United States District Court, E.D. Pennsylvania
COMMONWEALTH OF PENNSYLVANIA by Attorney General JOSH SHAPIRO, Plaintiff,
THINK FINANCE, INC., TC LOAN SERVICE, LLC, TAILWIND MARKETING, LLC, TC DECISION SCIENCES, LLC, FINANCIAL U, LLC, KENNETH E. REES, VICTORY PARK CAPITAL ADVISORS, LLC, VICTORY MANAGEMENT, LLC, GPL SERVICING, LTD., GPL SERVICING AGENT, LLC, GPL SERVICING TRUST, GPL SERVICING TRUST II, VPC/TF TRUST I, VICTORY PARK CREDIT OPPORTUNITIES MASTER FUND, LTD., and NATIONAL CREDIT ADJUSTERS, LLC, Defendants.
this Court are Plaintiff's Motion for Partial Summary
Judgment and the summary judgment motions of Defendants
Kenneth Rees (“Rees”) and National Credit
Adjusters, LLC (“NCA”). For the reasons set forth
in this Memorandum, we deny all Motions for Summary Judgment
as to all applicable Counts.
FACTUAL AND PROCEDURAL HISTORY
action addresses high-interest rate, short-term loans made to
Pennsylvania residents over the Internet. The Plaintiff, the
Office of the Attorney General (“OAG”), alleges
that Defendant Rees - the CEO, chairman, and president of
Defendant Think Finance, Inc. (“Think
Finance”) - and Defendant NCA violated laws
prohibiting usurious and otherwise illegal lending practices.
alleges that the Defendants orchestrated a scheme to offer
and collect on loans to Pennsylvania consumers at illegally
high interest rates. Specifically, Plaintiff alleges that
Defendants coordinated with Native American tribes, who are
generally not subject to state limits on interest rates, to
serve as the front of the lending scheme, while Defendants
operated the loan mechanism. These loans allegedly violated
Pennsylvania's Loan Interest and Protection Law 41 P.S.
§ 201(a), which limits to six-percent interest rates on
unsecured loans under $50, 000 offered by unlicensed lenders.
§ 201(a). The loans at issue have an average interest
rate of 250-390%. See Rees' Response to
Plaintiff's Sealed Statement of Undisputed Facts in
Support of Plaintiff's Motion for Partial Summary
Plaintiff's Second Amended Complaint (“SAC”),
Plaintiff alleges that Defendant Rees violated
Pennsylvania's Corrupt Organizations Act
(“COA”) 18 Pa. C.S.A. §§ 911(b)(1),
(3), and (4); the Unfair Trade Practices and Consumer
Protection Law (“UTPCPL”) 73 P.S. s§§
201-1 et seq.; the Fair Credit Extension Uniformity
Act (“FCEUA”) 73 P.S. §§ 2270.1 et
seq.; various provisions of the federal Dodd-Frank Act;
and related laws. Additionally, Plaintiff alleges that
Defendant NCA violated the COA § 911(b)(4); the FCEUA
§§ 2270.1 et seq.; and related
Defendant Rees and regarding the tribal period only,
Plaintiff moves for summary judgment on Count Two (COA §
911(b)(3)); Count Three (COA § 911(b)(4)); and Count
Five (UTPCPL § 201-1 et. seq.) of the SAC. Doc.
No. 225. As to Defendant NCA, Plaintiff moves for summary
judgment on Count Three and Count Four. Doc. No. 225.
Defendant Rees moves for summary judgment in his favor on all
Counts. Doc. No. 257. Defendant NCA moves for summary
judgment in its favor on Counts Three and Four. Doc. No. 256.
reasons described below, we deny all summary judgment
obtain summary judgment, a movant must show “that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). Disputes about “material”
facts are those that “might affect the outcome of the
suit under the governing law.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). A
“genuine” dispute exists if the non-movant
establishes evidence “such that a reasonable jury could
return a verdict” in their favor. Id.
the defendant is the moving party, the burden is on the
defendant to show that the plaintiff has failed to establish
one or more essential elements of her case.” Brown
v. Aria Health, 2019 U.S. Dist. LEXIS 66266, at *9-10
(E.D. Pa. Apr. 17, 2019) (quoting Burton v. Teleflex
Inc., 707 F.3d 417, 425 (3d Cir. 2013)) (internal
quotations omitted). Once the movant meets its initial
burden, the nonmoving party must then “go beyond the
pleadings and come forward with specific facts showing that
there is a genuine issue for trial.” Santini v.
Fuentes, 795 F.3d 410, 416 (3d Cir. 2015) (quoting
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986)) (internal citations omitted) (emphasis
court must review the record ‘taken as a
whole.'” Reeves v. Sanderson Plumbing
Prods., 530 U.S. 133, 150 (2000) (quoting
Matsushita, 475 U.S. at 587)). At summary judgment, we
must view the evidence and draw all inferences “in the
light most favorable to the party opposing the motion.”
Matsushita, 475 U.S. at 587 (quoting United
States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).
See also Horsehead Indus., Inc. v. Paramount
Commc'ns, Inc., 258 F.3d 132, 140 (3d Cir. 2001).
the non-movant must show more than “[t]he mere
existence of a scintilla of evidence in support of . . . [the
non-movants] position” to defeat a motion for summary
judgment. Anderson, 477 U.S. at 252. To survive
summary judgment, the specific facts set forth by the
non-movant must require resolution “only by a finder of
fact because they may reasonably be resolved in favor of
either party.” Id. at 250. The non-movant
“may not rest upon the mere allegations or denials of
the . . . pleading; its response . . . must set forth
specific facts showing that there is a genuine issue for
trial.” Saldana v. Kmart Corp., 260 F.3d 228,
232 (3d Cir. 2001) (internal quotation marks omitted).
One - COA 18 Pa. C.S.A. § 911(b)(1) Against Defendant
911(b)(1) of the COA provides that it is illegal “for
any person who has received any income derived, directly or
indirectly, from a pattern of racketeering activity in which
such person participated as a principal, to use or invest,
directly or indirectly, any part of such income, or the
proceeds of such income, in the acquisition of any interest
in, or the establishment or operation of, any enterprise . .
. .” § 911(b)(1). As we explained in Think
Fin. II, 2018 WL 637656, a defendant must be a
“principal” in order to be liable under Section
911(b)(1). Id. at *8.
COA, Section 911, is analogous to the federal Racketeering
Influenced and Corrupt Organizations (“RICO”) Act
18 U.S.C. §§ 1961-1968. Courts interpreting the
Pennsylvania COA often apply RICO precedent. Think Fin.
II, 2018 WL 637656, at *8; Commonwealth v.
Donahue, 630 A.2d 1238, 1245 (Pa. Super Ct. 1993). RICO
precedent is helpful but not controlling for ...