Jackson v. PayDay Financial, LLC

Dist. Ct. erred in granting defendants’ motion to dismiss plaintiffs’ lawsuit, alleging that certain loans promulgated by defendants that had yearly interest rates of 139 percent violated various Illinois civil and criminal statutes, where dismissal was based on venue clause contained in loan agreements that called for parties to submit disputes to arbitration conducted by Cheyenne River Sioux Tribe that were to take place on Cheyenne River Sioux Tribe Reservation located in South Dakota. Instant action should not have been dismissed where arbitral mechanism specified in loan agreement was sham/illusory, since Tribe had not set procedures for selection of arbitrators or for conduct of arbitral proceedings. Thus, it would not have been possible for plaintiffs to have ascertained dispute resolution process and rules to which they were agreeing at time of loan agreement. As such, Ct. found that plaintiffs could proceed in federal court where venue clause in loan agreement was substantively and procedurally unconscionable.