Rattunde v. Scores Chi. Gentleman's Club

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ANGELICA RATTUNDE, individually and on behalf of all others similarly situated, Plaintiff, v. SCORES CHICAGO GENTLEMAN'S CLUB, Defendant.

No. 23 C 14706

United States District Court, N.D. Illinois, Eastern Division

October 23, 2024

MEMORANDUM OPINION AND ORDER

SUNIL R. HARJANI, UNITED STATES DISTRICT JUDGE

Plaintiff Angelica Rattunde brings this class action lawsuit asserting four counts against her employer Scores Chicago Gentleman's Club for: (1) failure to pay minimum wages in violation of the Fair Labor Standards Act; (2) failure to pay minimum wages under 820 Ill. Comp. Stat. 105/1, et seq.; (3) failure to pay wages and illegal deductions under 820 Ill. Comp. Stat. 115/1, et seq.; and (4) violation of the Illinois Gender Violence Act, 740 Ill. Comp Stat. 82/1, et seq. After the Complaint was filed three additional individuals filed opt-in consent forms pursuant to 29 U.S.C. § 216. Defendant now brings three separate motions to compel Plaintiff and the three opt-ins^[1] to arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-4, and dismiss the complaint pursuant to Federal Rule Civil Procedure 12(b)(3) or, alternatively, stay the proceeding pending arbitration pursuant to 9 U.S.C. § 3. Docs. [8][24][41]. Since the Illinois Gender Violence Act claim cannot be asserted against a corporation, Count IV is dismissed by the Court. Defendant's motion to compel Plaintiff to arbitration is granted as to Counts I through III.^[2] Doc.

[8]. Plaintiff's motion for conditional class certification and issuance of notice pursuant to 29 U.S.C § 216(b) (Doc. [20]) is denied as moot and the proceeding is stayed pending arbitration for the reasons outlined below.

A. Plaintiff Rattunde's Illinois Gender Violence Act Claim (Count IV)

In Count IV, Plaintiff asserts a claim under the Illinois Gender Violence Act, and according to Plaintiff, this count prevents compelling the case to arbitration under the Ending Forced Arbitration Act. Before proceeding to that issue, the Court had some concern as to whether the Illinois Gender Violence Act count asserted a plausible claim as to which relief could be granted because the Act has generally been inapplicable to claims against a corporate entity. Accordingly, the Court requested supplemental briefing, which provided the parties an opportunity to address the issue. Plaintiff Rattunde argues that the Illinois Gender Violence Act applies to this case because: (1) as initially drafted, the Illinois Gender Violence Act applied to corporations; (2) alternatively, the employer amendment, effective January 1, 2024, saves this action; or (3) the employer amendment should apply retroactively. All of these arguments are unavailing.

The Illinois Gender Violence Act initially created a cause of action against “a person or persons perpetrating [] gender-related violence.” 740 Ill. Comp. Stat. 82/10. It was only later amended, effective January 1, 2024, to add employer liability for “gender-related violence committed in the workplace by an employee or agent of the employer.” 740 Ill. Comp. Stat. 82/11. The controlling legal principle for statutory interpretation is that courts must follow and apply the plain meaning of the text. See Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 476 (1992); Lamie v. U.S. Tr., 540 U.S. 526, 536 (2004). Here, the pre-amendment text notes that an action may be brought against “a person or persons” who perpetuated gender-related violence.

740 Ill. Comp. Stat. 82/10. The Act notes that the person(s) “either personally commit[ed] the gender-related violence or personally encourage[ed] or assist[ed] the act or acts of gender-related violence.” Id. The plain language of the pre-amendment text does not give any indication that the term “person” includes a corporate employer, and numerous courts in this district have interpreted the use of the terms “personally committed” or “personally encouraged” to only mean natural persons. See Fuesting v. Uline, Inc., 30 F.Supp.3d 739, 742-43 (N.D. Ill. Mar. 21, 2014); Doe v. Lee, 943 F.Supp.2d 870, 879 (N.D. Ill. May 6, 2013); Lewis-Bledsoe v. Ford Motor Co., 2022 WL 2316320, at **2-3 (N.D. Ill. June 28, 2022); Mundo v. City of Chicago, 2021 WL 3367160, at **4-5 (N.D. Ill. Aug. 3, 2021); Flood v. Washington Square Rest., Inc., 2012 WL 6680345, at **2-3 (N.D. Ill.Dec. 21, 2012); Fleming v. Fireside West, LLC, 2012 WL 6604642, at **2-4 (N.D. Ill.Dec. 18, 2012).

In cases sitting in diversity, such as this case, district courts are directed to apply the law as it believes the highest court of the state, here Illinois, would. State Farm Mut. Auto. Ins. Co. v. Pate, 275 F.3d 666, 669 (7th Cir. 2001). When not addressed by the high court, decisions from appellate courts become authoritative, unless there are compelling reasons to doubt that the Illinois Appellate Court stated the law correctly. AAR Aircraft & Engine Grp., Inc. v. Edwards, 272 F.3d 468, 470 (7th Cir. 2001). The Illinois Supreme Court has not decided whether a corporation was a person under the Illinois Gender Violence Act, prior to the Illinois legislature's employer amendment. Plaintiff therefore argues that this Court should follow the Illinois Appellate Court's holding in Gasic v. Marquette Management, which held that “under some circumstances, a legal entity, such as a corporation, can act personally” within the meaning of the Illinois Gender Violence Act. 2019 IL App (3d) 170756, ¶ 16 (cleaned up). In coming to that conclusion, an Illinois Appellate Court found that the context, language, and legislative history of the statute indicated that the idea corporate personhood has been rapidly expanding. Id. at ¶¶ 14-17. Thus, the Illinois Appellate Court found that, at times, a corporation could act personally for purposes of civil liability. Id. Without any additional analysis, certain district courts have followed Gasic and refused to dismiss Illinois Gender Violence Act claims simply because an Illinois Appellate Court concluded that a corporation can be liable under certain circumstances. See Nor v. Alrashid, 2022 WL 815542, at *5 (N.D. Ill. Mar. 17, 2022); Solinski v. Higher Learning Comm'n, 2021 WL 1293841, at *4 (N.D. Ill. Apr. 7, 2021); Doe v. City of Chicago, 2020 WL 1675639, at *4 (N.D. Ill. Apr. 6, 2020).

However, as outlined by courts in this district in Mundo v. City of Chicago and Lewis-Bledsoe v. Ford, there are compelling reasons to doubt that the Illinois Appellate Court's holding in Gasic stated the law correctly and to instead find that the statute applies only to natural persons. Mundo, 2021 WL 3367160, at *5 (citing 2019 IL App (3d) 170756); Lewis-Bledsoe, 2022 WL 2316320, at **2-3. The district court in Mundo analyzed whether the Illinois Gender Violence Act applied against a municipality. First, the district court in Mundo noted that the Illinois Supreme Court previously held that the “plain and ordinary meaning of the term person is an individual human being.” Id. at *5 (citing People v. Christopherson, 899 N.E.2d 257, 260 (Ill. 2008) (cleaned up)). Further, the district court observed that “in Illinois, the general rule is that absent a statutory definition that expands the meaning of person, that term refers to an individual, not a legal entity.” Id. at *5 (cleaned up). As explained by the district court, the text of the Illinois Gender Violence Act does not suggest that the statute's drafters wanted to expand the definition of “person” to legal entities. Id. at *5. The district court also noted the reference to “persons who personally commit or personally encourage gender-related violence” is evidence of the legislature's intent for this to apply only to natural persons, as corporations do not act personally but instead through agents. Id. (cleaned up); see also Flood, 2012 WL 6680345, at *2.

The district court in Lewis-Bledsoe concurred with the reasoning in Mundo. The district court began by analyzing Illinois' Statute on Statutes which stated that “persons may extend and be applied to bodies politic and corporate as well as individuals.” 2022 WL 2316320, at *2 (cleaned up). The district court noted that the Illinois Appellate Court in Gasic had also found that a legal entity could be a person and act “personally” in the context of the Illinois Gender Violence Act. Id. at *3. However, the district court, agreeing with the reasoning in Mundo, found that the Illinois Supreme Court had held that: (1) the plain and ordinary meaning of “person” is an individual human being; (2) absent a statutory definition expanding the term “person,” the term referred to an individual not a legal entity; and (3) nothing in the Illinois Gender Violence Act suggested that drafters intended to deviate from this rule and expand the term “person” to legal entities. Id. at *3.

Other courts in this district have also noted that there was no discussion in the initial legislative sessions about whether the term “person” applied to natural persons or extended to corporations. See Flood, 2012 WL 6680345, at *2. In analyzing the term “person” in the context of other Illinois statutes, the district court in Flood found that, while other Illinois statutes such as the Illinois Hate Crimes Act and Open Meetings Act provided for corporate liability, the presence of the term “personally” in the Illinois Gender Violence Act was dispositive. Id. at *3. The district court recognized that the Illinois legislature's inclusion of the word “personally” showed that this act was meant to only apply to natural persons, as it was inconceivable how a corporation could act personally to perpetrate acts of gender-related violence. Id. at *3; see also Fuesting, 30 F.Supp.3d at 743 (finding that a corporation cannot personally perpetrate gender violence as they act through...