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February 26, 2020

1/2/2020 7:27:00 AM
Plaintiff opposes motion to dismiss LdF racketeering case
Abigail Bostwick
of the Lakeland Times

The attorneys representing a Pennsylvania man who brought a federal lawsuit against Lac du Flambeau Tribal lenders have filed a response to the defendants' motion to have the alleged interest rate scam case dismissed.

The lawsuit

According to the complaint filed 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 - which 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 loans - such as the $600 Jones borrowed - violate 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 as defendants.

The lawsuit alleges those who took out such LdF loans did 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 dollars in damages. He took out the loan for personal, household and family related expenses and was approved for the loan with a 690% annual percentage rate, according to federal court records.

Motion to dismiss

In the fall, attorney Shannon Miller of Maurice Wutscher, LLP in Pennsylvania, who is representing the 11 LdF defendants, filed a motion arguing the complaint does not hold merit and should be dismissed on the basis that Indian tribes and their tribally-created entities are entitled to immunity from suit and the court lacks personal jurisdiction over the 11 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," the motion states.

Opposing dismissal

The four attorneys representing the plaintiff argue in their response to the defense motion that 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 response states. "....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."

Individual defendants are not immune and should be held liable, the attorneys added.

"Directing LdF Holdings to charge Mr. Jones interest at the rate of 690% APR is clearly misfeasance," the response states.

Further, the plaintiffs state, 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.

"Defendants' motions to dismiss should be denied together with any other relief that is just and appropriate," attorney Robert Salvin of Pennsylvania concluded.

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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