Joshua Harris v. W6LS, INC ., doing business as WITH U

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 24-2056
JOSHUA H ARRIS and DONITA O LDS , on behalf of plaintiffs and
the class members described herein,
Plaintiffs-Appellees,
v.
W6LS, I NC ., doing business as WITH U and WITH U LOANS , and
C ALIBER F INANCIAL S ERVICES , I NC .,
Defendants-Appellants.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:23-cv-16429 — Lindsay C. Jenkins, Judge.
____________________
A RGUED F EBRUARY 12, 2025 — DECIDED M ARCH 31, 2026
A MENDED JUNE 5, 2026
____________________
Before PRYOR , K OLAR , and M ALDONADO, Circuit Judges.
K OLAR , Circuit Judge. Plaintiffs went online and borrowed
$600 from defendants at interest rates of nearly 500% per year.
They later sued, invoking their consumer rights under Illinois
and federal law. Defendants sought to enforce an arbitration

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2 No. 24-2056
provision in their loan contracts delegating all questions of ar-
bitrability to the arbitrator, while also requiring that these
questions be resolved under a body of tribal contract law that
did not exist at the time the plaintiffs took out their loans. It is
well-established, however, that “arbitration is a matter of con-
tract.” Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67
(2010). And contracts require mutual assent. Here, defendants
drafted an arbitration agreement directing an arbitrator to ap-
ply a body of law that did not exist, which they maintained a
unilateral ability to invent. Absent any indication that the
plaintiffs intended this, we find no mutual assent. We, there-
fore, affirm the district court’s order denying defendants’ mo-
tion to compel arbitration.
I. Background
Defendant W6LS, Inc. offers consumer loans online as
“WithU Loans.” Caliber Financial Services, Inc. manages the
underwriting and collection of the online loans given out by
W6LS. W6LS and Caliber are corporations organized under
the laws of the Otoe-Missouria Tribe of Indians. The Tribe
maintains an ownership stake in the defendants.1
Plaintiffs are two Illinois citizens who took out online
loans from WithU in 2022 and 2023. Joshua Harris borrowed
1 The parties dispute the precise nature of the defendants’ relationship
to the Tribe. Defendants, in an effort to claim tribal sovereign immunity,
assert that they are “economic arms of, and wholly owned, managed, and
controlled by, the Otoe-Missouria Tribe of Indians.” Plaintiffs, meanwhile,
have alleged that the Tribe is merely a “nominal” owner, and that all sub-
stantive aspects of defendants’ business are run by persons unaffiliated
with the Tribe. While this dispute might be relevant to whether defend-
ants can avail themselves of the Tribe’s sovereign immunity on the merits,
we need not resolve this dispute here.

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No. 24-2056 3
$600 with an annual interest rate of 498.63%. Donita Olds sim-
ilarly took out a $600 loan at an annual interest rate of
497.25%. Both of the loans violate Illinois’s statutory limits on
interest. See 815 ILCS 123/15-5-5.
The Loan Agreements for Harris’s and Olds’s loans con-
tain an Arbitration Agreement. According to the agreement,
an arbitrator will decide all “claims or disputes arising from
or relating in any way to: the interpretation, applicability, va-
lidity, arbitrability, enforceability, formation or scope of any
Loan Agreement or this Arbitration Agreement.” In plain
English, the agreement delegates to the arbitrator the “thresh-
old” questions of whether the parties agreed to arbitrate their
disputes and whether the claims at issue fall within the scope
of that agreement.
The Arbitration Agreement states that the arbitrator
should use “Applicable Law,” which is defined elsewhere in
the Loan Agreement as “Tribal Law and applicable federal
law,” to resolve these questions. “Tribal law” refers to law en-
acted by the Otoe-Missouria Tribe or the Otoe-Missouria Con-
sumer Finance Services Regulatory Commission. The Tribe
adopted a Tribal Contract Code on May 2, 2024, but this code
was not in place at the time Harris and Olds entered into the
Loan Agreements. See Otoe-Missouria Tribe of Indians, Reso-
lution OTMC #0502061 (May 2, 2024) (“Tribal Contract
Code”).2
The Tribal Contract Code defines a contract and sets out
the elements of contract formation, who can contract, de-
fenses, a statute of frauds, and modes of interpretation. The
2 The Tribal Contract Code appears on the district court docket at en-
try number 36-1.

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4 No. 24-2056
Code has several provisions that apply to loan contracts, alt-
hough none set a cap on the interest rate to be charged. The
Code also says that it applies retroactively to “all applicable
contracts that become effective on or after April 1, 2018.” Alt-
hough the Code describes some defenses to the formation or
enforcement of a contract, there are no provisions that ad-
dress unconscionability—we are aware of no state that takes
the same approach.
The Loan Agreement disclaims application of any other
law aside from the Tribe’s law and applicable federal law. It
states that “[t]he Loan and this Agreement are not governed
by the law of your state of residence or any other state.” Fi-
nally, the agreement reiterates that “[t]he arbitrator is bound
by the terms of this Arbitration Agreement,” and “must ap-
ply” tribal law or applicable federal law.
Harris and Olds filed a putative class action against W6LS
and Caliber for violations of Illinois’s rate-cap and other con-
sumer-protection statutes, as well as the federal Racketeer In-
fluenced and Corrupt Organizations Act and Electronic
Funds Transfer Act. Defendants filed a motion to compel in-
dividual arbitration, which the district court denied. The dis-
trict court’s denial turned on the “prospective waiver” doc-
trine: it found both the delegation provision and the Arbitra-
tion Agreement unenforceable because compelling arbitra-
tion under exclusively tribal or “applicable federal law”
forced the plaintiffs to prospectively waive their substantive
rights under Illinois law.
Defendants immediately appealed the denial as permitted
by the Federal Arbitration Act (“FAA”). See 9 U.S.C.
§ 16(a)(1)(C); United Natural Foods, Inc. v. Teamsters Local 414,
58 F.4th 927, 932–33 (7th Cir. 2023).

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No. 24-2056 5
II. Discussion
A court should compel arbitration when (1) there was a
valid agreement between the parties to arbitrate, (2) the claim
at issue falls within the scope of that agreement, and (3) a
party has nevertheless refused to arbitrate. Rock Hemp Corp. v.
Dunn, 51 F.4th 693, 702 (7th Cir. 2022). We review de novo the
denial of a motion to compel arbitration. United Natural Foods,
58 F.4th at 933.
“[A]rbitration is strictly a matter of consent.” Coinbase, Inc.
v. Suski, 602 U.S. 143, 148 (2024) (citation omitted). Thus, in
order to compel arbitration, a court must first determine that
the parties agreed to arbitrate their disputes. Granite Rock Co.
v. Int’l Bhd. of Teamsters, 561 U.S. 287, 296 (2010); K.F.C. v. Snap
Inc., 29 F.4th 835, 837 (7th Cir. 2022). Parties can go one step
further and agree to let the arbitrator decide “‘gateway’ ques-
tions of ‘arbitrability’” such as if that agreement is enforceable
or whether the disputes at issue are within the scope of the
agreement. Rent-A-Center, 561 U.S. at 68–69.
This additional step is often called a “delegation provi-
sion,” because it reflects the parties’ decision to delegate arbi-
trability to the arbitrator instead of having the courts decide.
Id. A delegation provision is “an additional, antecedent agree-
ment the party seeking arbitration asks the federal court to
enforce, and the FAA operates on this additional arbitration
agreement just as it does on any other.” Id. at 69–70. Delega-
tion is an exception to the general rule that arbitrability is a
question for the courts, so the party seeking delegation must
show the parties’ intent to delegate arbitrability by “clear and
unmistakable evidence.” Coinbase, 602 U.S. at 149 (internal al-
terations removed) (citing AT&T Techs., Inc. v. Commc’ns

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6 No. 24-2056
Workers, 475 U.S. 643, 649 (1986)); United Natural Foods, 58
F.4th at 933–34.
In applying this rule, we recognize as a background prin-
ciple that “Congress adopted the [FAA] in an effort to coun-
teract judicial hostility to arbitration and establish a liberal
federal policy favoring arbitration agreements.” New Prime
Inc. v. Oliveira, 586 U.S. 105, 120 (2019) (quotation omitted).
We thus “place arbitration agreements upon the same footing
as other contracts” when determining their validity. GE En-
ergy Power Conversion France SAS, Corp. v. Outokumpu Stainless
USA, LLC, 590 U.S. 432, 437 (2020) (cleaned up). This reflects
“the fundamental principle that arbitration is a matter of con-
tract.” Rent-A-Center, 561 U.S. at 67.
Accordingly, under § 2 of the FAA, all arbitration agree-
ments and delegation provisions “may be invalidated by gen-
erally applicable contract defenses.” Id. at 68 (cleaned up). The
Supreme Court has held, however, that “[a]s a matter of sub-
stantive federal arbitration law, an arbitration provision is
severable from the remainder of the contract.” Id. at 70–71 (cit-
ing Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445
(2006)). Thus, a court may still order arbitration if a party fails
to “challenge[] specifically” the arbitration (or delegation)
provision rather than “the contract as a whole.” Id. But
“where a challenge applies ‘equally’ to the whole contract and
to an arbitration or delegation provision, a court must address
that challenge.” Coinbase, 602 U.S. at 151 (citing Rent-A-Center,
561 U.S. at 71).
Here, both the delegation provision and the Arbitration
Agreement fail for the same reasons: both agreements, by se-
lecting then-nonexistent tribal law and inapplicable “federal
law” of contract to control their disputes, lacked mutual

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No. 24-2056 7
assent at the time of contracting. We proceed in three steps.
First, we determine which law of contract formation applies,
concluding that under either Illinois or tribal law, mutual as-
sent is required. Second, we conclude that the delegation and
arbitration provisions of the Loan Agreements lacked mutual
assent, as they selected non-existent law to govern future dis-
putes. Third, we consider an alternative basis for affirmance:
the prospective waiver doctrine.3
A. Choice of Law
Courts apply “ordinary state-law principles that govern
the formation of contracts” to determine “whether the parties
agreed to arbitrate a certain matter (including arbitrability).”
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995).
As to which state’s law would apply to questions of
3 In taking this approach, we affirm on a basis not relied on by the
district court but argued by the parties in supplemental briefing. The dis-
trict court based its decision solely on prospective waiver, and the parties
framed their initial arguments on appeal on that singular issue. As we dis-
cuss below, however, it remains an open question whether the prospective
waiver doctrine applies to state statutory rights. Infra pp. 15–16. For-
mation, on the other hand, is a clear prerequisite for delegation and arbi-
tration, and provides a narrower path to resolving this case on the facts
before us. See K.F.C., 29 F.4th at 837 (“Even the most sweeping delegation
cannot send the contract-formation issue to the arbitrator[.]”). And we
may generally affirm the district court’s judgment on any ground sup-
ported by the record. See, e.g., E.D. by Duell v. Noblesville Sch. Dist., 151
F.4th 907, 914 n.1 (7th Cir. 2025); see Kass v. PayPal Inc., 75 F.4th 693, 700
(7th Cir. 2023) (noting a motion to compel arbitration is procedurally akin
to a summary judgment motion). Cognizant that the parties had not
framed the issue as one of formation on appeal, we requested supple-
mental briefing on formation as to the arbitration and delegation provi-
sions of the Loan Agreements. Both parties have now had the opportunity
to fully brief and be heard on this issue.

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8 No. 24-2056
formation, “we would normally respect the law chosen in the
[parties’] agreement.” Faulkenberg v. CB Tax Franchise Sys., LP,
637 F.3d 801, 809 (7th Cir. 2011).
That approach presents a challenge here. The Loan Agree-
ment specifies “Tribal law and applicable federal law”—not
state law—as the applicable law, further defining “Tribal
law” as “any law, ordinance or regulation duly enacted by the
Tribe or the Otoe-Missouria Consumer Finance Services Reg-
ulatory Commission.” But the “applicable law” is the FAA,
which does not “provide a substantive law governing the for-
mation or general interpretation of contracts.” Rodgers-Rouzier
v. Am. Queen Steamboat Operating Co., LLC, 104 F.4th 978, 991
(7th Cir. 2024); see also Druco Rests., Inc. v. Steak N Shake Enters.,
765 F.3d 776, 781–82 (7th Cir. 2014). And the Otoe-Missouria
Tribe adopted its Contract Code in May 2024, after Harris
took out his loan in 2023 and Olds took out hers in 2022. Thus,
the Tribal Contract Code submitted to the district court did
not exist at the time the parties purportedly designated it as
the law governing the arbitration and delegation provisions.
At the time of the contract, the bodies of law mentioned in the
governing law provision—federal and tribal—provided no
rule of contract formation and defense.
Defendants urge, nonetheless, that because the Tribal
Contract Code now exists and expressly states that its terms
apply retroactively, it governs questions of formation. This as-
sumes, of course, that parties may substitute tribal law for “or-
dinary state-law principles,” First Options, 514 U.S. at 944—
which we have yet to resolve. Plaintiffs counter that Illinois
law—the law of the forum state—should govern questions of
formation.

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No. 24-2056 9
Ultimately, we need not decide between tribal law and Il-
linois law in this case because they share the same basic for-
mation requirements, including mutual assent (or “consent”
as phrased in the Tribal Contract Code) to the essential terms
of the agreement. Compare Kass v. PayPal Inc., 75 F.4th 693, 701
(7th Cir. 2023) (citing Arbogast v. Chicago Cubs Baseball Club,
LLC, 2021 IL App (1st) 210526, ¶ 20), with Tribal Contract
Code § 10 (requiring mutual consent), and id. § 24 (“Consent
is not mutual unless the parties all agree upon the same terms
and conditions setting forth the parties’ respective obligations
and rights under the contract[.]”). Though we lack judicial
opinions applying the Tribal Contract Code’s mutual-consent
requirement, neither party argues there is any daylight be-
tween “mutual consent” under the Code and “mutual assent”
under Illinois law. We thus cite Illinois caselaw with the as-
sumption, given the parties’ briefs, that the same rules apply
under tribal law. See Sosa v. Onfido, Inc., 8 F.4th 631, 637 (7th
Cir. 2021) (“A choice-of-law determination is required only
when a difference in law will make a difference in the out-
come.” (quotation omitted)).
B. Mutual Assent
A valid contract requires “offer, acceptance, and consider-
ation,” and “there must also be mutual assent as to the con-
tract’s terms.” Kass, 75 F.4th at 701 (quotation omitted). Those
terms must be so definite that “the promises and perfor-
mances to be rendered by each party are reasonably certain.”
Bus. Sys. Eng’g, Inc. v. Int’l Bus. Machs. Corp., 547 F.3d 882, 888
(7th Cir. 2008) (quoting Acad. Chicago Publishers v. Cheever, 144
Ill. 2d 24, 29 (1991)). Even though “some contract terms may
be missing or left to be agreed upon, … essential terms” must
be certain. Acad. Chicago Publishers, 144 Ill. 2d at 30. And

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10 No. 24-2056
without “mutual assent as to the terms of the contract,” there
is no enforceable contract. Id. “[W]e look at the parties’ intent
to be bound and the agreement on the material terms at the
time of contracting, not in its aftermath.” In re Broiler Chicken
Antitrust Litig., 167 F.4th 430, 439 (7th Cir. 2026) (citing Abbott
Laboratories v. Alpha Therapeutic Corp., 164 F.3d 385, 387–89
(7th Cir. 1999)).
Here, the lack of definiteness in the contract’s Governing
Law provision contradicts any mutual assent to the delega-
tion or arbitration provisions. The contract purports to have
the arbitrator use “applicable federal law” or Otoe-Missouria
tribal law to determine the “interpretation, applicability, va-
lidity, arbitrability, enforceability, formation or scope of …
this Arbitration Agreement.” But as discussed above, federal
law does not provide underlying principles of contract for-
mation and there was no tribal law for an arbitrator to apply
when plaintiffs signed their contracts. We cannot, then, “as-
certain what the parties have agreed to do” in committing
their future disputes to arbitration. Bus. Sys. Eng’g, Inc., 547
F.3d at 888 (quoting Acad. Chicago Publishers, 144 Ill. 2d at 29).
Since it was not “reasonably certain” what law Harris and
Olds, or for that matter WithU Loans, Inc., agreed would be
used in arbitration, they cannot have mutually assented to the
delegation or arbitration terms. Id.4
4 Defendants suggest that applicable tribal law did exist prior to the
signing of the Loan Agreements, citing a Consumer Financial Services Or-
dinance that the Tribe adopted in 2018. But that ordinance, beyond requir-
ing that loan agreements include certain notices, simply restates that
“[t]he Loan is made within the Tribe’s jurisdiction and governed by Tribal
law and applicable federal law”; it does not provide substantive rules of

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No. 24-2056 11
Jackson v. Payday Financial, LLC provides a useful analogy.
In that case, the plaintiffs entered agreements for high-interest
loans with a provision assigning future disputes to arbitration
“which shall be conducted by the Cheyenne River Sioux
Tribal Nation.” 764 F.3d 765, 769 (7th Cir. 2014). As it turned
out, the Cheyenne River Sioux Tribal Nation had no arbitra-
tion procedures, process for hiring arbitrators, or rules to gov-
ern consumer disputes—it was a purely “illusory forum.” Id.
at 776. Though we ultimately found the arbitration clause un-
enforceable based on (among other things) unconscionability
under Illinois law, we noted that “mutuality of intent … [was]
not at all apparent” because “[t]he loan consumers did not
agree to arbitration under any and all circumstances, but only
to arbitration under carefully controlled circumstances—cir-
cumstances that never existed.” Id. at 781. That same logic ap-
plies here: plaintiffs agreed to arbitrate and delegate gateway
questions of arbitrability on the understanding that some law
would govern in that alternative forum. But that law did not
exist at the time of contracting. Indeed, it did not exist until
after plaintiffs filed their action in federal court. We cannot
say, therefore, that there was a “meeting of the minds” as to
an essential element of the parties’ bargain to arbitrate: the
substantive law that would bind the arbitrator.
We pause to distinguish the language at issue here from
the run-of-the mill choice-of-law provision. A chosen jurisdic-
tion’s law will change over time and parties may validly ac-
cept the risk posed by this change as part of their contract. The
difference here is that the Otoe-Missouria Tribal Contract
Code was completely nonexistent at the time the parties
contract. Otoe-Missouria Tribe of Indians, Resolution OTMC #050341 § 6.2
(May 3, 2018), https://perma.cc/2X58-7UNN.

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12 No. 24-2056
entered into the delegation and arbitration agreements. It is
one thing for parties to agree to be bound by a settled body of
law that is subject to later change; it is quite another to select a
non-existent body of law, which is subject to later invention.
The latter provides no basis for us to conclude that the parties
shared a mutual understanding as to what law would govern
their future disputes.
That absence of mutual understanding is particularly evi-
dent here where the Otoe-Missouria Tribe of Indians—with
the unilateral ability to create applicable tribal law—has a
proprietary and financial interest in the defendant corpora-
tions. Nothing in the record suggests that defendants dis-
closed—or that plaintiffs knew—that the Tribe both owned
the defendants and retained the ability to draft its law to ma-
terially disadvantage plaintiffs in a future dispute, such as by
omitting unconscionability as a defense to enforcement.
Defendants cite cases where we have enforced arbitration
agreements despite holding that a choice-of-law provision is
unenforceable or inapplicable. See Faulkenberg, 637 F.3d at 809
(applying Illinois law as argued by parties rather than Texas
law contained in choice-of-law provision); Stawski Distrib. Co.
v. Browary Zywiec S.A., 349 F.3d 1023, 1026 (7th Cir. 2003) (en-
forcing arbitration agreement despite finding choice-of-law
provision unenforceable). But this misunderstands the argu-
ment here: it is not that the Governing Law provision is unen-
forceable—we make no ruling on that question—but that the
Governing Law provision, in this case, reflects the parties’ lack
of mutual assent as to delegation and arbitration at the time
of contracting.5 The provision simultaneously reflects the
5 Without making any holding as to unconscionability in this case, we
recognize that under Illinois law the mutual assent inquiry may turn on

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No. 24-2056 13
parties’ desire to choose governing law as an integral part of
the dispute resolution process and frustrates that very end by
specifying law that does not exist.
Defendants assert that plaintiffs cannot contest formation
as to the delegation or arbitration provisions because their
statutory claims presume the existence of an agreement: the
agreement to issue loans at allegedly unlawful rates. But de-
fendants confuse the broader Loan Agreement—or “con-
tainer contract”—with the nested agreements to arbitrate fu-
ture disputes and delegate questions of arbitrability. See MZM
Constr. Co., Inc. v. N.J. Bldg. Laborers Statewide Benefit Funds,
974 F.3d 386, 397 (3d Cir. 2020). There is no doubt that plain-
tiffs agreed to take out loans at the rates they now claim were
unlawful. But the Supreme Court has made clear that agree-
ments to arbitrate or delegate questions of arbitrability are
“severable” from the container contract and, indeed, from
each other. Buckeye, 546 U.S. at 445; Rent-A-Center, 561 U.S. at
72; see also Sauer-Getriebe KG v. White Hydraulics, Inc., 715 F.2d
348, 350 (7th Cir. 1983) (“The agreement to arbitrate and the
agreement to buy and sell … are separate.”). Thus, we view
the delegation and arbitration provisions as separate agree-
ments—and a formation challenge to either does not presume
the invalidity of the container contract. Cf. MZM, 974 F.3d at
397–98 (noting that in the other direction, a formation chal-
lenge to the container contract may apply to a nested arbitra-
tion agreement).
facts that go to both the intent of the parties and unconscionability. See
Greenfield v. Ervin Cable Constr., LLC, 2025 IL App (5th) 240210-U, ¶ 45, as
modified on denial of reh'g (Mar. 25, 2025) (“[M]any of the trial court's find-
ings on the issue of mutual assent would also apply to the issue of proce-
dural unconscionability.”).

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14 No. 24-2056
Plaintiffs challenge the formation of the delegation and
Arbitration Agreements specifically, not the Loan Agreement
as a whole. They do not contend that the Governing Law pro-
vision was an “essential” term to the container contract. Set-
ting up a dispute-resolution procedure under non-existent
law is no doubt material to that separate and severable Arbi-
tration Agreement, but that is not necessarily so for a broader
agreement to borrow money. Rent-A-Center, 561 U.S. at 71; cf.
Jackson, 764 F.3d at 778 (finding choice-of-forum provision un-
enforceable where “it was not possible for the Plaintiffs to as-
certain the dispute resolution processes and rules to which
they were agreeing”); Broiler Chicken, 167 F.4th at 439 (materi-
ality must be evaluated “in the context of the particular con-
tract” based in part on “the purpose that [the parties] sought
to accomplish” (quotations omitted)).
In contrast, the same mutual-assent argument that invali-
dates the delegation provision “applies equally” to the Arbi-
tration Agreement itself, which is controlled by the same
choice-of-law provision. Coinbase, 602 U.S. at 151. As with del-
egation, the parties intended to arbitrate their disputes ac-
cording to a predetermined body of governing law but chose
sources of law (federal and tribal) that would provide an ar-
bitrator with no substantive rules of contract with which to
resolve those future disputes. Indeed, given the Tribe’s ability
to unilaterally draft rules of contract formation and defense
directly for defendants’ benefit, it is unclear that what the par-
ties “agreed” to could even be termed “arbitration” under the
FAA at all. See Flores v. New York Football Giants, Inc., 150 F.4th
172, 184–85 (2d Cir. 2025) (affirming denial of motion to com-
pel arbitration where “the late unilateral designation of an ad-
viser to the [defendant] as arbitrator neither provides for an
even facially independent arbitral forum, nor remedies the

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No. 24-2056 15
[defendant’s] unilateral contractual authority over both the
substance of [plaintiff]’s statutory claims and the procedures
governing their alleged ‘arbitration’”). There was, therefore,
no meeting of the minds as to this essential element of their
agreement to arbitrate.
In holding that the parties did not mutually assent to the
specific delegation provision and Arbitration Agreements in
this case, we do not mean to cast doubt on other contracts en-
tered under the auspices of Otoe-Missouria tribal law prior to
the enactment of the Tribal Contract Code. Depending on the
language of other agreements, the absence of governing law
chosen by the parties may not relate to an essential term, or
there may be alternative law that does provide substantive
rules of decision. But on the record before us, we cannot con-
clude that the parties mutually assented to arbitrate (includ-
ing on issues of arbitrability) where their specific agreement
directed the arbitrator to apply a body of governing law that
did not exist at the time of contracting.
C. Prospective Waiver
Defendants face another hurdle to enforcing the arbitra-
tion provision: the “effective vindication” or “prospective
waiver” doctrine. The doctrine reflects the broad principle
that arbitration provides only an alternative forum for resolv-
ing disputes and should not change the nature of the under-
lying rights at issue. It stems from language in Mitsubishi Mo-
tors Corp. v. Soler Chrysler-Plymouth, Inc., where the Supreme
Court held that a corporation could be compelled to arbitrate
its Sherman Act claim against another corporation: “By agree-
ing to arbitrate a statutory claim, a party does not forgo the sub-
stantive rights afforded by the statute; it only submits to their
resolution in an arbitral, rather than a judicial, forum.” 473

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16 No. 24-2056
U.S. 614, 628 (1985) (emphasis added). This passage has been
read to stand for the notion that a party cannot “prospectively
waive” their substantive rights just by agreeing to arbitrate
their claims. Applying this principle, the district court found
the Arbitration Agreement unenforceable because it required
plaintiffs to prospectively waive their Illinois state-law rights
in arbitration.
The Supreme Court’s prospective-waiver cases have gen-
erally involved federal statutory rights. See, e.g., id. at 626–28
(Sherman Act); Vimar Seguros y Reaseguros, S.A. v. M/V Sky
Reefer, 515 U.S. 528, 539 (1995) (Carriage of Goods by Sea Act);
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991)
(Age Discrimination in Employment Act). But see Preston v.
Ferrer, 552 U.S. 346, 360 (2008) (holding that prospective
waiver did not invalidate arbitration agreement where plain-
tiff “relinquishe[d] no substantive rights … California law
may accord him”). Defendants thus argue that the prospec-
tive-waiver doctrine only applies to rights created by federal
law, not those created by state law. They cite Justice Kagan’s
2013 dissent in American Express Co. v. Italian Colors Restaurant,
which other courts have read to imply that the prospective-
waiver doctrine does not apply to state-law substantive
rights. See 570 U.S. 228, 252 (2013) (Kagan, J., dissenting)
(“Our effective-vindication rule comes into play only when
the FAA is alleged to conflict with another federal law[.]”);
Dr.’s Assocs., LLC v. Tripathi, 794 F. App’x 91, 94 (2d Cir. 2019)
(nonprecedential order); Ferguson v. Corinthian Colls., Inc., 733
F.3d 928, 935–36 (9th Cir. 2013).
In 2022, however, the Supreme Court again mentioned the
prospective-waiver doctrine and, in a footnote, suggested that
it was “not … unique [to] federal statutes.” Viking River

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No. 24-2056 17
Cruises, Inc. v. Moriana, 596 U.S. 639, 653 n.5 (2022). Viking
River Cruises, therefore, at the very least strongly suggests that
an arbitration agreement like defendants’ impermissibly
forces borrowers to prospectively waive their state-law rights.
We take no issue with the district court’s decision to rely
on prospective waiver, but we do not find it necessary to do
the same. Because we find that defendants’ motion to compel
arbitration fails on ordinary formation principles, we need
not reach the untrodden ground of prospective waiver of
state-law rights post-Viking River Cruises and leave that ques-
tion for another day.
III. Conclusion
The judgment of the district court is AFFIRMED.

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