On July 20, 2022, an Illinois federal court held that clauses permitting parties to go to court to seek injunctive relief do not limit an arbitrator’s authority to decide questions of arbitrability when the parties have clearly and unmistakably agreed to delegate such questions to the arbitrator. Telephone Investments USA, Inc. v. Lumen Technologies, Inc., No. 22-cv-2260 (N.D. Ill. 2022).
In 1999, Telephone Investments USA (Investments), partnered with Lumen Technologies (Lumen), and two individual investors to form Telephone USA of Wisconsin, LLC (Telephone USA). The ownership group formed a holding company, TelUSA Holdings, LLC, to be the owner of Telephone USA. This newly formed holding company subjected both parties to a new operating agreement that included an arbitration provision stating that:
Subject to paragraph (b), any and all controversies or claims arising out of or relating to this Agreement, or the interpretation or enforcement thereof, shall be settled by arbitration . . . in accordance with the Commercial Arbitration Rules of the American Arbitration Association.
Paragraph (b) stated:
Notwithstanding the terms of the foregoing paragraph, any party facing irreparable harm shall be entitled to seek injunctive and other forms of equitable relief from any court of competent jurisdiction (whether during the pendency of any arbitration proceedings or otherwise) to prevent nonperformance or breach of one or more agreements or covenants set forth herein, and to enforce specifically the terms and provisions hereof . . .