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Davis v. Oasis Legal Finance Operating Company, LLC

United States District Court, S.D. Georgia, Dublin Division

November 15, 2017

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.

          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) the Purchase 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-Puqh v. Ramsey, 312 F.3d 1222, 1225 (11th 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 reasonable inference 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 (11th 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 Offshore Co., 407 U.S. 1 (1972), cited in Kostelac v. Allianz Global Corp. & Specialty AG, 517 Fed.Appx. 670, 674-75 (11th Cir. 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, ...


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