In the 

United States Court of Appeals 

For the Seventh Circuit ____________________ 

No. 17-1956 

MATTHEW WARCIAK, 

Plaintiff-Appellant, 

v.

SUBWAY RESTAURANTS, INC., 

Defendant-Appellee. 

____________________ 

Appeal from the United States District Court for the 

Northern District of Illinois, Eastern Division. 

No. 16-cv-8694 — Charles P. Kocoras, Judge. 

____________________ 

ARGUED OCTOBER 25, 2017 — DECIDED JANUARY 25, 2018 

____________________ 

Before KANNE and SYKES, Circuit Judges, and DARROW, District Judge.

*

KANNE, Circuit Judge. Should courts apply federal or state 

law to decide whether a contract’s arbitration clause binds a 

non-signatory? In Scheurer v. Fromm Family Foods LLC, we held 

 

* The Honorable Sara Darrow, United States District Court for the Central 

District of Illinois, sitting by designation. 
2 No. 17-1956 

that courts should apply state law. 863 F.3d 748, 750 (7th Cir. 

2017). We reiterate that holding here. 

I. BACKGROUND

Matthew Warciak’s mother has a T-Mobile cell phone plan. 

In 2006, she signed an agreement with T-Mobile to begin her 

service. Then in 2012, she signed another agreement when she 

purchased a new phone. These agreements each contain arbitration clauses and govern the relationship between Warciak’s 

mother and T-Mobile. Although Warciak himself uses a 

phone on his mother’s plan and is an authorized user who can 

make changes to the account, he never signed either agreement nor is he otherwise a party to them. 

In 2016, Warciak received a spam text message promoting 

a Subway sandwich. He sued Subway under federal and state 

consumer protection statutes. Subway moved to compel arbitration. But because Subway and Warciak had never agreed 

to arbitrate—in fact they had never agreed to anything—Subway based its motion on the agreements between T-Mobile 

and Warciak’s mother. 

In the district court, the parties contested whether Warciak 

could be compelled to arbitrate and whether federal or state 

law should resolve the dispute. Subway argued that federal 

estoppel law required Warciak to arbitrate under the arbitration clauses contained in his mother’s contracts with T-Mobile. Warciak countered that Illinois estoppel law should apply. And under Illinois law, he argued, he is not bound by his 

mother’s contracts. 

The district court applied federal law and granted Subway’s motion to compel arbitration. Warciak appealed. 
No. 17-1956 3

II. ANALYSIS

The material facts underlying this appeal are undisputed, 

thus we review the district court’s ruling de novo. Scheurer, 863 

F.3d at 751–52. 

Generally, a court cannot compel a party to arbitrate a dispute unless that party has agreed to do so. See United Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582 (1960); 

Scheurer, 863 F.3d at 752. Nevertheless, some “‘traditional 

principles’ of state law allow a contract to be enforced by or 

against nonparties to the contract.” Arthur Andersen LLP v. 

Carlisle, 556 U.S. 624, 631 (2009) (quoting 21 Williston on Contracts § 57:19 (4th ed. 2001)). These traditional state law principles include: assumption, agency, veil piercing, alter ego, 

waiver, estoppel, third-party beneficiary, and incorporation 

by reference. Scheurer, 863 F.3d at 752. 

Here, Warciak and Subway have not agreed to arbitrate 

their disputes. Yet Subway argues that promissory estoppel 

binds Warciak to his mother’s agreements with T-Mobile. 

We recently clarified that—even in the arbitration context—the court must apply traditional state promissory estoppel principles to decide whether a non-party should be bound 

by the terms of another’s contract. See Scheurer, 863 F.3d at 752 

(“‘traditional principles of state law’ govern whether a contract, including an arbitration agreement, is enforceable by or 

against a non-party” (quoting Arthur Andersen, 556 U.S. at 

631)). Warciak argues that Illinois law should apply and Subway proposes no alternative. Thus, we apply Illinois law. 

Looking to Illinois law, it is clear that Subway cannot rely 

on estoppel to enforce T-Mobile’s arbitration agreement 

against Warciak. In Illinois, “[a] claim of equitable estoppel 
4 No. 17-1956 

exists where a person, by his or her statements or conduct, 

induces a second person to rely, to his or her detriment, on the 

statements or conduct of the first person.” Ervin v. Nokia, Inc., 

812 N.E.2d 534, 541 (Ill. App. Ct. 2004). Here, Subway cannot 

show detrimental reliance. In fact, it expressly disclaimed the 

argument. (R. 21, Reply brief in support of motion to compel 

arbitration, at 7 (“SUBWAY® is not pursuing arbitration 

based on a theory of detrimental reliance.”).) Having disclaimed the theory and failed to present any evidence that 

would support it, Subway cannot rely on estoppel to enforce 

the arbitration agreement against Warciak. 

III.CONCLUSION

Subway sought to enforce against Warciak an arbitration 

agreement that neither party had signed. Because Illinois 

promissory estoppel does not bind Warciak to the arbitration 

agreements between T-Mobile and his mother, we REVERSE 

the district court’s order dismissing Warciak’s suit and compelling arbitration and REMAND for further proceedings.