IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ROME DIVISION

Transcription

1 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 1 of 26 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ROME DIVISION JOSHUA PARNELL, ) ) Plaintiff, ) ) ) Civil Action Number: v. ) ) 4:14-CV HLM WESTERN SKY FINANCIAL, ) LLC, et al., ) ) Defendants. ) ) PLAINTIFF S RESPONSE IN OPPOSITION TO CASHCALL S RENEWED MOTION TO DISMISS BASED ON FORUM NON CONVENIENS COMES NOW the Plaintiff, by and through his undersigned counsel, and does hereby file this Response in Opposition to CashCall Inc. s Renewed Motion to Dismiss Based on Forum Non Conveniens. Plaintiff asks the Court to deny Defendant CashCall, Inc. s ( CashCall ) motion for the following reasons: 1) the forum selection clause in invalid because it is the product of fraud and overreaching; 2) the forum selection clause is not enforceable under federal law; 3) enforcing the forum selection clause would result in manifest injustice. Page 1 of 26

2 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 2 of 26 FACTS When discussing this case, the most vital element to consider is that there are two sets of facts in this case. There is the set of facts written into the Western Sky Consumer Loan Agreement ( Loan Agreement ) which describe events and transactions that bear no factual basis in reality or in the actual actions of Plaintiff or Defendants. These facts, which are based solely upon the recitations in the Loan Agreement, are the basis for all of CashCall s arguments. CashCall s arguments rely on acceptance of the false notion that Plaintiff executed the Loan Agreement while physically present within the exterior boundaries of the Cheyenne River Indian Reservation. Doc at 3, 14, 17, 18, 22, and 23. This fact is based solely upon the written statement in the Loan Agreement, even though all parties agree that Plaintiff never physically left the state of Georgia. Doc at 17. CashCall believes the factual occurrences which were actually performed in reality by the parties are irrelevant as long as the Loan Agreement states that Plaintiff entered the boundaries of the tribal lands. Id. CashCall asks this court to rely upon the fact that the money transfers between Plaintiff and Defendants were performed solely within the Cheyenne River Indian Reservation as well. Id. The notion that the banking transfers were performed on Page 2 of 26

3 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 3 of 26 the tribal lands has been thoroughly disproven, as discussed infra. 1 These facts allege that the parties and transactions are subject to the sole subject matter and personal jurisdiction of the Cheyenne River Sioux Tribal Court, and that no other state or federal law or regulation shall apply to the Loan Agreement or its enforcement or interpretation. Id. Also discussed infra, the Cheyenne River Sioux Tribal Court has no basis for personal or subject matter jurisdiction. This aforementioned set of facts is collectively referred to herein as the Loan Agreement Facts. The second set of facts is based upon the actual events which transpired on planet Earth. This second set of facts is not based in fictitious writings, but rather in the real time behaviors, occurrences, and transactions actually performed by Plaintiff and Defendants. 1 A detailed description of the machinations of CashCall s funding and underwriting of these payday loans while using Western Sky, LLC as a shell entity is described in great detail in Plaintiff s First Amended Complaint as well as the New Hampshire Banking Department s Cease and Desist Order to these Defendants dated June 4, 2013, attached as Exhibit B to the First Amended Complaint. Page 3 of 26

4 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 4 of 26 It cannot be emphasized enough that there is no tribe which is a party to this case. The transactions alleged in this complaint are not subject to the Indian Commerce Clause of the United States Constitution because they were not made by an Indian tribe they were made by a South Dakota limited liability company owned by one person. Am. Compl. 9. Western Sky is not an arm of the Cheyenne River Sioux Tribe, nor does the Cheyenne River Sioux Tribe have any ownership interest or operating role in Western Sky. Am. Compl All of CashCall s operations occur outside of the boundaries of any lands currently recognized by the United States government as belonging to the Cheyenne River Sioux Tribe, and CashCall is not owned or operated by the Cheyenne River Sioux Tribe. Am. Compl. 55, 64, Ex. B. Plaintiff has never set foot on any lands recognized as belonging to the Cheyenne River Sioux Tribe. Am. Compl. 77, 79-81, 86, 88. None of the banking transactions involving Plaintiff took place on the tribal lands of the Cheyenne River Sioux Tribe. Am. Compl. 63, 65, 86. Western Sky does not accept any payment from consumers. Am. Compl. Ex. B., p. 5. Consumers apply for small loans or payday loans through a call center, CashCall s website, or (no longer operational). Am. Compl. 29. Pursuant to an agreement between Western Sky and WS Funding, CashCall provides website hosting and support services for Western Sky. Am. Compl. 30. Page 4 of 26

5 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 5 of 26 Additionally, CashCall reimburses Western Sky for all costs of maintenance, repair and/or update costs associated with Western Sky s server. Am. Compl. 30. Each Defendant plays a different role in the operation, but CashCall is the ringleader. CashCall also reimburses Western Sky for its office, payroll, and postage and provides Western Sky with a toll free telephone and fax number. Am. Compl. 31. CashCall also provides an array of marketing services to Western Sky, including but not limited to creating and distributing print, internet, television, and radio advertisements and other promotional materials. Am. Compl. 32. Once a consumer application for a loan is received via the call center, CashCall s website, or CashCall reviews the application for underwriting requirements. Am. Compl. 33. When an application is approved, Western Sky executes a promissory note and debits a so-called Reserve Account to fund the promissory note. Am. Compl. 34. The Reserve Account is a demanddeposit bank account set up in the name of Western Sky which carries a balance equal to the full value of two days promissory notes calculated on the previous month s daily average. Am. Compl. 35. Under an agreement between Western Sky and WS Funding, CashCall is required to set up, fund, and maintain the balance in the Reserve Account. The initial balance in the Reserve Account must Page 5 of 26

6 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 6 of 26 be $100,000. Am. Compl. 36. After the loan is funded, CashCall is obligated by agreement to purchase the promissory note from Western Sky. Am. Compl. 37. Western Sky does not accept payments from consumers. Am. Compl. 40. Western Sky does not make loan decisions. Western Sky does not market the loan product. Western Sky does not service the loan. Western Sky does not fund the loan with its own money. Western Sky earns money by receiving a percentage of the value of each loan from CashCall. Am. Compl. 42, 43. Defendants have made substantial efforts to conceal the business scheme from consumers and regulators. Am. Compl. 46. Western Sky does not identify its relationship with CashCall in any marketing materials, and the loan agreements identify Western Sky as the lender. Am. Compl. 47, 48. Consumers believe they are dealing with a tribal entity called Western Sky but, in reality, they are dealing with a California corporation that specializes in payday loans. Am. Compl. 49, 50. The scheme allows CashCall to make and fund high-interest loans that violate every usury law in the country by laundering them through Western Sky the front-end sham organization. This lawsuit challenges the legality of a California corporation falsely claiming to operate on tribal land for the sole purpose of executing a loan agreement. The only contact that any of the consumer Page 6 of 26

7 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 7 of 26 loans have with the Cheyenne River Sioux Tribe is that an employee of Western Sky clicks a button to execute the loan on a computer server located in California. In our about June of 2012, Plaintiff was watching television in Georgia and saw a television advertisement for Western Sky and its website, westernsky.com. Am. Compl. 77. Plaintiff Joshua Parnell accessed the website westernsky.com from his computer in Georgia, completed an online application for a loan, and he submitted his loan application online. Am. Compl. 79. Within ten minutes of submitting his application online at westernsky.com, Plaintiff received a phone call in Georgia from a Western Sky employee who stated that Plaintiff had been approved for a loan in the amount of $1, Am. Compl. 80. Plaintiff received an on his computer (still in Georgia) which contained the Loan Agreement. Plaintiff digitally signed the Loan Agreement on his computer in Georgia, and within 72 hours received a direct deposit of funds in the amount of $1, into his bank account in Georgia. Am. Compl. 86. In less than a month after Plaintiff received his funds, CashCall sent a notice to Plaintiff in Georgia informing him that all of his payments due on the Loan Agreement were now to be paid to CashCall in California. Am. Compl. 87. Plaintiff made all of his payments from Georgia to CashCall in California. Am. Compl. 88. Page 7 of 26

8 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 8 of 26 This second set of facts is referred to herein as the Actual Facts. Plaintiff feels it necessary to distinguish between the set of Loan Agreement Facts and the Actual Facts. CashCall is asking this Court to apply the Loan Agreement Facts when analyzing their legal arguments, but the threshold issue for analysis on this case is whether the Court will apply the fictitious Loan Agreement Facts or the actual physical, sentient, and subjective Actual Facts. If the Court applies the Actual Facts rather than the fictitious Loan Agreement Facts, CashCall s Renewed Motion to Dismiss cannot be granted. STANDARD OF REVIEW The standard of review for motions to dismiss for Forum Non Conveniens was very recently altered by the Supreme Court in Atl. Marine Constr. Co., Inc. v. U.S. Dist. Court for W. Dist. Of Tex., 134 S.Ct. 568 (2013). Prior to Atlantic Marine, the Eleventh Circuit held that to obtain dismissal based on Forum Non Conveniens, the burden of proof was on the Defendant to demonstrate: 1) an adequate and alternative forum was available; 2) the public and private factors weighed in favor of dismissal; and 3) the plaintiff could reinstate their suit in the alternative forum without undue inconvenience or prejudice. See e.g. Galbert v. West Caribbean Airways, 715 F.3d 1290, 1295 (11 th Cir. 2013); Leon v. Millon Air, Inc., 251 F.3d 1305, 1311 (11 th Cir. 2001). Unless the balance was strongly in Page 8 of 26

9 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 9 of 26 favor of dismissal, the plaintiff s choice of forum was to rarely be disturbed. See Kostelac v. Allianz Global Corporate & Specialty AG, 517 Fed. Appx. 670, 673 (11 th Cir. 2013). District courts "require[d] positive evidence of unusually extreme circumstances, and should be thoroughly convinced that material injustice is manifest before exercising any such discretion as may exist to deny a United States citizen access to the courts of this country." SME Racks, Inc. v. Sistemas Mecanicos Para Electronica, S.A., 382 F.3d 1097, 1101 (11 th Cir. 2004) (quotations omitted). A district court could dispose of an action by a Forum Non Conveniens dismissal... when considerations of convenience, fairness, and judicial economy so warrant. Sinochem Int l Co Ltd. V. Malaysia Int l Shipping Corp., 549 U.S. 422, 432 (2007) (emphasis added). The Supreme Court held in Atlantic Marine that when the parties contract contains a valid forum-selection clause, that clause should be given controlling weight in all but the most exceptional cases. See Atl. Marine, 134 S.Ct. at 581 (emphasis added). Additionally, the presence of a valid forum-selection clause requires district courts to adjust their usual... analysis in three ways. Id. (emphasis added). The Plaintiff s choice of forum no longer merits weight; the court should not consider the parties private interests, only the public interest Page 9 of 26

10 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 10 of 26 factors; and if a case is transferred, the law of the transferor venue is not required to be applied in the transferee court. See id. at Therefore, the current proper analysis for a motion to dismiss under Forum Non Conveniens is to first determine if a forum selection clause is valid under Federal law. If the clause is not valid, the clause cannot be enforced. If the clause is valid, the Court can no longer give deference to the Plaintiff s initial choice of forum and the Court can no longer consider private interest factors, but the Court shall consider public interest factors. The burden of proof is on the party opposing the forum selection clause to show that the public interest factors disfavor the selected forum in the clause. Courts may still consider fairness and whether extreme circumstances denying a U.S. Citizen access to U.S. courts would result in manifest injustice. MEMORANDUM OF LAW When the Actual Facts are applied rather than the Loan Agreement Facts, it becomes clear that this Court should deny CashCall s Renewed Motion to Dismiss because the forum selection clause is the product of fraud and overreaching. Additionally, the clause is not enforceable under federal law because the public interest factors strongly disfavor dismissal. Finally, this case contains extreme Page 10 of 26

11 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 11 of 26 circumstances which should prevent this matter from being heard in a foreign forum because a manifest injustice would occur. I. The Forum Selection Clause is Invalid Because it is the Product of Fraud and Overreaching Forum selection clauses and choice of law clauses will be found unreasonable and unenforceable when their formation was induced by fraud or overreaching. Xena Invs., Ltd. v. Magnum Fund Mgmt., 726 F.3d 1278, (11 th Cir. 2013) (quoting Lipcon v. Underwriters at Lloyd's, 148 F.3d 1285, 1296 (11 th Cir. 1998)). Forum selection clauses are presumptively valid and will be enforced absent evidence of fraud, overreaching or similar inequitable conduct. Cornett v. Carrithers, 465 Fed. Appx. 841, 842 (11th Cir. 2012). A. The Loan Agreement Facts are fraudulent. The Loan Agreement contains a recitation of stipulated facts which are patently false. The Loan Agreement makes absurd implications and statements including the claims that Plaintiff while sitting in his home in Georgia was entering into the boundaries of the Cheyenne River Sioux Tribe to apply for the loan; that Plaintiff received the money from Western while Plaintiff was within the boundaries of the Tribal lands; that Plaintiff s bank was receiving the electronically transferred funds on tribal lands; that CashCall was accepting payments from Page 11 of 26

12 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 12 of 26 Plaintiff on tribal lands. The Loan Agreement Facts have no basis in reality. These statements are objectively false. The New Hampshire Department of Banking reviewed the practices of these Defendants and concluded that Western Sky is nothing more than a front to enable CashCall to evade licensure by state agencies and to exploit Indian Tribal Sovereign Immunity to shield its deceptive business practices from prosecution by state and federal regulators. (See N.H. Banking Dept. Order to Cease & Desist, June 4, 2013, attached as Exhibit B to Am. Compl.) CashCall s entire legal argument for dismissing under Forum Non Conveniens is based upon the Court applying facts that did not objectively happen. The forum selection clause is based upon objectively false facts designed to elude consumer protection regulations. There is no objectively true set of facts which support the forum selection clause. The parties to the Loan Agreement are a California corporation, a South Dakota Limited Liability Company, and a resident of Georgia; none of the parties are members of the Cheyenne River Sioux Tribe and none of the transactions involve the Cheyenne River Sioux Tribe. There is no basis for the forum selection clause other than the evasion of licensure by state agencies and the exploitation of Indian Tribal Sovereign Immunity to avoid prosecution by state and federal regulators. There is only one reason for the forum selection clause: to fraudulently avoid regulation. Page 12 of 26

13 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 13 of 26 All of the fraudulent statements are made in order to falsify the record so that Western Sky and CashCall can engage in business practices which violate the consumer protection laws they are subject to as companies practicing business in the United States. Both Western Sky and CashCall know that they are U.S. companies availing themselves and their business products to the state of Georgia, but the Loan Agreement Facts seek to falsify the record in order to make unsuspecting consumers believe they have no right of recourse as U.S. Citizens in the U.S. court system. The forum selection clause is designed to deprive consumers of any available remedies under state and federal laws, including the GPLA. The forum selection of the Cheyenne River Sioux Tribe is chosen solely for the fact that no consumer protection laws of record exist in this tribal jurisdiction. The Loan Agreement is a cleverly crafted move with one intention: to fraudulently falsify the record of what transpired in order to attempt to enforce a forum selection clause with no other basis for jurisdiction. B. The forum selection of the tribal court is overreaching because the tribal court lacks jurisdiction. The U.S. Supreme Court has held that tribal jurisdiction is limited and does not include the activities of nonmembers occurring off the reservation. See Plains Commerce Bank v. Long Family Land & Cattle Co., 554 U.S. 316, 330 (2008). Page 13 of 26

14 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 14 of 26 Efforts by a tribe to regulate nonmembers are presumptively invalid. Id. (quoting Atkinson Trading Co. v. Shirley, 532 U.S. 645, 651 (2001) and Montana v. United States, 450 U.S. 544, 565 (1981)). The Court has recognized only two narrow exceptions to the presumption against tribal court subject matter jurisdiction, namely when: 1) nonmembers enter into a consensual commercial relationship with the tribe or a tribal member, or 2) nonmembers' conduct directly threatens the political integrity, the economic security, or the health or welfare of the tribe. Montana, 450 U.S. at Applying this precedent, the Eighth Circuit issued a clear line that "[n]either Montana nor its progeny purports to allow Indian tribes to exercise civil jurisdiction over the activities or conduct of non-indians occurring outside their reservations." Hornell Brewing Co. v. Rosebud Sioux Tribal Court, 133 F.3d 1087, 1091 (8th Cir. 1998). The tribe is not a party to this transaction, and neither Plaintiff nor CashCall nor Western Sky are Tribal members. Therefore, this transaction does not meet the first exception to the presumption against Tribal subject matter jurisdiction. As for the second exception, the revealing details of these transactions show that CashCall is the primary economically interested party in this shell funding game. CashCall is a California corporation attempting to exploit one man s Tribal membership in Page 14 of 26

15 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 15 of 26 order to reap profits for CashCall by avoiding regulation. Therefore, the presumption remains against tribal subject matter jurisdiction. Mere consent to be sued, even consent to be sued in a particular court, does not alone confer jurisdiction upon that court to hear a case if that court would not otherwise have jurisdiction over the suit. See Tamiami Partners, Ltd. v. Miccosukee Tribe of Indians, 999 F.2d 503, 508 (11th Cir. 1993) (citing Weeks Constr., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668, 671 (8th Cir. 1986)). CashCall must prove that something more than the consent to be sued constitutes actions by Plaintiff actually occurring on Tribal lands in order to find proper application of the Indian Commerce Clause. Defendant cites no authority which suggests that internet transactions in Georgia can equal conduct by non-tribal member Plaintiff on the lands of the Cheyenne River Sioux Tribe. If the legal presumption is that the Tribe s ability to regulate the behavior of a nonmember like Plaintiff is invalid, and mere contractual consent to jurisdiction does not legally constitute conduct on tribal lands, then there exists no legal basis for the Tribal Court to have subject matter jurisdiction over this matter. CashCall argues in its motion that the tribal exhaustion doctrine should be applied because a colorable claim of Tribal jurisdiction has been made. Doc. 18-1, p. 21. However, by applying the three-part test articulated in Montana and cited Page 15 of 26

16 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 16 of 26 in CashCall s brief to determine if a jurisdictional claim is colorable, it is clear that this case fails that test. Tribal jurisdiction reaches nontribal members when a dispute arises from: 1) a consensual commercial relationship with 2) a tribal member and 3) the commercial conduct underlying the dispute occurred on the reservation. See Montana, 450 U.S. at This case fails this test because none of the parties in this transaction are members of the Tribe. Plaintiff is a Georgia resident; CashCall is a California corporation; Western Sky is a South Dakota limited liability company. It cannot be stated enough: there is no tribe in this case. The commercial conduct also did not occur on the Tribal lands. CashCall performs all the essential elements of the transactions in California and merely uses Western Sky as a phony shell. CashCall erroneously cites to several cases as representing the principle that (c)ourts have consistently recognized that, as a result of sharing their owners identities, Indian-owned companies also enjoy the privileges of tribal membership. Doc. 18-1, p. 22. The Pournier court held that a corporation owned by the tribe or an enrolled tribal member residing on the Indian reservation and doing business on the reservation for the benefit of reservation Indians is an enrolled member for the purpose of protecting tax immunity. Pourier v. S.D. Dep't of Revenue, 658 N.W.2d 395, 404 (S.D. 2003) (emphasis added). Likewise, the Page 16 of 26

17 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 17 of 26 Confederated Tribes court held the question of immunity from the County's property tax assessments on the Great Wolf Lodge cannot be made to turn on the Tribe's decision to give ownership of the Lodge to its limited liability company. Confederated Tribes of the Chehalis Reservation v. Thurston County Bd. of Equalization, 724 F.3d 1153, 1157 (9th Cir. 2013). None of these cases are on point because both of these cases deal with immunity from taxes and not the application of the colorable claim test required for the tribal exhaustion doctrine which CashCall is attempting to apply in the present case. Additionally, the Confederated Tribes case involves a limited liability company owned and operated directly by the tribe, not a member of a limited liability company renting out his tribal membership to help a California corporation engage in shell game to avoid regulation and make usurious loans in the state of Georgia. These cases are not persuasive and not controlling. CashCall s attempt to invoke the tribal exhaustion doctrine fails. Defendant is attempting to force an application of tribal immunity which has no justification. The forum selection clause is overreaching because it seeks to invoke tribal jurisdiction when no basis exists for such forum. Page 17 of 26

18 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 18 of 26 II. The Forum Selection Clause is Not Enforceable under Federal Law. As previously discussed, the forum selection clause is invalid because it is the product of fraud and overreaching. However, even if this Court found the forum selection clause was not invalid for those reasons, this Court should deny enforcing the clause because public interest factors favor keeping this action in Georgia. The party opposing the forum selection clause bears the burden to prove public interest factors disfavor removal. See Atl. Marine, 134 S.Ct. at 581. The public factors bearing on the question include the local interest in having localized controversies decided at home; the interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action; and the administrative burdens. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 (1981). Georgia has a local interest in deciding controversies which occur in Georgia. CashCall s Motion to Dismiss errantly suggests that the laws at issue in this action are the laws of the Tribe. CashCall s motion never bothers to actually cite any of these alleged laws which would govern this action, but the absence of any consumer protection laws on the reservation of the Tribe is the sole point to the charade. This suit seeks resolve whether CashCall s scheme can legally circumvent Georgia s laws. Plaintiff believes the answer is no, and that it Georgia s primary interest to make this determination about loans being made in Georgia rather than a Page 18 of 26

19 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 19 of 26 tribal court with no meritorious basis for jurisdiction. Application of the Actual Facts to this factor cannot support the conclusion that the Tribe has any interests in this case, or that Georgia s interests are minimal. The Georgia legislature achieved passage of the GPLA through both branches of the legislature and it was signed into law by a sitting Governor which suggests that quite a few of Georgia s duly elected officials would disagree with CashCall s assertion that Georgia s interest are minimal in the loans being made by Defendants to residents of Georgia. The scheme operated by CashCall and Western Sky is analogous to the evil that the General Assembly sought to remedy with the creation of the GPLA in In an attempt to circumvent state usury laws, some payday lenders have contracted with federally chartered banks or state chartered banks insured by the FDIC to take advantage of federal banking laws that allow such banks to make loans across state lines without regard to that state's interest and usury laws in rent-a-charter or rent-a-bank contracts. USA Payday Cash Advance Centers v. Oxendine, 262 Ga.App. 632, 634 (2003). Here, CashCall attempts to transact business as a sovereign nation, out of reach of Georgia laws, by renting the sovereignty of the Tribe, just as the in-state lenders sought to circumvent Georgia law by renting and out-of-state bank s charter. In 2004, the legislature addressed this practice and enacted Senate Bill 157, codified Page 19 of 26

20 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 20 of 26 as OCGA et seq. Section 2 of the Act states that [i]t shall be unlawful for any person to engage in any business, in whatever form transacted, including, but not limited to, by mail, electronic, the Internet, or telephonic means, which consists in whole or in part of making, offering, arranging, or acting as an agent in the making of loans of $3, or less[.] 2004 Ga. Laws 440 (S.B. 157) (emphasis added, codified at OCGA listing exceptions to which none apply to Defendant). More recently, the Attorney General for Georgia (hereinafter State AG ) has expressed quite a bit of interest in the behavior of these specific defendants. The State AG sent letters on two occasions to Western Sky in November, 2010 and May, 2012 declaring that the loans being made by Western Sky over the internet were in violation of Georgia law. Attached hereto as Exhibits A and B. On May 11, 2012, attorneys for Western Sky sent a letter to the State AG in response. Attached hereto as Exhibit C. In that response letter, Western Sky declares that a disclaimer has been added to the state pull down on the business websites specifically stating that his payday loans are not available to the residents of the State of Georgia. This decision was fully effective May 10, When Plaintiff was watching television in Georgia in June, 2012 and responded to the advertisement from Western Sky by applying for a loan from his Page 20 of 26

21 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 21 of 26 computer in Georgia, no statement was ever made on the Western Sky website or television advertisement which stated that the loans being advertised were not available in Georgia, nor did the Western Sky employee who telephoned Plaintiff at his house in Georgia inform Plaintiff that the loans were not available in Georgia. Even as late as August 19, 2013, Western Sky s website still indicated that it could offer loans in the State of Georgia 2. Western Sky failed to include any language in the Loan Agreement that the State AG regarded these loans to be illegal in the state which Plaintiff resided. The failure of Western Sky and its business partners to comply with Georgia law has led the State AG to file suit against Western Sky 3. The local interests of Georgia (as expressed by our legislature and State AG) are clearly superior to those of the Cheyenne River Sioux Tribe, and thus, support denial of CashCall s Renewed Motion to Dismiss 2 See app/application.aspx (last visited March 4, 2014). 3 That case is captioned as State of Georgia ex rel. Samuel S. Olens, Attorney General of the State of Georgia v. Western Sky Financial, LLC, Martin A. Webb. And CashCall, Inc., case no cv in the Superior Court of Fulton County, Georgia. Page 21 of 26

22 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 22 of 26 The public interest factor of having the trial of a diversity case in a forum that is home with the law also weighs strongly against dismissal. CashCall brazenly states there is no doubt foreign law would apply to Plaintiff s action. Doc. 18-1, p. 9. However, again, the only path one can use to reach this conclusion is to accept the Loan Agreement Facts as true. The only basis for subjecting this action to foreign law would be to improperly apply the Indian Commerce Clause. As discussed supra, there is no basis for applying the Indian Commerce Clause because the Tribe has no legitimate basis for personal or subject matter jurisdiction. Georgia is the home forum of the laws which form the basis of Plaintiff s action. Plaintiff filed suit under the GPLA. This Court should maintain jurisdiction over this action because the courts of Georgia are more experienced with Georgia law. Defendant has failed to cite to any laws which would govern this action in the Tribal Court. The administrative burden of having a South Dakota tribal court determine the rights of Georgia residents under Georgia statutes also weighs heavily against dismissal. This Court should maintain jurisdiction, and deny CashCall s Renewed Motion to Dismiss because the public interest factors weigh HEAVILY against dismissal, and Plaintiff has carried his burden in proving such. Page 22 of 26

23 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 23 of 26 III. Dismissal Would Result in Manifest Injustice The Supreme Court has stated forum selection clauses to foreign jurisdictions can be found unenforceable in extreme circumstances. See Atl. Marine, 134 S.Ct. at 582. In addition to the multiple grounds cited above to deny CashCall s Renewed Motion to Dismiss, this Court should consider the extreme danger to consumer protection in Georgia that the business model of Defendants represents. Various regulatory agencies from states throughout the country have already, or are in the process of, shutting down Defendants operations. In September, 2011, the Federal Trade Commission ( FTC ) filed suit against Western Sky charging that it sought to unfairly and deceptively manipulate the legal system and force debt-burdened consumers throughout the country to travel to South Dakota and appear before a tribal court that did not have jurisdiction over their cases 4. In addition to the FTC s currently pending action against these same Defendants, judicial notice should be taken that ten states have filed lawsuits and issued various administrative findings of fact and cease and desist orders against Defendants for similar lending activity as this case alleges. The number of regulatory agencies who have found the behavior of Defendants to be outside of 4 That case is still currently pending before the U.S. District Court of South Dakota, Central Division (FTC v. Payday Financial, LLC et al., RAL). Page 23 of 26

24 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 24 of 26 the law is noteworthy because the Defendants business model puts the entire notion of law and regulation at risk. Georgia passed the GPLA because its duly elected officials believed that Georgia consumers deserved a certain level of protection from predatory lenders. If businesses such as Defendants are allowed to simply contract out of any regulations imposed upon them, it threatens the integrity of all consumer protection regulations. If all businesses engaging in transactions with Georgia consumers were able to render the state s regulations toothless with a mere foreign forum selection clause with no requirement for a legally legitimate basis for jurisdiction, all state and federal protections for consumers would disappear overnight, and our state and federal courts in Georgia would lose all jurisdiction over hearing cases predicated upon Georgia consumer protection laws. It is not hyperbole to state that dismissal for Forum Non Conveniens in this case would open a slippery slope for the erosion of consumer protection statutes in Georgia. Removal to the courts of the Cheyenne River Sioux Tribe would be manifestly unjust for the Plaintiff, who as a resident of Georgia, deserves the protection of the laws of Georgia. If the business model of Defendants is allowed to stand, every consumer in Georgia will eventually be presented with a disclaimer such as the following when entering a business establishment: Page 24 of 26

25 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 25 of 26 Your actions are now governed by [insert foreign nation here]. Neither this transaction nor this business owner is subject to the laws of any state of the United States of America. By executing this Agreement, you hereby expressly agree that all events and transactions are being executed and performed solely within the exterior boundaries of [insert foreign nation here]. You also expressly agree that this Agreement shall be subject to and construed in accordance only with the provisions of the laws of [insert foreign nation here] and that no United States state or federal law applies to this Agreement. You agree that by entering into this Agreement you are voluntarily availing yourself of the laws of [insert foreign nation here], and that your execution of this transaction is made as if you were physically present within the exterior boundaries of [insert foreign nation here.] Georgia consumers will be left without the protections their duly elected representatives provide for them. The manifest unfairness of allowing Defendants to perpetrate their fraudulent shell game on Georgia citizens is overwhelming. This court should decline their invitation to allow it to continue. CONCLUSION For the foregoing facts, arguments, and citations of authority, Plaintiff requests this Court DENY Defendant CashCall s Renewed Motion to Dismiss Based on Forum Non Conveniens. Respectfully submitted this 1st day of April, Page 25 of 26 HURT STOLZ, P.C. James W. Hurt, Jr. Georgia Bar No

26 Case 4:14-cv HLM Document 22 Filed 04/01/14 Page 26 of W. Hancock Ave Athens, Georgia (706) Facsimile: (866) Perimeter Center North Suite 300 Atlanta, GA Phone: (678) Fax: (404) ARMOR LAW, LLC /S/ CHRIS ARMOR Christopher N. Armor Georgia Bar No Page 26 of 26