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Scherr v. Western Sky Financial, LLC

United States District Court, N.D. Illinois, Eastern Division

January 6, 2015

BEN SCHERR, Plaintiff,
v.
WESTERN SKY FINANCIAL, LLC, MARTIN A. WEBB, CASHCALL, INC., and DOES 1-20, including individuals and entities doing business as WS Funding LLC and under other names, Defendants

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For Ben Scherr, Plaintiff: Daniel A. Edelman, LEAD ATTORNEY, Cathleen M. Combs, James O. Latturner, Thomas Everett Soule, Edelman, Combs, Latturner & Goodwin, LLC, Chicago, IL.

For Western Sky Financial, LLC, doing business as Western Funding, doing business as Western Sky, doing business as Westernsky.com, Martin A. Webb, also known as Butch, WS Funding LLC, Cashcall Inc, Defendants: Michael Timothy Brody, LEAD ATTORNEY, Barry Levenstam, Daniel Thomas Fenske, Jenner & Block LLP, Chicago, IL.

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MEMORANDUM OPINION AND ORDER

Robert W. Gettleman, United States District Judge.

Plaintiff Ben Scherr sued defendants Western Sky Financial LLC, Martin A. Webb (" Webb" ), and CashCall, Inc. in the Circuit Court of Cook County, Illinois, alleging that defendants violated various Illinois statutes by issuing to him a usurious loan. Defendants removed the case to this court based on diversity of citizenship, and have now moved to dismiss arguing that: venue is improper; plaintiff's claims are barred by the Dormant Commerce Clause; the complaint fails to state a claim under Illinois law; the court lacks personal jurisdiction over defendant Webb; and the contract forum selection clause requires that the case be heard in the Cheyenne River Sioux Tribal Court. For the reasons described below, the motion is denied.

BACKGROUND

Defendant Webb is a member of the Cheyenne River Sioux Tribe. Webb owns defendant Western Sky and a number of other South Dakota limited liability companies, all of which are in the business of providing high-interest loans through internet transactions. Webb and all of his entities operate from their headquarters located on the Cheyenne River Indian Reservation in South Dakota, purportedly under tribal law. Defendant CashCall is a California corporation that services certain of Western Sky's loans.

In October 2012, plaintiff applied for and received a $10,000 loan from Western Sky. The loan charged an annual interest rate of 89.63% on the principal amount. Plaintiff applied for the loan from his home in Illinois by submitting an application through Western Sky's website. He made one payment of less than $1,000 and then brought the instant suit to void the loan and keep the remaining proceeds. Plaintiff claims that the loan is both civilly and criminally usurious under Illinois law and that defendants knew that the loan was unenforceable because they had already been sued for similar conduct in Jackson v. Pay Day Financial, LLC, No. 11 C 9288 (N.D. Ill.).

DISCUSSION

1. Venue

Defendants first argue that the case should be dismissed because plaintiff cannot establish that venue in this judicial district is proper under the general venue statute, 28 U.S.C. § 1391. In particular, defendants argue that plaintiff cannot establish

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that a " substantial part of the events or omissions giving rise to the claim occurred" in this district. 28 U.S.C. ยง 1391(b)(2). ...


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