Hengle v. Treppa

19 F.4th 324

George HENGLE; Sherry Blackburn; Willie Rose; Elwood Bumbray; Tiffani Myers ; Steven Pike ; Sue Collins ; Lawrence Mwethuku, on behalf of themselves and all individuals similarly situated, Plaintiffs – Appellees,

v.Sherry TREPPA, Chairperson of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Tracey Treppa, Vice-Chairperson of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Kathleen Treppa, Treasurer of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Carol Munoz, Secretary of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Jennifer Burnett, Member-At-Large of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Aimee Jackson-Penn, Member-At-Large of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Veronica Krohn, Member-At-Large of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity, Defendants – Appellants,andScott Asner; Joshua Landy, Defendants.

State of New Mexico ; Habematolel Pomo of Upper Lake Consumer Financial Services Regulatory Commission; Native American Finance Officers Association ; National Congress of American Indians; National Center For American Indian Economic Development; National Indian Gaming Association; Association on American Indian Affairs, Amici Supporting Appellants,

v.United States of America, Amicus Supporting Affirmance.

George Hengle; Sherry Blackburn; Willie Rose; Elwood Bumbray; Tiffani Myers ; Steven Pike ; Sue Collins ; Lawrence Mwethuku, on behalf of themselves and all individuals similarly situated, Plaintiffs – Appellees,

v.Scott Asner; Joshua Landy, Defendants – Appellants,andSherry Treppa, Chairperson of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Tracey Treppa, Vice-Chairperson of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Kathleen Treppa, Treasurer of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Carol Munoz, Secretary of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Jennifer Burnett, Member-At-Large of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Aimee Jackson-Penn, Member-At-Large of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Veronica Krohn, Member-At-Large of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity, Defendants.

State of New Mexico ; Habematolel Pomo of Upper Lake Consumer Financial Services Regulatory Commission; Native American Finance Officers Association ; National Congress of American Indians; National Center For American Indian Economic Development; National Indian Gaming Association; Association on American Indian Affairs, Amici Supporting Appellants,

v.United States of America, Amicus Supporting Affirmance.

George Hengle; Sherry Blackburn; Willie Rose; Elwood Bumbray; Tiffani Myers ; Steven Pike ; Sue Collins ; Lawrence Mwethuku, on behalf of themselves and all individuals similarly situated, Plaintiffs – Appellees,

v.Scott Asner; Joshua Landy, Defendants – Appellants,andSherry Treppa, Chairperson of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Tracey Treppa, Vice-Chairperson of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Kathleen Treppa, Treasurer of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Carol Munoz, Secretary of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Jennifer Burnett, Member-At-Large of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Aimee Jackson-Penn, Member-At-Large of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Veronica Krohn, Member-At-Large of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity, Defendants.

State of New Mexico ; Habematolel Pomo of Upper Lake Consumer Financial Services Regulatory Commission; Native American Finance Officers Association ; National Congress of American Indians; National Center For American Indian Economic Development; National Indian Gaming Association; Association on American Indian Affairs, Amici Supporting Appellants,

v.United States of America, Amicus Supporting Affirmance.

George Hengle; Sherry Blackburn; Willie Rose; Elwood Bumbray; Tiffani Myers ; Steven Pike ; Sue Collins ; Lawrence Mwethuku, on behalf of themselves and all individuals similarly situated, Plaintiffs – Appellees,

v.Sherry Treppa, Chairperson of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Tracey Treppa, Vice-Chairperson of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Kathleen Treppa, Treasurer of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Carol Munoz, Secretary of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Jennifer Burnett, Member-At-Large of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Aimee Jackson-Penn, Member-At-Large of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity; Veronica Krohn, Member-At-Large of the Habematolel Pomo of Upper Lake Executive Council, in her official capacity, Defendants – Appellants,andScott Asner; Joshua Landy, Defendants.

State of New Mexico ; Habematolel Pomo of Upper Lake Consumer Financial Services Regulatory Commission; Native American Finance Officers Association ; National Congress of American Indians; National Center For American Indian Economic Development; National Indian Gaming Association; Association on American Indian Affairs, Amici Supporting Appellants,

v.United States of America, Amicus Supporting Affirmance.

No. 20-1062

No. 20-1063

No. 20-1358

No. 20-1359

United States Court of Appeals, Fourth Circuit.

Argued: January 26, 2021

Decided: November 16, 2021

ARGUED: Rakesh N. Kilaru, WILKINSON STEKLOFF LLP, Washington, D.C.; Matthew E. Price, JENNER & BLOCK, LLP, Washington, D.C., for Appellants. Matthew W. H. Wessler, GUPTA WESSLER PLLC, Washington, D.C., for Appellees. ON BRIEF: James Rosenthal, Kosta Stojilkovic, Beth Wilkinson, Matthew Skanchy, Betsy Henthorne, Jaclyn Delligatti, WILKINSON STEKLOFF LLP, Washington, D.C., for Appellants. Leonard Anthony Bennett, CONSUMER LITIGATION ASSOCIATES, P.C., Newport News, Virginia; Kristi Cahoon Kelly, Andrew J. Guzzo, Casey Shannon Nash, KELLY GUZZO PLC, Fairfax, Virginia, for Appellees. Brian C. Rabbitt, Acting Assistant Attorney General, Teresa A. Wallbaum, Assistant Chief, Organized Crime and Gang Section, Criminal Division, Jeffrey Bossert Clark, Assistant Attorney General, Eric Grant, Deputy Assistant Attorney General, Brian C. Toth, Environment and Natural Resources Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Amicus United States of America. Hector Balderas, Attorney General, Tania Maestas, Chief Deputy Attorney General, OFFICE OF THE ATTORNEY GENERAL OF NEW MEXICO, Santa Fe, New Mexico; William H. Hurd, TROUTMAN SANDERS LLP, Richmond, Virginia, for Amicus State of New Mexico. Bruce A. Finzen, Minneapolis, Minnesota, Brendan V. Johnson, Timothy W. Billion, ROBINS KAPLAN LLP, Sioux Falls, South Dakota; Sarah J. Auchterlonie, BROWNSTEIN HYATT FARBER SCHRECK LLP, Denver, Colorado, for Amicus Habematolel Pomo of Upper Lake Consumer Financial Services Regulatory Commission. Jonodev Chaudhuri, Washington, D.C., E. King Poor, Chicago, Illinois, Nicole Simmons, QUARLES & BRADY LLP, Phoenix, Arizona, for Amici The Native American Finance Officers Association, National Congress of American Indians, National Center for American Indian Economic Development, National Indian Gaming Association, and Association on American Indian Affairs.

Before NIEMEYER, KING, AND RUSHING, Circuit Judges.

Affirmed by published opinion. Judge Rushing wrote the opinion, in which Judge Niemeyer and Judge King joined.

RUSHING, Circuit Judge:

The named plaintiffs in this case, all Virginia consumers, received short-term loans from online lenders affiliated with a federally recognized Native American tribe. Eventually the borrowers defaulted and brought a putative class action against tribal officials and two non-members affiliated with the tribal lenders to avoid repaying their debts, which they alleged violated Virginia and federal law. The defendants moved to compel arbitration under the terms of the loan agreements and to dismiss the complaint on various grounds.

The district court denied the motions to compel arbitration and, with one significant exception relevant here, denied the motions to dismiss. Four of those rulings are now before us in this interlocutory appeal. First, the district court found the arbitration provision unenforceable as a prospective waiver of the borrowers’ federal rights. Second, the district court denied the tribal officials’ motion to dismiss the claims against them on the ground of tribal sovereign immunity. Third, the district court held the loan agreements’ choice of tribal law unenforceable as a violation of Virginia's strong public policy against unregulated lending of usurious loans. Fourth, the district court dismissed the federal claim against the tribal officials, ruling that the Racketeer Influenced and Corrupt Organizations Act (RICO) does not authorize private plaintiffs to sue for injunctive relief. For the reasons explained below, we affirm all four rulings on appeal.

I.

The Habematolel Pomo of Upper Lake (the Tribe) is a federally recognized Native American tribe in northern California. Through its Tribal Executive Council, the Tribe started an online lending business consisting of four incorporated lending portfolios: Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and ...