Williams v. Big Picture Loans, LLC, 3:17-cv-00461

Plaintiffs moved to certify a class against defendant Matt Martorello; Martorello objected, asserting loan contracts contain a class-action waiver that bars class representatives.
Loans were made by tribal lenders (Red Rock, later Big Picture) under a "rent-a-tribe" structure; plaintiffs allege loans were high-interest and proceeds flowed to Martorello through affiliated entities.
The sample loan agreement’s "Waiver of Jury Trial" provision (misleadingly titled) designates the Tribe's Tribal Dispute Resolution Procedure as the sole dispute forum, consents to tribal jurisdiction, waives jury trial and class-representative rights, and states NO LITIGATION OR ARBITRATION IS AVAILABLE.
Martorello is not a signatory; he argued he is a "related third party" (an affiliated entity or agent) and thus can enforce the waiver against plaintiffs.
The court held the waiver does not apply to Martorello because the contract’s definition of related third parties refers to the lender’s own agents/affiliates (corporate entities), and there is no record showing Martorello was an agent of the lenders.
The court also held, alternatively, that even if the waiver applied it would be unenforceable under the prospective-waiver doctrine because the contract and tribal dispute resolution framework functionally prevent vindication of federal statutory rights.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the loan agreement's class-action waiver binds Martorello (a nonparty)	Waiver does not bind Martorello; only parties or designated third-party beneficiaries are bound	Waiver applies because plaintiffs' claims arise under the agreement and Martorello is a "related third party"	Waiver does not apply to Martorello; privity and contract definition limit enforcement to lender's agents/affiliates
Whether Martorello is a "related third party" ("affiliated entity" or "agent") under the contract	Martorello is not an affiliated entity or an agent of the lenders	Martorello and his companies provided consulting/servicing and thus qualify as affiliates/agents (relying on servicing agreement)	Martorello is not an "affiliated entity" (term denotes corporate entity) and no record shows he was an agent of Red Rock or Big Picture; late arguments fail
If the waiver applied, whether it is enforceable	Waiver is unenforceable under the prospective-waiver doctrine because the tribal forum and contract language foreclose meaningful vindication of federal statutory rights	Waiver and tribal forum clauses are valid and govern dispute resolution	Even if applicable, the waiver is unenforceable: the tribal dispute system and contract terms functionally bar enforcement of federal rights and violate prospective-waiver principles

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (recognizes prospective-waiver concern when contracts strip federal statutory remedies)
Am. Express Co. v. Italian Colors Rest., 570 U.S. 228 (2013) (comments that courts will not enforce prospective waivers of federal statutory relief)
Hayes v. Delbert Servs. Corp., 811 F.3d 666 (4th Cir. 2016) (arbitration clause unenforceable where it purports to renounce application of federal law)
Dillon v. BMO Harris Bank, N.A., 856 F.3d 330 (4th Cir. 2017) (choice-of-law terms that disavow application of federal law render delegation/enforcement provisions invalid)
Gibbs v. Haynes Invs., LLC, 967 F.3d 332 (4th Cir. 2020) (tribal loan contract and forum provisions can prevent vindication of federal RICO claims; prospective waiver)
Gibbs v. Sequoia Capital Operations, LLC, 966 F.3d 286 (4th Cir. 2020) (choice-of-law/delegation provisions that stymie federal claims amount to prospective waiver)
Amato v. City of Richmond, 875 F. Supp. 1124 (E.D. Va. 1994) (district court may articulate alternative grounds for decision)