Opinion ID: 1782599
Heading Depth: 1
Heading Rank: 2

Heading: The Prior Filed Litigation (The Montgomery County Action)

Text: On August 5, 1998, the Alabama Check Cashers Association and various payday lenders instituted the Montgomery County action, against the State Banking Department and other defendants. In the Montgomery County action, the payday lenders seek a judgment declaring that the Alabama Small Loan Act does not apply to the operations of the payday lenders. The lenders also seek injunctive relief to prevent the Banking Department from requiring the lenders either to obtain a smallloan license or to cease and desist from their operations. On October 9, 1998, after negotiations and mediation, the trial court in the Montgomery County action entered a consent order, which encompassed an agreement of the payday lenders and the Banking Department to a stipulated order for an injunction. In exchange for the lenders' agreement to adhere to the provisions of that order governing deferred-presentment transactions (i.e., payday loans), the Banking Department agreed not to seek to enjoin the lenders' business operations during the pendency of the Montgomery County action. On November 23, 1998, a motion to intervene both as of right and permissively was filed in the Montgomery County action on behalf of a purported class of borrowers who had obtained payday loans from any of the various lenders involved in that action. The motion defined this purported class as a class of borrowers ... who obtained loans or extensions of credit or credit transactions in the forms herein-above described from any Lenders and members of the Lender Defendant Class in Alabama in the six years next preceding the filing of this complaint in intervention. The defendants to the intervenors' claims in the Montgomery County action included Speedee Cash, as well as other payday lenders and the Alabama Check Cashers Association. The intervenors in the Montgomery County action objected to the entry of the consent order and complained of alleged violations of the Alabama Small Loan Act and, in regard to their payday loans, made claims alleging unconscionability, unjust enrichment, and money had and received. On March 1, 1999, the trial court in the Montgomery County action partially granted the intervenors' motion, for the limited purpose of determining the declaration of rights as to the legal issue of the applicability of the Alabama Small Loan Act to [Plaintiffs'] check cashing transactions as outlined in the [Plaintiffs'] complaint, as amended. The trial court further ordered: All other complaints in intervention are otherwise Denied. This order does not preclude the filing of separate suits. Thereafter, the intervenors filed a motion for class certification pursuant to Rule 23(b)(1) and (b)(2), Ala. R. Civ. P. The trial court in the Montgomery County action has not ruled on this motion.