Opinion ID: 794241
Heading Depth: 2
Heading Rank: 4

Heading: Collection of Pre-Act Loans

Text: 34 Three of the Appellants (BankWest, Express Check, and Creditcorp) argue that the appeal is not moot because they already own or may purchase loans that were made before the effective date of the Act, which they have not collected. They say that they are afraid to collect those loans because of the threat that the Act's sanctions will be applied to them. They contend that the Act cannot be validly applied to those loans, and therefore, the State should be enjoined from attempting to apply it to them. 35 More specifically, BankWest states that it had loans outstanding of over $8,100,000 representing funds advanced on Small Excess Rate Loans prior to the effective date of the Act that it stopped collecting due to the risk of violating the Act. BankWest Response to Suggestion of Mootness at 3, 5. BankWest asserts that if the Act were deemed to be preempted, it would evaluate whether to resume collection activities or sell its portfolio, taking into account the relevant costs and benefits. Id. at 5. 2 36 One servicer, Express Check, asserts that in April 2004, it acquired all of County Bank's uncollected pre-Act loans, worth approximately $385,232, and that it ceased collecting those loans as of the effective date of the Act. Additionally, Creditcorp, another servicer, states that it intends to collect loans currently outstanding to [FBD] ... if the Georgia law is preempted, although Creditcorp concedes that it has not purchased any of the loans made by FBD and is only informed that FBD would need Creditcorp to collect those loans in Georgia if and when the Georgia law was overturned. Decl. of Creditcorp President Steve Scoggins at 2 (Scoggins Decl.). 37 The insurmountable hurdle for Appellants is that these uncollected loans, by Appellants' own admission, were made prior to the effective date of the Act, and in this case, the State has never suggested that the Act applies retroactively to loans made before the effective date of the Act. Indeed, the State conceded in the district court that the Act does not apply to pre-Act loans, the district court agreed, BankWest, 324 F.Supp.2d at 1356, and no party has suggested in its appellate briefs that the Act does apply to pre-enactment loans. 38 Therefore, although some Appellants own or may purchase uncollected pre-Act loans, there is no case or controversy as to those loans. See Graham v. Butterworth, 5 F.3d 496, 500 (11th Cir.1993) (where Florida Attorney General and local state attorney had repeatedly stated that the statute does not prohibit the appellants' proposed conduct ... [,] the appellees [could not] enforce [the] statute against the appellants, and the case was render[ed]... moot); see also Christian Coal. of Ala. v. Cole, 355 F.3d 1288, 1293 (11th Cir.2004) (case was moot where the supposed `enforcement policy' of a regulatory body was evidenced only by a withdrawn advisory opinion and the plaintiffs could be reasonably certain that charges would never be filed under the enforcement policy). Indeed, Appellants make no allegation that the State or anyone else has threatened to prosecute them under the Act for their pre-Act loans. 39 Furthermore, even without the Georgia Attorney General's explicit concession, there would be no credible or objectively reasonable threat of future enforcement of the Act against these pre-Act loans. Cf. Doe v. Pryor, 344 F.3d 1282, 1287-88 (11th Cir.2003) (plaintiffs lacked standing to challenge a statutory provision where there was no credible threat of their being prosecuted under it after the state attorney general had stated that it could not be constitutionally applied to them and where fear of prosecution was not objectively reasonable). Georgia law is clear that the Act does not apply to these pre-Act loans. The Georgia Supreme Court has held that a statute applies only prospectively unless the statute itself expressly states otherwise. See Polito v. Holland, 258 Ga. 54, 55, 365 S.E.2d 273, 273 (1988) (substantive statutes prescribe for the future and that is the construction to be given unless there is a clear contrary intention shown). The Act contains no statement that it applies retroactively, and thus, under Georgia law, it applies only prospectively. Furthermore, the Georgia Code itself provides that [l]aws prescribe only for the future; they cannot impair the obligation of contracts nor, ordinarily, have a retrospective operation. Ga.Code Ann. § 1-3-5 (emphasis added). Thus, because prosecution under the Act as to pre-Act loans clearly would be contrary to Georgia law, as well as to the clear and unequivocal position of the Georgia Attorney General, this appeal is moot in spite of the existence of the pre-Act loans. 40 There never was any controversy in this appeal about whether the Act can be applied to the uncollected loans that were made before the Act's effective date. Although, as we will explain later, mootness requires that we vacate the district court's order, the district court in this case concluded, as we do, that [u]nder Georgia law, a statute is presumed to apply only prospectively unless it expressly states otherwise. BankWest, 324 F.Supp.2d at 1356. On that basis, the district court rejected the Appellants' claims that the Georgia statute was an unconstitutional ex post facto law insofar as the de facto lender provisions criminalize loans that were legally made before the effective date of the Act. Id. That ruling — that the Act did not apply to loans made prior to the effective date of the Act — was not contested on appeal by any party. This is yet another indication that there is no credible or objectively reasonable threat of prosecution under the Act against Appellants with regard to their pre-Act loans. 41 Accordingly, we reject Appellants' argument that this appeal is not moot due to uncollected, pre-Act loans.