UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

DEBORAH JACKSON, et al., )

)

Plaintiff-Appellants, )

)

vs. ) 11 C 9288

)

PAYDAY FINANCIAL, LLC, et al., )

)

Defendant-Appellees. )

DISTRICT COURT’S RESPONSE TO COURT OF

APPEALS REMAND FOR FINDINGS OF FACT 

The United States Court of Appeals has remanded two questions to this Court

while still retaining jurisdiction of the case. This Court has been asked to make

findings of fact as to the following:

1. Whether the Cheyenne River Sioux Tribe has applicable tribal law

readily available to the public and, if so, under what conditions;

and

2. Whether the Cheyenne River Sioux Tribe has an authorized

arbitration mechanism available to the parties and whether the

arbitrator and method of arbitration required under the contract is

actually available.

The parties were asked to submit their own responses to these questions with any

documentary exhibits or attachments they desired to accompany their responsive legal

briefs. Each party was content to rely on its submissions without the conduct of

additional discovery or presentation of testimony. It is on that record that this Court

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has prepared the requested findings offact. The parties’submissions shall accompany

the Court’s findings of fact.

As to the question of whether there is applicable tribal law readily available to

the public, the parties’ submissions differ. After a number of failed attempts, the

Plaintiffs acknowledged having obtained a copy of the tribe’s 1978 Law and Order

Code at a cost of $125 from the National Indian Law Library. Defense counsel avers

that a copy ofthe Cheyenne River Sioux Tribal Code wasrequested by telephone from

the National Indian Law Library and received without any payment required, along

with PDF copies of Tribal Resolutions and Ordinances enacted between 1981 and

2000, including the Tribe’s Commercial Code.

It is this Court’s finding that the answer to the first of the remanded questions

is in the affirmative. Each party was able to secure a copy of the Tribal Law, although

the Plaintiff’s did so less readily. Nevertheless, we believe the law can be acquired by

reasonable means.

The second of the remanded questions requires consideration of multifaceted

aspects of the concept of arbitration and its mechanisms, and its actual availability to

the parties before the Court.

Claims relating to Defendants’ loans have been the subject of only one

arbitration proceeding which is currently pending. That arbitration is the subject ofthe

case entitled Inetianbor v. Cash Call, Inc. No. 13 CV 60066 (S.D. Fla. 2013). The

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procedural history of that case and relevant associated materials are included in the

Plaintiff’ssubmissions. That lawsuit involved a loan of $2,525 for three years with the

total payments due under the contract of $11,024.82. As the contract states, the cost

of the credit at a yearly rate was 139.31%. By anybody’s definition, this is a usurious

rate of interest.

The arbitratorselected in the Inetianbor casewasRobertChasingHawk, a Tribal

Elder. He was personally selected by Martin Webb, the man who owns and operates

the Webb entities which are run as a common enterprise. Mr. Webb is himself a

member of the Tribe. Although denying any preexisting relationship with either party

in the case, Robert Chasing Hawk is the father of Shannon Chasing Hawk. Robert

Chasing Hawk has acknowledged that his daughter worked for one of the companies

run by Martin Webb.

Mr. Chasing Hawk is not an attorney and has not been admitted to the practice

of law either in South Dakota or the court of the Cheyenne River Sioux Tribal Nation. 

He has not had any training as an arbitrator and the sole basis of his selection was

because he was a Tribal Elder.

Black’s Law Dictionary, DeLuxe Fourth Edition, defines “arbitrator” as “a

private, disinterested person, chosen by the parties to a disputed question, for the

purpose of hearing their contention, and giving judgment between them; to whose

decision (award) the litigants submit themselves either voluntarily, or, in some cases,

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compulsorily by order of a court.” Freedom from bias and prejudice is a stated criteria

of the American Arbitration Association’s Criteria to serve as an arbitrator. Similar is

JAM’s Arbitrators Ethics Guidelines which requires freedom from any appearance of

a conflict of interest. Illinois Supreme Court Rule 62 states, in part, that “a judge

should respect and comply with the law and should conduct himself or herself at all

time in a manner that promotes public confidence in the integrity and impartiality of

the judiciary. A judge should not allowthe judge’sfamily, social or otherrelationships

to influence the judge’s judicial conduct or judgment.” It should be no less for an

arbitrator.

The selection of Robert Chasing Hawk as the arbitrator in the only comparable

case is instructive. No arbitration award could ever stand in the instant case if an

arbitrator was similarly selected, nor could it satisfy the concept of a “method of

arbitration” available to both parties. The selection ofChasing Hawk in the Inetianbor

case was a purely subjective selection by only one of the parties to the arbitration. The

process was not “methodized” in any reasonable sense ofthe word. Webb and Chasing

Hawk are members of the same tribe. The Plaintiffs are not. The employment by

Webb of the arbitrator’s daughter cannot be ignored. The conduct permitted by the

arbitration provisions in this case could never satisfy the straightforward definition in

Black’s Law Dictionary.

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Equally telling about Payday Financial LLC, Cash Call, Inc., and the Webb

Entities operations is the State of New Hampshire Banking Department’s Cease and

Desist Order. The Department first conducted a routine examination of Cash Call. 

This wasfollowed by the issuance of an administrative subpoena ducestecum to Cash

Call seeking a variety of documents related to Cash Call’s relationship with Western

Sky. Cash Call complied and produced the requested documents.

Among other findings made by the Department, it determined that the

respondents were engaged in a business scheme and took substantial steps to conceal

the business scheme from consumers and state and federal regulators. The findings

included the fact that Western Sky was nothing more than a front to enable Cash Call

to evade licensure by state agencies and to exploit Indian Tribal Sovereign Immunity

to shield its deceptive practices from prosecution by state and federal regulators. The

Department found a reasonable basis to believe the business scheme described

constituted an unfair or deceptive act or practice used as a shield to evade licensure

from the Department by exploiting Indian Tribal Sovereign Immunity.

While this Court recognizes that no trial has been held to permit a full exposition

of all relevant facts, each party was afforded the opportunity to present whatever

evidence it wished. It is abundantly clear that, on the present record, the answer to the

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second question is a resounding no. Other than this Court’s disagreement with

Plaintiffs’ position asto the availability oftribal law, pages 8 through 10 of “Plaintiffs’

Statement of Relevant Facts, and On Further Discovery Required on Limited Remand

by Court of Appeals” fairly describe what the facts show. The scheme described in the

New Hampshire Banking Department’s Cease and Desist Order has been apparently

devised for the purpose of evading federal and state regulation of Defendants’

activities. The intrusion of the Cheyenne River Sioux Tribal Nation into the

contractual arbitration provision appears to be merely an attempt to escape otherwise

applicable limits on interest charges. As such, the promise of a meaningful and fairly

conducted arbitration is a sham and an illusion.

We respectfully submit our responses to the questions posed.

 

Charles P. Kocoras

United States District Judge

Dated: August 28, 2013 

 

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