/ Articles / Defense opposes motion to dismiss LdF alleged federal racketeering

Defense opposes motion to dismiss LdF alleged federal racketeering

December 20, 2019 by Abigail Bostwick

The attorneys defending a Pennsylvania man who brought a federal lawsuit against Lac du Flambeau Tribal lenders has filed an opposition to the Tribe’s attempt to have the alleged interest rate scam case dismissed.

 

The federal lawsuit

Based on to the complaint in the United States District Court for the Eastern District of Pennsylvania, Lac du Flambeau (LdF) Business Development Corporation (BDC) owns LdF Holdings, which creates and services high interest payday or installment loans nationwide — including Radiant Cash — issued a loan to the plaintiff, Isiah Jones of Pennsylvania in 2017.

Jones filed suit on his own behalf and that of “other citizens of Pennsylvania,” indicating the loan — such as the $600 Jones borrowed — violated the Pennsylvania Loan Interest and Protection Law (LIPL) as well as federal racketeering laws. The lawsuit names Joseph Wildcat Sr., president of the Lac du Flambeau Tribe of Lake Superior Chippewa Indians, the Lac du Flambeau Tribe of Lake Superior Chippewa Indians, as well as 11 BDC board members and LdF Holdings employees. 

The lawsuit alleges those who took out such LdF loans have so at an interest rate at or more than 12% per annum, which is not licensed in Pennsylvania.

Jones is seeking an award of several thousand in damages. There are four attorneys defending the case. He took out the loan for personal, household and family related expenses and was approved for the loan with a 690% annual percentage rate, based on federal court records.



Motion to dismiss 

In fall, Attorney Shannon Miller of Maurice Wutscher, LLP in Pennsylvania, who is representing the 11 LdF defendants, argued the complaint does not hold merit and filed a motion to have the case dismissed, citing “… the defendants are liable, that Indian tribes and their tribally-created entities are entitled to immunity from suit and adding the court lacks personal jurisdiction over the eleven defendants because Jones has not stated they are from Radiant Cash. 

“The plaintiff’s claims in this case are in essence against the Tribe .… Because the remedy sought is truly against the Tribe, this case should be dismissed with prejudice based on tribal sovereign immunity from suit … (and for) failure to state a claim against defendants and for lack of personal jurisdiction because Defendants do not have sufficient minimum contacts with Pennsylvania; they personally did not enter into the loan agreement with plaintiff; and, they personally did not collect any payments from plaintiff.”



Opposing dismissal

The four attorneys argue the case should not be dismissed as the fiduciary shield doctrine does not apply to RICO, and the small town of LdF would be aware they are doing business in other states, including Pennsylvania. 

“Minimum contacts exist in this case,” the opposition relays. “The individual defendants purposely directed LdF Holdings to enter into al can with Mr. Jones in Pennsylvania … the individual defendants know that LdF Holdings has to lend over vast distances to be successful, and they purposefully put in place the electronic infrastructure and procedures necessary for that purpose.”

Jones is not asserting fraud — rather, making it plausible that LdF Holdings has a sole purpose to “… make high interest loans across state lines … operating the enterprise through the collection of unlawful debt, are in a conspiracy to do so, and intended to avail themselves of the privilege of lending in Pennsylvania,” the opposition goes on. 

Individual defendants are not immune and should be held liable, the attorneys add, in a company “… engaging in a fraudulent scheme to sell a greater quality of a product than it had available.” This is a violation of the Unfair Trade Practices and Consumer Protection Law, the opposition indicates. 

“Directing LdF Holdings to charge Mr. Jones interest at the rate of 690% APR is clearly misfeasance,” the opposition reads. 

Further, the defense states, tribal courts have jurisdiction over tribal law, but not the law of Pennsylvania or federal law. That would be different should Jones have taken out the loan in tribal court, the attorneys argue further. 

“Defendants’ motions to dismiss should be denied together with any other relief that is just and appropriate,” Robert Salvin, Pennsylvania attorney concludes. 

An oral argument on the matter has been rescheduled several times in the last few weeks. It is now slated for Jan. 7. 

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