This new payday lenders must dump Rent A financial techniques whenever government authorities intervened and place a halt in it
In Williams, mais aussi al. v. , mais aussi al., 3:17cv461 (E.D. Va.) (“Williams“), Renee Galloway, mais aussi al. v. , et al., 3:18cv406 (E.D. Va.) (“Galloway We“) and Renee Galloway, et al. v. Martorello, et al., 3:19cv314 (E.D. Va.) (“Galloway WeI“), the Plaintiffs filed three similar, but in some respects substantively quite different, actions arising out of a so-called “Rent A Tribe” scheme allegedly orchestrated by Matt ily, companies that he controls, and investors who allegedly funded the scheme (the “Martorello Defendants”). (“Ascension”) (collectively sometimes referred to as the “Tribal Defendants”) are entities formed under the tribal laws of the Lac View Band of Lake Superior Chippewa Indians (“LVD”). Big Picture and Ascension are also defendants in Williams and Galloway I, and both entities are alleged to be implicated in the Rent A Tribe scheme that lies at the core of the Plaintiffs’ claims on those cases.
In Williams, Big Picture and Ascension claimed to share LVD’s sovereign immunity and, on that basis, those entities sought dismissal of the case against them. This Court rejected that argument. On appeal, the United States Circuit Court of Appeals for the Fourth Circuit held that Big Picture and Ascension were entitled to the protection of LVD’s sovereign immunity.
Williams v. , 929 F.3d 170 (4th Cir. 2019). In so ruling, the Fourth Circuit made clear that its decision does not affect the merits of the Plaintiffs’ claims. Id. at 185. It appears that the Fourth Circuit relied on this Court’s findings of fact, finding no clear error in those findings. Williams v. , 929 F.3d at 177.
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Those entities also claimed sovereign immunity in Galloway I. Big Picture, Ascension and many other defendants since have reached a class action settlement of Williams, Galloway We, and Galloway WeI that was filed in yet another case, Renee Galloway, ainsi que al. v. James Williams, Jr., ainsi que al., 3:19cv470 (E.D. Va.) (“Galloway III“). That settlement has been preliminary approved and a hearing on a motion for final approval is set for .
Following the s, the Court directed that the parties file Statements of Position explaining, how, if at all, the decision of the Fourth Circuit affected these proceedings and pending motions (ECF Nos. 599 and 601). In his Statement of Position, Martorello argued that the holding that Big Picture and Ascension are protected from suit by LVD’s sovereign immunity has substantive and procedural consequences that necessitate dismissal of the case against them. MARTORELLO’S STATEMENT OF POSITION PURSUANT TO ECH NOS. 599 & 601 (ECF No. 613). In their response to MARTORELLO’S STATEMENT OF POSITION PURSUANT TO ECH NOS. 599 & 601, the Plaintiffs asserted, inter alia, that Martorello and others made material misrepresentations to this Court and to the Fourth Circuit about the facts pertaining to sovereign immunity and that, as a result, the Fourth Circuit’s decision on that issue cannot be relied on by Martorello. PLAINTIFFS’ RESPONSE TO MATT MARTORELLO’S STATEMENT OF POSITION (ECF No. 624). This Memorandum Opinion addresses the alleged misrepresentations and their effect in these proceedings.
Although this ORDER was not entered in Galloway I, the parties New York title loans have briefed the misrepresentations issues in the same way as in Williams.
The facts of Williams and Galloway I, insofar as they pertain to Martorello, have their genesis in the efforts of so-called payday lenders to evade state usury laws by using, as loan conduits, national banks, which, by virtue of the National Bank Act, 12 U.S.C. § 85, are exempt from the interest rate caps set by state laws. Under those arrangements, the payday lenders funded, serviced, and collected loans that were nominally made by the national banks which received a small payment in return for fronting the loans. Those schemes were known commonly as “Rent A Bank” schemes.