Western Sky Financial, LLCv.State Of Georgia
The State of Georgia sued Western Sky Financial, CashCall, and related defendants under the Georgia Payday Lending Act, alleging that an out-of-state, Internet-based lending operation charged illegal interest to Georgia borrowers. The trial court denied dismissal, entered an injunction regulating new loans and collections, required money to be placed in escrow, and denied the State’s motion to add additional defendants. The Supreme Court of Georgia affirmed the denial of dismissal and upheld the modified injunction. It held that the Act could reach the alleged small-dollar lending activity even though the defendants operated outside Georgia and dealt with borrowers by telephone or Internet. The court also rejected the argument that the injunction operated as an impermissible prejudgment attachment because the State sought equitable relief to prevent the defendants from dissipating funds allegedly obtained through unlawful lending. The Court reversed only the order denying the State’s motion to add parties and remanded that issue for further proceedings. The final disposition was affirmed in part and reversed in part. All the Justices concurred.
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