Gingras v. Think Finance, Inc.
922 F.3d 112
| 2d Cir. | 2019Background
- Plaintiffs Gingras and Given (Vermont residents) took multiple high-interest online payday loans from Plain Green, a company held out as owned by the Chippewa Cree Tribe; annual rates ranged ~60%–376%.
- Loan agreements required arbitration under Chippewa Cree tribal law, disclaimed application of state/federal law, gave tribal courts plenary review of arbitral awards, and included short opt-out windows; neither plaintiff opted out.
- Plaintiffs sued in federal court seeking class relief and prospective declaratory and injunctive relief; defendants include tribal officers (sued in their official capacities) and corporate partners that serviced and funded the loans.
- Tribal Defendants moved to dismiss on tribal sovereign immunity grounds; district court denied that motion under an Ex parte Young-analog for prospective relief and allowed RICO-based injunctive claims to proceed.
- All defendants moved to compel arbitration; district court denied those motions as the arbitration clauses were unconscionable and designed to insulate defendants from state/federal law. Appeals followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether tribal sovereign immunity bars official-capacity suits for prospective injunctive relief to stop off-reservation violations of state law | Ex parte Young analogy permits suits against tribal officials to enjoin unlawful off-reservation conduct | Tribal immunity bars these suits; Bay Mills did not authorize official-capacity suits for such relief | Court: Ex parte Young-type suits against tribal officials in their official capacities for prospective injunctive relief are available to vindicate state and substantive federal law violations occurring off reservation (affirmed) |
| Whether RICO authorizes private injunctive relief against the Tribe/tribal officers | RICO authorizes private injunctive remedies and applies to the Tribe here | Tribe argues governmental entities cannot form requisite mens rea or be subject to RICO | Court: RICO permits private injunctive relief and applies here for purposes of Ex parte Young-style claims (claim may proceed) |
| Who decides arbitrability given delegation clauses | Plaintiffs: delegation clause validity is specifically challenged, so court must decide arbitrability first | Defendants: arbitration clause delegates arbitrability to arbitrator | Court: Plaintiffs specifically attacked the delegation provision; arbitrability is for the court to decide (de novo review) |
| Whether arbitration clauses are enforceable under FAA/Vermont law | Plaintiffs: clauses are unconscionable and designed to evade state/federal law; tribal-court review makes arbitration illusory | Defendants: arbitration and tribal-law choice are valid; tribal law may incorporate federal law | Court: Clauses unenforceable and substantively unconscionable (designed to avoid statutory remedies; arbitral forum rendered illusory by exclusive tribal-court review); denial to compel arbitration affirmed |
Key Cases Cited
- Ex parte Young, 209 U.S. 123 (establishing doctrine permitting prospective injunctive suits against state officials to enjoin violations of federal law)
- Michigan v. Bay Mills Indian Community, 572 U.S. 782 (recognizing Ex parte Young-analog suits against tribal officials to remedy off-reservation state-law violations)
- Kiowa Tribe of Oklahoma v. Manufacturing Technologies, 523 U.S. 751 (tribal sovereign immunity extends to off-reservation commercial activities)
- Santa Clara Pueblo v. Martinez, 436 U.S. 49 (tribal sovereign immunity and its contours)
- Mescalero Apache Tribe v. Jones, 411 U.S. 145 (tribes beyond reservation subject to nondiscriminatory state law otherwise applicable)
- Pennhurst State School & Hospital v. Halderman, 465 U.S. 89 (limits on Ex parte Young for enforcing state law against state officials)
- Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (gateway arbitrability can be delegated; court must decide challenges to delegation clause validity)
- American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (arbitration agreements cannot waive federal statutory remedies)
- Garcia v. Akwesasne Housing Authority, 268 F.3d 76 (2d Cir.) (treatment of Ex parte Young analog for tribes; standard of review)
- Chevron Corp. v. Donzinger, 833 F.3d 74 (2d Cir.) (RICO authorizes equitable relief for private plaintiffs)
- Hayes v. Delbert Services Corp., 811 F.3d 666 (4th Cir.) (arbitration clauses channeling disputes to tribal law held unenforceable)
- Jackson v. Payday Financial, LLC, 764 F.3d 765 (7th Cir.) (similar holding on unconscionability of tribal-law arbitration designed to evade state law)