Federal judge considering motion to quash in Pa. AG's 'rent-a-bank' lawsuit

By Karen Kidd | Sep 18, 2018

Philadelphia federal court  

PHILADELPHIA — A tribal lender based in Montana and its former CEO don't want to testify in Pennsylvania Attorney General Josh Shapiro's litigation over a lending group's alleged "rent-a-bank" scheme.

A federal judge in Philadelphia is considering a motion to quash filed by Plain Green LLC and its former CEO Joel Rosette, who are not parties in the attorney general's civil action and who claim tribal sovereign immunity in the case.

"Because Plain Green and Rosette have immunity from this action, and that immunity has not been waived by the tribe or abrogated by Congress, this court lacks jurisdiction to enforce subpoenas," said the nine-page motion to quash filed Aug. 21 in U.S. District Court for Pennsylvania's Eastern District.

Plain Green is wholly owned and operated by the Chippewa Cree Tribe of Rocky Boy's Reservation in Montana. The motion to quash claims that Plain Green "has sovereign immunity from judicial process, including third-party subpoenas, unless that immunity is waited by the tribe or abrogated by Congress - neither of which have occurred here."

Pennsylvania Attorney General Josh Shapiro  

The case is assigned to U.S. District Court Judge J. Curtis Joyner

The attorney general claims in his litigation against Victory Park Capital Advisors LLC that the Chicago-based investment firm participated in a scheme with Think Finance Inc. to claim its own protections from state and federal law under the guise of a Native American tribe and federally-chartered bank. Think Finance is based in Fort Worth, Texas.

Other co-defendants in the case are Victory Park Management LLC, GPL Servicing Agent LLC, GPL Servicing LTD, GPL Servicing Trust, GPL Servicing Trust II and VPC/TF Trust I.

In early February, the attorney general announced "a win" in the case when Joyner denied most of a defense motion to dismiss.

"It’s my job to enforce Pennsylvania's consumer protection laws and protect consumers from these kinds of schemes," the attorney general said in his announcement. "They sought to do an end-run around our laws – and we sued to stop them."

The judge in the case also dismissed some of the attorney general's claims earlier this year over jurisdiction issues, saying Shapiro failed to account for all contacts relevant in the litigation.

In June, Think Finance issued subpoenas to Plain Green and Rosette to compel depositions but the motion to quash said the subpoena is beyond the court's jurisdiction.

"It is well-settled that Indian tribes, entities that operate as economic arms of such tribes, and their employees, officers, or agents possess sovereign immunity from judicial process, absent waiver by the tribe or abrogation by Congress," the motion to quash said. "This immunity applies to third-party subpoenas, like the subpoenas at issue in this motion."

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Pennsylvania Office of the Attorney General U.S. District Court for the Eastern District of Pennsylvania

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