Pennsylvania Record

Thursday, November 14, 2019

Delaware lender's lawsuit against AG Shapiro transferred to Pennsylvania

Attorneys & Judges

By Charmaine Little | Oct 15, 2019


HARRISBURG - A lawsuit against Pennsylvania Attorney General Josh Shapiro filed by a Delaware company that provides financing for vehicle titles is headed to Pennsylvania federal court after his motion to dismiss was only partially granted Sept. 3.

U.S. District Judge Maryellen Noreika of the U.S. District Court for the District of Delaware ruled on the case. Auto Equity, which is primarily based in Delaware and has no offices in Pennsylvania, asked for the judge's help after Shapiro's office ordered documents from Auto Equity’s operations after a Pennsylvania resident complained of Auto Equity’s interest rates.

Shapiro filed the motion to dismiss, or to transfer the case, questioning the Delaware court’s personal jurisdiction over him. He also wanted the case to get dismissed, stating it isn’t ripe. 

And if the court does have jurisdiction, Shapiro requested it to be transferred to the U.S. District Court for the Middle District of Pennsylvania.

The court first determined it does have subject matter jurisdiction in the case as it transferred the case to Shapiro’s desired venue, noting “the convenience of the parties weighs in favor of transfer,” according to the lawsuit.

The court pointed out that the adversity requirement is met as the defendant suggested that his interests are adverse to Auto Equity’s. But the court did agree with Auto Equity that the lawsuit “raises predominantly legal questions that this court can answer decisively without the need for much, if any, further factual development,” said the court.

Considering this, the motion to dismiss for lack of personal and subject matter jurisdiction was denied, an the court transferred the case to the U.S. District Court for the Middle District of Pennsylvania.

Auto Equity sued after Shapiro”s office reached out to it stating that the AG received a complaint from a Pennsylvania resident on the interest rate for the loan agreement. 

Shapiro said Pennsylvania’s limits on interest rates are enforced for a vehicle title loan given to a Pennsylvania resident (even if the lender isn’t in Pennsylvania). 

Auto Equity then requested the court grant it declaratory and injunctive relief, stating that the Commerce Clause prevents the defendant “’from applying, or attempting to apply’ Pennsylvania law “to entities, like [Plaintiff] that operate ‘wholly outside’ of Pennsylvania,” according to the decision.

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