Case Updates
January 6, 2021
The Court granted final settlement approval and the first round of checks
were mailed last year. A second round of checks is expected to be mailed
later this year.
July 2, 2020
The Court has granted Preliminary Approval of the parties' settlement and
a final fairness hearing is scheduled for October 1, 2020.
March 13, 2020
The parties have reached a class-wide settlement in this case, and Plaintiffs
have moved for Preliminary Settlement Approval.
November 1, 2019
Class Certified in “Tribal Immunity” Case Brought by Nichols
Kaster, PLLP and Gupta Wessler PLLC
On October 31, 2019, the Court granted Plaintiffs’ motion for class
certification in MacDonald v. CashCall, Inc. The case involves more than
11,000 borrowers in New Jersey whose loans through a company called Western
Sky carry interest rates ranging from 79% to 200%. Plaintiffs allege that
CashCall and the other Defendants in this case are the true lenders and
that they used a purported tribal affiliation to avoid usury and related
laws. Plaintiffs sued under New Jersey usury law, the New Jersey Consumer
Fraud Act, and RICO. In granting class certification, the Court held that:
the proposed classes are sufficiently numerous; class members are ascertainable;
the class representatives are typical and adequate; Nichols Kaster, Gupta
Wessler, and Patricia Barasch are adequate class counsel; a class action
is the superior means of resolving the dispute; individual issues do not
predominate, and “the questions of whether Defendants charged interest
rates in excess of those permitted by New Jersey law will be common, as
will questions of whether Defendants and Western Sky together formed an
enterprise sufficient for liability under RICO.” The case is MacDonald,
et al. v. CashCall, Inc., et al., No. 2:16-cv-02781-MCA-ESK and is filed
in the United States District Court for the District of New Jersey.
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March 1, 2018
Third Circuit Rules in Favor of Nichols Kaster Client in Lawsuit Over Predatory
Online Lending
In a precedential opinion released on February 27, 2018, a panel of the
United States Court of Appeals for the Third Circuit held that consumers
who were subjected to short-term online loans at interest rates in excess
of 100% may proceed with a class action in federal court, rather than
being forced into individual arbitrations. At the heart of the dispute
is a $5000 online loan made to a New Jersey consumer by a California lender
named CashCall. The loan purports to carry an annual interest rate of
116.73% and total finance charges of $35,994.28. Although the loan was
processed via a series of intermediary entities, courts and regulators
have found that CashCall was the true lender.
The lawsuit contends that the terms of this loan violate various state
and federal banking, consumer protections, and racketeering laws. CashCall
and its affiliates responded by arguing that an arbitration clause in
the loan agreement that requires arbitration before an “authorized
representative” of the “Cheyenne River Sioux Tribal Nation”
prevents the lawsuit from moving forward as a class action in federal
court. The Third Circuit rejected this argument, noting that the Cheyenne
River Sioux Tribe does not have authorized representatives that conduct
such arbitrations, and holding that the arbitration clause in the loan
agreement is “unenforceable” because it requires arbitration
before an “illusory forum.”
The plaintiff in the case is represented by Brock J. Specht of Nichols
Kaster, PLLP and Matthew W.H. Wessler of Gupta Wessler PLLC. A copy of
the Third Circuit’s opinion can be found
here.
