By Thomas G. Wolfe
In addressing a proposed class action by Minnesota borrowers against MoneyMutual, LLC, a Nevada company that arranged the borrowers’ payday loans with a network of lenders, the Minnesota Court of Appeals was called upon to rule on MoneyMutual’s request to dismiss the action for lack of personal jurisdiction and for failure to join the lenders as indispensable parties.
According to the court’s opinion in Rilley v. MoneyMutual, LLC, the borrowers in the proposed class action alleged that MoneyMutual’s website and advertising “contained false and misleading statements,” that the payday loan coordinator matched the respective borrowers with “lenders that were unlicensed in Minnesota,” and that the payday loans violated Minnesota law. In seeking to dismiss the borrowers’ complaint, MoneyMutual argued that it was a nonresident company that did not actually make the loans and did not specifically target Minnesota residents by its television advertisements and its solicitations via its website and e-mails. The company’s arguments did not prevail to dismiss the borrowers’ complaint.
In affirming the state trial court’s decision to allow the borrowers’ proposed class action to proceed, the Minnesota appellate court determined that the borrowers sufficiently alleged “minimum contacts” to establish personal jurisdiction over MoneyMutual and that MoneyMutual did not adequately demonstrate that “complete relief” could not be obtained in the absence of the lenders.
Notably, in reaching its decision, the state appellate court not only reviewed Minnesota law but also acknowledged the prevalence of e-commerce in the state. For instance, the court asserted that it found it “unwise to disregard contacts through an openly accessible website given the increased tendency for commerce to take place via the Internet, particularly when the website is used to circumvent Minnesota law.” Further, the court determined that “Minnesota has expressed a clear intent to regulate payday lending and to protect its residents from predatory practices by enacting statutes that govern not just lenders, but also those who arrange payday loans.”
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