; Ex.A, ¶ 12 (emphasis original.) The

2 Mathys’ testimony at ¶ 3 of his declaration that he has taken medication for memory

loss since March 2, 2020 is irrelevant because it postdates his signing of both STAs

and has no evidentiary connection to his ability to understand the agreements.

10

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 11 of 17 PageID #:461
Court in Frank’s also noted that “prior contracts between the parties” establishing a consistently

adhered to policy of excluding consequential damages may have refuted the plaintiff’s claim that the

provision was unconscionable – noteworthy here because Mathys signed two identical STAs with

the Arbitration Agreement ten months apart.3

Unlike Mathys here, the plaintiff in Amirmotazedi v. Viacom, Inc., 768 F.Supp.2d 256, 263

(D.D.C. 2011), presented evidence suggesting she lacked capacity to assent to an agreement because

she was inebriated when she signed it. And, in Gore v. Gadd, 522 P.2d 212, 213-214 (Ore. 1974),

a psychiatrist’s testimony that the plaintiff’s psychosis caused her to act compulsively in selling her

home was “insufficient to establish that plaintiff was incompetent” to enter into the contract. Like

Mathys here, the plaintiff in Gore “outwardlyappeared to be fullycompetent to enter into contractual

relations” when she executed the contract. Id., at 213.

2. The Arbitration Agreement is not substantively unconscionable

An agreement may be substantively unconscionable where “the terms are so one-sided as to

oppress or unfairly surprise an innocent party.” Davis, 26 F.Supp.3d at 737-739. Mathys claims the

Arbitration Agreement is unconscionable because arbitrationmaybe costly, and hemaybe precluded

from obtaining discovery from out-of-state third parties. Mathys does not come close to meeting his

burden on either ground. 

To avoid arbitration based upon the purported financial burden, Mathys “must provide some

individualized evidence that [he] likely will face prohibitive costs in the arbitration at issue and that

3 Mathys’ contention that the STA he signed in December 2018 could not compel him

to arbitrate claims arisingfromhis October 2019 investmentsis disingenuous because

the identical STAs Mathys signed indicate they “shall govern all pending and future

precious metals transactions between the parties hereto.” Reubel Decl., ¶ 3; Ex. A,

p. 1, preamble. (Italics supplied.)

11

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 12 of 17 PageID #:462
[he] is financially incapable of meeting those costs.” Livingston v. Associates Finance, Inc., 339

F.3d 553, 557 (7thCir.2003)(italics supplied). Mathys proffers no actual evidence of his likely costs,

but does argue he would incur up to $3,000 in filing fees, and half of the arbitrator’s fees, which he

claims will total “tens of thousands of dollars” at the rate of between $450 and $600 per hour.4 Even

assuming Mathys’ pure speculation as to the arbitrator’s fees were realistic, he offers no evidence 

whatsoever even suggesting his share of the fees would be prohibitive, as is his burden. Moreover,

as discussed in Defendants’ motion, JAMS’ rules authorize the arbitrator to reallocate the arbitration

costs – Declaration of David J. Cohen (“Cohen Decl.”), ¶ 6; Ex. D, Rule 24(f) – which Defendants

would agree to in the event the arbitrator or this Court found that arbitration would be prohibitively

costly for Mathys.

Equallyproblematic is Mathys’ wholesale failure to demonstrate he is “financiallyincapable”

of meeting the arbitration costs. At ¶ 7 of his declaration, Mathys testifies he has “no ongoing (biweekly) salary from any source of occupational income,” which means he is retired, but does not

exclude other types of income – such as pensions, social security, investments, etc. – and so narrowly

crafted, actually suggests he probably does have other undisclosed sources of income.

Mathys produced no admissible evidence of his assets, offering onlythe inadmissible hearsay

testimony of his girlfriend, ShirleyRoy, that as of two weeks ago, Mathys had savings totaling more

than $300,000, plus about $20,000 in other assets. Declaration of ShirleyRoy, ¶ 12: testimony based

upon her review of unauthenticated, hearsay, and (some unspecified) documents and “speaking with

John.” In addition to the nonexistent admissible evidence regardingMathys’ total income and assets,

4 Mathys argues he “would have to pay half of the JAMS arbitrator’s fees incurred in

adjudicating the arbitrability of [his] claims,” but of course, those fees would all be

avoided if he simply complied with the Arbitration Agreement he agreed to twice. 

12

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 13 of 17 PageID #:463
the requisite meaningful assessment of whether arbitration would be prohibitively costly would, at

the very least, require evidence of Mathys’ living expenses. Shipp v. XA, Inc., No. 06 C 1193, 2006

WL 2583720, at *6-7 (N.D. Ill. Aug. 31, 2006) (granting petition to compel arbitration):

Shipp’s declaration does not disclose whether she has other financial

resources, or reveal her financial obligations to permit a useful assessment of

her financial position. Although she declares that her husband is unemployed

and that she has “significant child care expenses,” she fails to present any

evidence to corroborate those claims or to quantify her expenses. In short,

Shipp fails to demonstrate the kind of financial distress necessary to deny

arbitration.

All Mathys’ evidence demonstrates is that he is an avid traveler, having traveled (at least) to

Montana, Wisconsin, and Chile within the last year alone. Declarations of Shirley Roy, ¶¶ 7, 9; and

Diane Snow, ¶ 4. According to www.zillow.com, Mathys lives in a 3,530 square foot, 6 bedroom,

31⁄2 bathroom house with an estimated value exceeding $1,000,000. Supplemental Declaration of

David J. Cohen, ¶ 3; Ex. A. Although frequent domestic and international travel and living in a nice

house admittedly does not conclusively prove anything, it assuredly suggests that Mathys’ financial

condition and consequent abilityto afford the cost of arbitration is eminentlystronger than the parties

seeking to avoid arbitration in the opinions upon which Mathys relies. See, e.g., Arnold v. Goldstar

Financial Systems, Inc., 2002 WL1941546, at *9-10 (N.D. Ill. Aug. 22, 2002): in a case arising from

a credit repair services agreement, “defendants do not take issue with the view that individuals, like

plaintiffs, with debt problems are unable to afford such [arbitration] costs”; Morrison v. Circuit City

Stores, Inc., 317 F.3d 646, 669, 675 (6th

 Cir. 2003): affirming an order compelling arbitration, but

finding a cost-splitting provision – which the STAs do not contain – should have been severed from

the arbitration agreement because a recently terminated employee likely could not afford to pay her

share of arbitration costs; Phillips v. Associates Home Equity Services, Inc., 179 F.Supp.2d 840, 846-

13

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 14 of 17 PageID #:464
847 (N.D.Ill.2001): plaintiff’s evidence that she was in “severe financial straits” was found credible

considering her inclusion in the sub-prime loan market targeted bythe defendant.5 Thus, Mathys has 

wholly failed to meet his burden of producing specific evidence that arbitration would likely be

prohibitively expensive, and that he cannot afford those costs. Davis, 26 F.Supp.3d at 739.

At page 13 of his opposition, Mathys concedes whether he could obtain discovery from outof-state non-parties in arbitration “is not settled,” relying on authorities from other circuits, only one

of which actually ruled on the issue, while disregarding authority from this district supporting his

right to such discovery. Amgen, Inc. v. Kidney Center of Delaware County, Ltd., 879 F.Supp. 878,

882 (N.D.Ill. 1995)(granting motion to compel compliance with subpoena for deposition testimony

and production of documents, issued to “third persons not parties to the arbitration proceedings”):

Bydefinition, the FAA applies onlyto actions involving interstate commerce.

... The arbitration of any action affecting interstate commerce is likely to

involve parties and witnesses located in more than one district or state. To

find that the wording of the FAA precludes issuance and enforcement of an

arbitrator’s subpoena of a witness outside the district in which he or she sits,

particularlywhere, as here, such discovery is agreed upon by the parties to the

arbitration, would likely lead to rejection of arbitration clauses altogether.

That would be contrary to the intent of Congress in enacting a national policy

favoring arbitration.

See also Federal Ins. Co. v. Law Offices of Edward T. Joyce, 2008 WL 4348604 (N.D.Ill. Mar. 13,

2008): district court has authority to enforce discovery subpoena arbitrators issued to a law firm that

was not a party to the arbitration. Furthermore, the Supreme Court has held limitations on discovery

do not render an arbitration agreement unenforceable. Gilmer v. Interstate/Johnson Lane Corp., 500

U.S. 20, 31, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991):

5

In contrast,HGG’s customerslikeMathys,whoinvestinpreciousmetals, are typically

financially stable, if not affluent.

14

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 15 of 17 PageID #:465
Gilmer also complainsthatthediscoveryallowedinarbitrationismore limited

than in the federal courts, which he contends will make it difficult to prove

discrimination. It is unlikely, however, that age discrimination claims require

more extensive discovery than other claims we have found to be arbitrable,

such as RICO and antitrust claims... Although those [arbitration discovery]

procedures might not be as extensive as in the federal courts, by agreeing to

arbitrate, a party trades the procedures and opportunity for review of the

courtroom for the simplicity, informality, and expedition of arbitration.

Ultimately, the evidence will prove Defendants fully complied with the STAs, and Mathys

simply ignored their recommendation – in a section of the STAs Mathys does not claim he failed to

understand – that he hold onto his investment for a few years. Mathys cannot avoid the Arbitration

Agreement to which he twice agreed by alleging ten mostly repetitive counts arising from the same

simple set of purported facts, then complaining the breadth of the case will make arbitration costly. 

Having offered no admissible evidence supporting his contention that the Arbitration Agreement is

unconscionable, Mathys failed to meet his burden, necessitating the granting of Defendants’ motion.

III. CONCLUSION

Based upon the foregoing, Defendants respectfully request that this Court grant their motion

to compel arbitration and dismiss Mathys’ first amended complaint, or alternatively,stay this action.

Dated: September 9, 2020

Respectfully submitted,

By: /s/ James Argionis By: /s/ David J. Cohen 

James Argionis (Bar No. 6228773) David J. Cohen (California Bar No. 136738)

Corey Hickman (Bar No. 6317871) Admitted pro hac vice

COZEN O’CONNOR TOVAR & COHEN LLP

123 North Wacker Drive, Suite 1800 5525 Oakdale Avenue, Suite 350

Chicago, Illinois 60606 Woodland Hills, California 91364

Telephone: (312) 474-7900 Telephone: (818) 615-0770/(310) 420-4383

Facsimile: (312) 382-8910 Facsimile: (818) 615-0777

jargionis@cozen.com david@tovarandcohen.com

chickman@cozen.com

15

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 16 of 17 PageID #:466
CERTIFICATE OF SERVICE

I, David J. Cohen, an attorney, hereby certify on September 9, 2020, I caused to be

electronically filed a true and correct copy of the foregoing MEMORANDUM OF LAW IN

REPLY TO OPPOSITION TO MOTIONTOCOMPELARBITRATION,ANDTODISMISS

OR STAY PROCEEDINGS with the Clerk of the Court using CM/ECF, which sent electronic

notification of such filing to all Counsel of Record.

 /s/ David J. Cohen 

 David J. Cohen

16

Case: 1:20-cv-03927 Document #: 18 Filed: 09/09/20 Page 17 of 17 PageID #:467