Davis ex rel. Situated v. Oasis Legal Fin. Operating Co., CIVIL ACTION NO. CV 317-022

• Decision Date: 15 November 2017
• Docket Number: CIVIL ACTION NO. CV 317-022
• Citation: Davis v. Oasis Legal Fin. Operating Co., CIVIL ACTION NO. CV 317-022 (S.D. Ga. Nov 15, 2017)
• Parties: LIZZIE DAVIS, PAMELA DAVIS, DENNIS GREEN, JOHNNY MOODY, JOHN SUBER, and SHIRLEY WILLIAMS, Individually and on Behalf of all Others Similarly Situated, Plaintiffs, v. OASIS LEGAL FINANCE OPERATING COMPANY, LLC, OASIS LEGAL FINANCE, LLC, and OASIS LEGAL FINANCE HOLDING COMPANY, LLC, Defendants.
• Court: U.S. District Court — Southern District of Georgia

LIZZIE DAVIS, PAMELA DAVIS, DENNIS GREEN, JOHNNY MOODY, JOHN SUBER,and SHIRLEY WILLIAMS, Individually and on Behalf of all Others Similarly Situated, Plaintiffs, v. OASIS LEGAL FINANCE OPERATING COMPANY, LLC, OASIS LEGAL FINANCE, LLC,and OASIS LEGAL FINANCE HOLDING COMPANY, LLC, Defendants.

CIVIL ACTION NO. CV 317-022

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF GEORGIA DUBLIN DIVISION

November 15, 2017

ORDER

Presently before the Court is a motion to dismiss filed by Defendants Oasis Legal Finance Operating Company, LLC ("Oasis Operating"), Oasis Legal Finance, LLC ("Oasis Finance"), and Oasis Legal Finance Holding Company, LLC ("Oasis Holding"), which attacks the sufficiency of the allegations against them under Federal Rule of Civil Procedure 12(b)(6).¹ Defendants also move to strike the class allegations of the complaint. The motion has been fully briefed and is ripe for consideration.

I. BACKGROUND

Plaintiffs filed this putative class action on February 2, 2017, in the Superior Court of Laurens County, Georgia. Plaintiffs are personal injury plaintiffs in the State of Georgia. Plaintiffs have entered into loan agreements ("Purchase Agreements") with Oasis,² often in amounts of $3,000 or less, in exchange for repayment through any recovery from their respective personal injury claims.³ Plaintiffs claim the Purchase Agreements are usurious and illegal. Plaintiffs filed the operative complaint in this case, the First Amended and Recast Class Action Complaint ("FAC"), in state court on March 30, 2017. (See Ex. 7 to Notice of Removal, Doc. 1-7.) The case was thereafter removed to this Court on April 28, 2017.

The FAC asserts the following causes of action: (1) the Purchase Agreements violate the Georgia Payday Lending Act ("PLA"), O.C.G.A. § 16-17-1 et seq. ("Count I"); (2) thePurchase Agreements violate the Georgia Industrial Loan Act ("GILA"), O.C.G.A. § 7-3-1 et seq. (Count II); and (3) the Purchase Agreements are usurious, in violation of O.C.G.A. § 7-4-18. In addition to compensatory and statutory damages, Plaintiffs also seek attorney's fees and litigation expenses under O.C.G.A. § 13-6-11.

II. LEGAL STANDARD

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) does not test whether the plaintiff will ultimately prevail on the merits of the case. Rather, it tests the legal sufficiency of the complaint. Scheur v. Rhodes, 416 U.S. 232, 236 (1974). Therefore, the court must accept as true all facts alleged in the complaint and construe all reasonable inferences in the light most favorable to the plaintiff. See Hoffman-Pugh v. Ramsey, 312 F.3d 1222, 1225 (11^th Cir. 2002). The court, however, need not accept the complaint's legal conclusions as true, only its well-pled facts. Ashcroft v. Iqbal, 556 U.S. 662, 677-79 (2009).

A complaint also must "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Id. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The plaintiff is required to plead "factual content that allows the court to draw the reasonableinference that the defendant is liable for the misconduct alleged." Id. Although there is no probability requirement at the pleading stage, "something beyond . . . mere possibility . . . must be alleged." Twombly, 550 U.S. at 556-57 (citing Durma Pharm., Inc. v. Broudo, 544 U.S. 336, 347 (2005)). When, however, on the basis of a dispositive issue of law, no construction of the factual allegations of the complaint will support the cause of action, dismissal of the complaint is appropriate. See Executive 100, Inc. v. Martin Cnty., 922 F.2d 1536, 1539 (11^th Cir. 1991).

III. LEGAL ANALYSIS

Through the motion to dismiss, Oasis contends that Plaintiffs breached the express terms of the Purchase Agreements by not filing this action in the Circuit Court of Cook County, Illinois. Alternatively, Oasis seeks dismissal under the doctrine of forum non conveniens. Oasis contends that Count III (the usury claim) should be dismissed because Georgia's usury laws provide no private right of action. Oasis seeks to strike the class allegations based upon an alleged waiver in the Purchase Agreements. Oasis also argues that class claims are not cognizable under the GILA. Finally, Oasis raises the statute of limitation with respect to Counts II and III.

A. The Forum

The Purchase Agreements contain a choice-of-law provision providing that the contracts will be "governed, construed and enforced in accordance with the laws of the State of Georgia." (See, e.g., FAC, Ex. B, Nonrecourse Purchase Agreement with Plaintiff Lizzie Davis, ¶ 6.5, Doc. 1-7.) The Purchase Agreements also provide the following forum-selection clause:

The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the Circuit Court of Cook County, Illinois for any disputes, claims, or other proceedings arising out of or relating to this Purchase Agreement, or the relationships that result from this Purchase Agreement, and agree not to commence any such lawsuit, dispute, claim or other proceeding except in the Circuit Court of Cook County, Illinois. The parties hereby irrevocably and unconditionally waive any objection to the laying of venue of any lawsuit, dispute, claim or other proceeding arising out of or relating to this Purchase Agreement, or the relationships that result from this Purchase Agreement, in the Circuit Court of Cook County, Illinois, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in the Circuit Court of Cook County, Illinois that any such lawsuit, dispute, claim or proceeding brought in the Circuit Court of Cook County, Illinois has been brought in an inconvenient forum.

(Id.) On the strength of this forum-selection clause, Oasis moves to dismiss Plaintiffs' FAC in its entirety.

In Atlantic Marine Constr. Co. v. U.S. Dist. Ct. for Western Dist. of Tex., --- U.S. ---, 134 S. Ct. 568 (2013), the Supreme Court held that a forum-selection clause could not be enforced by a motion to dismiss under 28 U.S.C. § 1406(a)or Federal Rule of Civil Procedure 12(b)(3), but instead through a motion to transfer venue under 28 U.S.C. § 1404(a). Id. at 578-80. However, this is only applicable to forum-selection clauses that opt for another federal venue. See 28 U.S.C. § 1404(a) ("For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought . . . ."). The Supreme Court briefly discussed the proper basis to enforce a valid forum-selection clause that chooses a nonfederal venue and stated that it could be enforced under the doctrine of forum non conveniens. Atlantic Marine, 134 S. Ct. at 580. The Court, however, did not rule out the possibility of using Rule 12(b)(6) as an enforcement mechanism. Id.

No matter the procedural mechanism employed to enforce a valid forum-selection clause, the inquiry presupposes a valid forum-selection clause in the first instance. In this case, Plaintiffs urge that the subject forum-selection clause is not valid. The validity of a forum-selection clause is determined by applying the test articulated in M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), cited in Kostelac v. Allianz Global Corp. & Specialty AG, 517 F. App'x 670, 674-75 (11^thCir. 2013).⁴

The Bremen analysis starts with the proposition that a mandatory forum-selection clause is prima facie valid unless it can be shown to be unreasonable under the circumstances of the case. 407 U.S. at 10. Pertinent here, the Bremen Court held that a forum-selection clause will be enforced unless enforcement would "contravene a strong public policy of the forum in which suit is brought." Id. at 15; see also Kostelac, 517 F. App'x at 675; Lipcon v. Underwriters at Lloyd's, London, 148 F.3d 1285, 1290 (11^th Cir. 1998).

Plaintiffs assert that the forum-selection clause contravenes public policy as stated in the Payday Lending Act. More specifically, in enacting the PLA, the General Assembly of Georgia made the following legislative finding: "Certain payday lenders have attempted to use forum selection clauses contained in payday loan documents in order to avoid the courts of the State of Georgia, and the General Assembly has determined that such practices are unconscionable and should be prohibited." O.C.G.A. § 16-17-1(d) (emphasis added). Clearly, the enforcement of forum-selections clauses in payday lending contracts would contravene the public policy of the State of Georgia.

In response, Oasis seeks to save the use of forum-selection clauses in its contracts by pointing to the following provision in the PLA:

A payday lender shall not include in any loan contract made with a resident of this state any provision by which the laws of the state other than Georgia shall govern the terms and enforcement of the contract, nor shall the loan contract designate a court for the resolution of disputes concerning the contract other than a court of competent jurisdiction in and for the county in which the borrower resides or the loan office is located.

O.C.G.A. § 16-17-2(c)(1) (emphasis added). Oasis contends its forum-selection clauses are enforceable because its loan office is located in its chosen forum: Cook County, Illinois. This is a venue provision, however, that dictates the "county"in which a suit may be brought in contemplation that a PLA claim will be brought only within the State of Georgia given the unequivocal pronouncement against out-of-state forum-selection clauses. In other words, this venue provision does not revive an invalid out-of-state forum-selection clause because it chooses a forum where an office of the lender is located. Simply put, forum-selection clauses in payday lending contracts contravene an expressly stated public policy against their use; thus, the forum-selection clauses in this case are invalid and will not be...