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CashCall

MacDonald v. CashCall, Inc, et al
No. 2:16-cv-02781-MCA-LDW (District of New Jersey)

In May of 2016, we filed a case against CashCall, Inc., WS Funding, LLC, Delbert Service, Corp., and J. Paul Reddam on behalf of John MacDonald and a proposed class of New Jersey borrowers who took out loans through Defendants/Western Sky. The lawsuit alleges that Defendants charged unlawfully high interest rates in violation of state law and that Defendants wrongly represented that the loans were not subject to state law. The Court has denied Defendants’ motion to compel arbitration or dismiss, and the Third Circuit has affirmed. If you are a New Jersey resident who took out a loan through Defendants/Western Sky and would like more information about this case, please contact our paralegal Kristine Nelson (knelson@nka.com). 

Type of Case

Illegal Payday Loans

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Case Updates

  • 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.

    Photo by Sebastian Pichler on Unsplash

  • 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.

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