Montana lending company officers claim tribal immunity, ask judge to dismiss lawsuit

MarketsAssociated Press

Three leaders of an online lending company owned by Montana's Chippewa Cree Tribe are claiming tribal immunity in asking a Vermont judge to dismiss a lawsuit that alleges they are predatory lenders who are breaking federal and state laws.

Plain Green CEO Joel Rosette and board members Ted Whitford and Tim McInerney said in their request filed Tuesday in U.S. District Court in Vermont that the judge should order the case to arbitration if he decides not to dismiss it outright.

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Plain Green is one of a growing number of tribe-owned companies across the nation that makes short-term loans at high interest rates. Some states have capped interest rates or otherwise set limits on payday and installment lenders. But the tribes have used the sovereign immunity doctrine and binding arbitration agreements to avoid state laws and squelch court challenges.

Vermont residents Jessica Gingras and Angela Given are asking U.S. District Judge J. Garvan Murtha to certify a class-action lawsuit against the Plain Green officers.

The women claim the company charges excessive interest rates, sets repayment schedules to maximize interest, requires access to borrowers' bank accounts and doesn't investigate borrowers' ability to repay loans.

The lawsuit says the practices amount to exploiting and extorting customers, who are often poor people who need emergency cash and have no other options to borrow money.

The financial and technological backer of Plain Green is a non-Native American company attempting to use the tribal-sovereignty doctrine to shield them from lawsuits over their practices, the women's attorney, Matt Byrne, said after filing the lawsuit in May.

The doctrine grants tribes the power of self-government and exempts them from state laws that infringe on that sovereignty. It also gives them immunity in many judicial proceedings.

Rosette, Whitford and McInerney said in their court filing that the women named them as individual defendants, instead of Plain Green, to get around the sovereign immunity issue. But the immunity extends to them when they are performing their duties for the company, they said.

Their motion to dismiss also argues that Plain Green and the tribe are necessary parties to the lawsuit but cannot be named as defendants because of sovereign immunity, so the judge must throw out the claim.

They also say the lawsuit was improperly filed in Vermont because they have no connection to the state, and they dispute the women's claims that Plain Green's lending practices violated unfair competition and practices regulations in the Federal Trade Commission act and Consumer Financial Protection Act.

If Murtha decides not to dismiss the lawsuit, the judge could send the case to a neutral arbiter. The women signed a contract binding them to arbitrate all disputes, and they chose not to opt out of arbitration, the men said in the filing.

Byrne declined to address the specific arguments made by the Plain Green officers.

"We anticipated that they'd make those arguments," he said Wednesday. "We disagree with nearly everything they said."