Joshua Harris v. W6LS, Inc.

── Joshua Harris v. W6LS, Inc. ── Court: Court of Appeals for the Seventh Circuit Date: June 05, 2026 Category: General In the United States Court of Appeals For the Seventh Circuit ____________________ No. 24-2056 JOSHUA HARRIS and DONITA OLDS, on behalf of plaintiffs and the class members described herein, Plaintiffs-Appellees, v. W6LS, INC., doing business as WITHU and WITHU LOANS, and CALIBER FINANCIAL SERVICES, INC., 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. ____________________ ARGUED FEBRUARY 12, 2025 — DECIDED MARCH 31, 2026 AMENDED JUNE 5, 2026 ____________________ Before PRYOR, KOLAR, and MALDONADO, Circuit Judges. KOLAR, 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 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. 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 an