Campbell v. Marshall International, LLC et al

Filing 185

MEMORANDUM Opinion and Order signed by the Honorable Elaine E. Bucklo on 9/25/2024. Mailed notice. (mgh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
Brandi Campbell, individually
and on behalf of all others
similarly situated,
Plaintiff,
v.
Marshall International, LLC
d/b/a Gold Club Chicago a/k/a
the Gold Room, and Pera M.
Odishoo,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

No. 20 C 5321

Memorandum Opinion and Order
Brandi Campbell worked as an exotic dancer for defendants
Marshall International, LLC d/b/a Gold Club Chicago (the “Club”)
and former manager Pera M. Odishoo. She brought this suit on behalf
of herself and other dancers for violation of various labor laws,
including

the

federal

Fair

Labor

Standards

Act

(“FLSA”).

Defendants now move to compel arbitration as to certain dancers
who have opted into the FLSA collective action.1 Because defendants

Specifically, defendants target those dancers who signed a
version of an arbitration agreement that I earlier found to be
enforceable against three dancers. See Campbell v. Marshall Int’l,
LLC, 623 F. Supp. 3d 927, 934 (N.D. Ill. 2022).
1

have waived their right to arbitrate against these dancers, the
motion is denied.
Even if an otherwise valid agreement to arbitrate exists
between parties, the right to invoke that agreement, like any other
contractual

right,

may

be

waived.

Smith

v.

GC

Servs.

Ltd.

Partnership, 907 F.3d 495, 499 (7th Cir. 2018). A party waives the
right if, “considering the totality of the circumstances, [it]
acted inconsistently with the right to arbitrate.” Kawasaki Heavy
Indus., Ltd. v. Bombardier Recreational Prods., Inc., 660 F.3d
988, 994 (7th Cir. 2011) (citation omitted). In conducting this
inquiry, “diligence or the lack thereof should weigh heavily,” and
other

factors

include

whether

the

party

“participated

in

litigation, substantially delayed its request for arbitration, or
participated in discovery.” Id. (first citing Cabinetree of Wis.
v. Kraftmaid Cabinetry, 50 F.3d 388, 391 (7th Cir. 1995), then
citing St. Mary’s Med. Ctr. of Evansville, Inc. v. Disco Aluminum
Prods. Co., 969 F.2d 585, 589–91 (7th Cir. 1992)). A review of the
litigation history is thus warranted.
After filing her suit on September 9, 2020, Campbell agreed
to

arbitrate.

Arbitration

Defendants

Association’s

failed

to

comply

requirements,

with

including

the

American

payment

of

filing fees, so on July 23, 2021, I concluded they had waived their
right to arbitrate as to Campbell and permitted her to reopen her
federal case. See ECF 16. Defendants then moved to dismiss on
2

September 8, 2021, under Federal Rule of Civil Procedure 12(b)(3),
arguing Campbell’s case had to be submitted to arbitration. ECF
23. I denied that motion because I had already concluded defendants
waived their right to arbitrate as to Campbell. ECF 38.
In the meantime, Campbell moved for conditional certification
of her FLSA claims, ECF 17, a procedural move that if successful,
allows a plaintiff bringing a FLSA collective action to notify
would-be members of the action and give them the opportunity to
“opt in,” subject to a later reevaluation of whether the suit may
proceed on a collective basis, see Nicks v. Koch Meat Co., 265 F.
Supp.

3d

841,

849

(N.D.

Ill.

2017).

Defendants

objected

to

conditional certification on the ground that the dancers had all
signed arbitration agreements, so they had to pursue any claims
outside of court. ECF 26. Consistent with Bigger v. Facebook, Inc.,
947 F.3d 1043 (7th Cir. 2020), I gave defendants an opportunity to
“establish[] by a preponderance of the evidence the existence of
a valid arbitration agreement for each employee [they sought] to
exclude from receiving notice.” Id. at 1047; see ECF 38. In an
August 1, 2022, opinion (later amended on August 25, 2022, to
adjust the case schedule) I held that defendants failed to carry
their burden except as to three dancers. ECF 46, 50. In that
opinion, I conditionally certified a collective of individuals who
worked as exotic dancers for defendants from August 12, 2018,

3

through the present.2 The opt-in period ended on January 26, 2023,
and by that time 99 dancers had opted in.
While the motion for conditional certification was fully
briefed and awaiting ruling, defendants filed an answer to the
complaint on May 25, 2022. ECF 44. They asserted 18 affirmative
defenses, but none mentioned arbitration.
After

granting

conditional

certification

of

the

FLSA

collective action, I set a fact discovery deadline of May 1, 2023.
ECF 50. On February 10, September 5, and October 16, 2023, Campbell
filed motions to compel the Club to respond to discovery requests.
ECF 71, 117, 136. On June 2, 2023, defendants filed a motion to
dismiss Odishoo under Rule 12(b)(6), ECF 81, which I later denied,
ECF 106.
The fact discovery deadline was extended to June 15, 2023.
ECF 77. On June 12, 2023, the parties jointly moved to extend the
deadline. ECF 84. In that motion, the parties observed that the
“legal and factual issues involved in the case are significant and
time-consuming” and indicated that defendants had issued written

Defendants later moved for reconsideration of this order, coming
forward with additional evidence that other dancers had signed
valid arbitration agreements. ECF 62. I denied the motion because
the evidence was previously available to defendants and so not
“newly discovered.” ECF 69. I also clarified in that order, in
response to a suggestion by defendants, that even if other dancers
had signed the version of the arbitration agreement I found
enforceable as to three dancers, those other dancers could join
the collective action because defendants had not shown they signed
the agreement when defendants were given the opportunity. Id.
2

4

discovery requests to the 99 opt-in plaintiffs and that defendants
planned to depose some of those opt-in plaintiffs. Id. ¶ 6. The
parties also requested a settlement conference before a magistrate
judge. Id. ¶ 9. I granted the motion, extending the fact discovery
deadline to July 15, 2023, and referring the case to Magistrate
Judge Gilbert for a settlement conference. ECF 86. In a subsequent
joint motion to extend the discovery deadline again, filed on July
14,

2023,

the

parties

represented

that

defendants

had

taken

depositions of Campbell and several opt-in plaintiffs and that
defendants were continuing to produce written discovery. ECF 95.
I granted the motion, extending the discovery deadline to September
15, 2023. ECF 98.
On July 24, 2023, defendants filed a motion to exclude
Campbell as class representative, ECF 99, as well as a breach of
contract counterclaim against Campbell and the opt-in dancers, ECF
101. Campbell moved to dismiss the counterclaim. ECF 108. I denied
defendants’ motion to exclude Campbell as class representative and
granted Campbell’s motion to dismiss defendants’ counterclaim on
October 13, 2023. ECF 134. Finally, after privately demanding
arbitration to plaintiff’s counsel on October 26, 2023, defendants
moved to compel arbitration on November 20, 2023. ECF 146.
Against that backdrop, defendants argue that they have not
waived their right to arbitrate against the opt-in plaintiffs
because they have raised the issue at every turn. In support of
5

their argument, defendants refer to their efforts early in the
litigation to return the case to arbitration after the initial
attempt failed, first in their opposition to Campbell’s motion to
reopen the case, and second in their Rule 12(b)(3) motion to
dismiss. But that conduct is not relevant here, since those
attempts

were

defendants

aimed

target

at

now.

Campbell,
Defendants’

not

the

waiver

opt-in
of

plaintiffs

their

right

to

arbitrate as to Campbell has already been established.
It is true that defendants raised the issue of arbitrability
as to the opt-in plaintiffs early, in response to Campbell’s motion
to

conditionally

certify

a

FLSA

collective

action.

That

distinguishes them at least in one respect from the defendants in
St.

Mary’s

and

Cabinetree,

who

did

not

so

much

as

mention

arbitration for months before seeking to compel it. See St. Mary’s,
969 F.2d at 589 (defendant “never even mention[ed] arbitration
until after it lost its motion [to dismiss]”); Cabinetree, 50 F.3d
at 389 (observing that defendant “dropped a bombshell into the
proceedings” by bringing up arbitration nine months after lawsuit
was initiated). But the posture in which defendants raised the
issue here is important. In opposing conditional certification,
defendants’ aim was to prevent other dancers from receiving notice
of the action and being allowed to opt in, not to force those

6

dancers into arbitration. At that point, the dancers were not yet
part of this action.3
The

critical

timeframe

therefore

begins

when

the

opt-in

plaintiffs joined the action, which was at the close of the optin period on January 26, 2023. From that point, defendants actively
participated in the litigation. For instance, they filed an answer
devoid of any reference to arbitration. See Smith, 907 F.3d at 500
(finding it relevant that defendant “filed its answer, but made no
mention

of

the

arbitration

agreement”).

They

also

engaged

extensively in discovery. And while some of that was responsive,
which is less probative of waiver, see Skyline Restoration, Inc.
v. First Baptist Church, No. 17 C 1234, 2017 WL 6570077, at *2
(N.D. Ill. Dec. 21, 2017), defendants also represented in motions
to extend discovery deadlines that they were actively pursuing
their own discovery, not just responding to Campbell’s. That
affirmative discovery included propounding written requests on the
opt-in plaintiffs, as well as deposing some of them.
Furthermore, defendants filed a counterclaim against Campbell
and the opt-in plaintiffs. It is true that one basis for the

It is unclear whether a FLSA defendant should be allowed to
compel arbitration after failing to carry their burden to exclude
potential opt-in plaintiffs from receiving notice under Bigger.
After all, the point of Bigger is to give FLSA defendants an
express opportunity to weed out ineligible individuals on the front
end. The parties do not substantively grapple with this question,
however, so I do not resolve it here.
3

7

counterclaim was that the opt-in plaintiffs violated the provision
of their lease agreements mandating arbitration of disputes. See
Counterclaim, ECF 101 ¶¶ 6, 28 (asserting Campbell and opt-in
plaintiffs

breached

provision

of

lease

agreements

requiring

arbitration). But defendants chose to submit the issue of whether
the opt-in plaintiffs had violated this provision to a federal
court instead of an arbitrator. See Grumhaus v. Comerica Secs.,
Inc., 223 F.3d 648, 653 (7th Cir. 2000) (party waived arbitration
by

submitting

claims

to

federal

court).

Moreover,

defendants

raised several other bases for their counterclaim unrelated to
arbitration, including that Campbell and the opt-in plaintiffs
breached provisions: requiring them to maintain daily records of
tips,

Counterclaim

¶ 26;

permitting

Gold

Club

to

impose

requirements on their use of the premises, id. ¶ 27; agreeing not
to be classified as employees, id. ¶ 30; among others. Defendants
also requested a settlement conference in this case.4
“[W]hen a party chooses to proceed in a judicial forum, there
is a rebuttable presumption that the party has waived its right to
arbitrate.” Kawasaki, 660 F.3d at 995 (citing Cabinetree, 50 F.3d

Defendants have since participated in that settlement conference.
While that participation postdates the filing of their motion to
compel arbitration, defendants could have declined to engage in
settlement discussions pending a ruling on their motion to compel.
Indeed, I stayed a ruling on their motion to compel in light of
the settlement discussions. Defendants’ acquiescence to that
decision is inconsistent with vigorously pursuing their right to
arbitrate.
4

8

at 390). By filing counterclaims against the opt-in dancers, as
well as seeking a settlement conference in this forum, defendants
triggered that presumption. Defendants presumably hoped to have
the counterclaims against the opt-in plaintiffs resolved in this
forum

and,

by

requesting

a

settlement

conference,

presumably

sought resolution of the opt-ins’ claims here, too. While the
presumption may be rebutted in “abnormal” cases, Cabinetree, 50
F.3d at 391, this is not one of them. Here there is no “concern
about a statute of limitations or doubts about whether [the
party’s] claims [are] arbitrable,” nor has the litigation taken
“unexpected turns” that make it obvious the party should be
relieved from waiver. Grumhaus, 223 F.3d at 653.
Since

the

opt-in

plaintiffs

joined

the

case,

defendants

cannot be said to have “do[ne] all [they] could reasonably have
been expected to do to make the earliest feasible determination of
whether to proceed judicially or by arbitration.” Cabinetree, 50
F.3d

at

conducted

391.

Instead,

substantial

they

responded

discovery

of

to

their

discovery
own

requests,

(including

by

deposing some opt-in plaintiffs), filed a counterclaim against the
opt-in plaintiffs, and requested a settlement conference before a
federal magistrate judge. They therefore waived their right to
arbitrate against the opt-in plaintiffs, so their motion is denied.

9

ENTER ORDER:

_____________________________
Elaine E. Bucklo
United States District Judge
Dated: September 25, 2024

10