United States Court of Appeals For the Seventh Circuit ____________________ No. 23-2723 EIDO HUSSAM AL-NAHHAS, Plaintiff-Appellee, v. 777 PARTNERS LLC, et al., Defendants-Appellants. ____________________

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:22-cv-00750 — John J. Tharp, Jr., Judge. ____________________

ARGUED APRIL 9, 2024 — DECIDED FEBRUARY 19, 2025 ____________________

Before EASTERBROOK, ROVNER, and JACKSON-AKIWUMI, Circuit Judges. JACKSON-AKIWUMI, Circuit Judge. Illinois resident Eido Hussam Al-Nahhas took out four loans from an online lend- ing company called Rosebud Lending LZO, doing business as ZocaLoans. Those loans charged exorbitant interest rates of up to nearly 700%—far beyond the rates allowed under Illi- nois law. Al-Nahhas contends that ZocaLoans is, in fact, a fraud orchestrated by two private equity firms, 777 Partners, 2 No. 23-2723 LLC, and Tactical Marketing Partners, LLC, to skirt state usury laws. According to Al-Nahhas, those firms pay the Rosebud Sioux Tribe a pittance to put its name on predatory payday loan websites that gouge low-income individuals. And if anyone sues the websites for violating state law, the firms conveniently claim tribal sovereign immunity. Al- Nahhas sued ZocaLoans and the firms anyway, for violating Illinois usury statutes and the federal Racketeer Influence and Corrupt Organizations Act. For fourteen months, the defendants participated in litiga- tion, including by filing their answer, fielding discovery re- quests, and participating in status conferences. But then they decided that they wanted to arbitrate. Citing an arbitration provision in the four lending agreements that Al-Nahhas had signed, they asked the district court to refer the case to an ar- bitrator. The district court refused, finding that the defend- ants had waived their right to compel arbitration by partici- pating in litigation. 777 Partners, LLC, and Tactical Marketing Partners, LLC now appeal. Before oral argument, the appellants also asked us to rule the litigation moot based on the terms of Al- Nahhas’s settlement agreement with ZocaLoans. We con- clude that the appellants indeed waived their right to arbi- trate through their litigation conduct and that this case is not moot. We therefore affirm the district court’s judgment and deny the appellants’ motion. I

This litigation concerns the legality of private equity firms using a Native American tribe to evade Illinois law. At the heart of this case are four loans that Eido Hussam Al-Nahhas, No. 23-2723 3 an Illinois resident, took out from an online lending company called Rosebud Lending LZO, doing business as ZocaLoans. In January, March, May, and September of 2021, Al-Nahhas took out four loans from ZocaLoans’ website of $350, $550, $750, and $900. The annual interest rates on those loans ranged from 534.75% to 693.10%—exponentially higher than allowed under Illinois law. Al-Nahhas repaid the first three of those loans, but the fourth—a $900 loan with a 585.21% inter- est rate—remains outstanding. ZocaLoans holds itself out as a “sovereign enterprise” that is “wholly owned and controlled by” the federally recognized Rosebud Sioux Tribe. But Al-Nahhas alleges that this Native American ownership is just a front. In reality, he contends, ZocaLoans is operated by 777 Partners, LLC, and its subsidi- ary, Tactical Marketing Partners, LLC, both of which are non- tribal entities based in Miami and organized under Delaware law. Al-Nahhas alleges that Tactical Marketing Partners un