Outcome: Over $8 Million Settlement and Injunctive Relief
In a unique legal battle, plaintiffs gained some compensation and injunctive relief from a tribal lending organization in a class action lawsuit alleging serious violations of federal and state laws. The case hinged on accusations that the lender had breached the Racketeer Influenced and Corrupt Organizations Act (RICO) and engaged in usurious practices forbidden under various state laws.
Case Background
The class action comprised of consumers across the United States who had entered into loan agreements with the defendant, a tribal lender. Plaintiffs claimed that the loans incurred from this lender involved exorbitant interest rates and terms that were not only unfair but also illegal.
Throughout the proceedings, the defense made several attempts to dismiss the claims. Nonetheless, the plaintiffs’ pursuit of justice remained undeterred, even as the case ascended to the Fourth Circuit Court of Appeals. Ultimately, their resilience brought the parties to the mediation table, where they hashed out the terms of a settlement. Tycko & Zavareei LLP was part of the legal team appointed as class counsel.
Settlement Outcome
The perseverance of the plaintiffs and their counsel paid off when the parties agreed to create a substantial $8,700,000 settlement fund. Eligible claimants who could request compensation from the fund were defined as those who had repaid their loans in full and contributed payments exceeding 2.5 times the original principal amount over the loan’s lifespan.
Furthermore, a piece of the settlement provided significant injunctive relief. The tribal lender consented to limit future loan collections to no greater than 2.5 times the loan’s original principal and committed to charging off loans that had been in default for a period exceeding 210 days, in addition to halting all related collection activities.