Berman Tabacco

Victims of Plain Green “Rent-a-Tribe” Lending Scheme Score Major Win in Second Circuit

April 26, 2019

BOSTON – In a long-awaited opinion, the U.S. Court of Appeals for the Second Circuit today ruled that borrowers who took out loans from the Native American-affiliated online lender Plain Green can proceed with their nationwide RICO class action in Vermont federal court. The Second Circuit affirmed a May 2016 ruling by District Judge Geoffrey W. Crawford and comes nearly two years after oral argument on Defendants’ appeals. Berman Tabacco and Gravel & Shea PC are Lead Counsel in the case, Gingras, et al. v. Rosette, et al., No. 5:15-cv-00101-gwc (D. Vt.).

In affirming borrowers claims, the Second Circuit rejected the Plain Green directors’ and officers’ argument that they are immune from suit based on Plain Green’s status as an arm of the Chippewa Cree Tribe of the Rocky Boy’s Indian Reservation. According to the Second Circuit, because “Plain Green is a payday lending entity cleverly designed to enable[] Defendants to skirt federal and state consumer protection laws under the cloak of tribal sovereign immunity,” the Tribe and its officers “are not free to operate outside of Indian lands without conforming their conduct in these areas to federal and state law.”

The Second Circuit also ruled that the “agreements here are both unenforceable and unconscionable” and Defendants could not rely on forced arbitration and purported choice of tribal law provisions in Plain Green’s loan documents to deny borrowers their right to pursue federal claims in federal courts. The Court affirmed Judge Crawford’s ruling that the arbitration provisions “effectively insulate Defendants from claims that they have violated federal and state law.” In so doing, the Second Circuit joined the Fourth and Seventh Circuits in refusing to enforce arbitration provisions that would have borrowers disclaim their rights under federal and state law, agreeing with the Fourth Circuit’s characterization of the arbitration component of Defendants’ scheme as a “farce.”

The Second Circuit case is captioned Gingras, et al. v. Think Finance, Inc., et al., No. 16-2019 (2d Cir. Apr. 24, 2019). The case is being prosecuted from Berman Tabacco’s Boston office by Kathleen Donovan-Maher, Steven Buttacavoli, and Steven Groopman, and Matthew Byrne of Gravel & Shea PC.

Berman Tabacco and Gravel & Shea PC also serve as Lead Counsel in similar tribal lending cases, Solomon v. American Web Loan, et al., No. 4:17-cv-00145-HCM-RJK (E.D. Va.), and Granger v. Great Plains Lending, et al., No. 1:18-cv-00112-WO-JLW (M.D.N.C.), and are representing the interests of Plain Green and Great Plains Lending borrowers in bankruptcy proceedings involving a key player in those schemes, Think Finance, In re: Think Finance, LLC, et al., No. 17-33964-hdh11 (Bankr. N.D. Tex.). Berman Tabacco continues to investigate other online lending schemes, including Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial, and Majestic Lake Financial.