Bridges

THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF NORTH CAROLINA

ASHEVILLE DIVISION

CIVIL CASE NO. 1:24-cv-00087-MR-WCM

SHELLEY BRIDGES, LISA )

BLAKEMORE, and TERESA )

LUKASZEWICZ, individually and on )

behalf of all others similarly )

situated, )

)

Plaintiffs, )

) MEMORANDUM OF

vs. ) DECISION AND ORDER

)

RAYCEN RAINES, WAKPAMNI )

LAKE COMMUNITY CORPORATION, )

WLCC II d/b/a ARROWHEAD )

ADVANCE, WLCC LENDING JEM )

d/b/a EXPLORE CREDIT, WLCC )

LENDING FDL d/b/a FAST DAY )

LOANS, WLCC LENDING FDL )

d/b/a FIRST DAY LOAN, and JOHN )

DOES Nos. 1–40, )

)

Defendants. )

________________________________ )

THIS MATTER is before the Court on the Defendants’ Motion to

Compel Arbitration [Doc. 14] and the Defendants’ Motion to Dismiss and/or

Strike Class Allegations [Doc. 16].

I. PROCEDURAL BACKGROUND

On March 25, 2024, the Plaintiffs Shelley Bridges, Lisa Blakemore, and

Teresa Lukaszewicz initiated this action against the Defendant Raycen

Raines, Wakpamni Lake Community Corporation, several lending entities,

and John Does Nos. 1–40, alleging that the Defendants operated a predatory

lending scheme in which the Defendants attempted to “cloak themselves

with sovereign immunity . . . to shield plainly illegal commercial conduct.” [Id.

at 1–2]. The Plaintiffs assert a putative class action and allege that the

Defendants’ scheme violated the Racketeer Influenced and Corrupt

Organizations Act, 18 U.S.C. §§ 1962(c), (d) (“RICO”); North Carolina’s

Usury Law; North Carolina’s Consumer Finance Act; North Carolina’s Unfair

and Deceptive Trade Practices Act; Tennessee’s Usury Law; and

Wisconsin’s Usury Law. [Id. at 19–28]. The Plaintiffs also allege claims for

unjust enrichment and civil conspiracy. [Id. at 28–29].

The Defendants now move to compel arbitration and to dismiss and/or

strike the class allegations in the Plaintiffs’ Complaint. [Docs. 14, 16]. The

Plaintiffs have responded to these motions [Docs. 20, 21], and the

Defendants have replied [Docs. 22, 23]. Having been fully briefed, this

matter is ripe for disposition.

II. FACTUAL BACKGROUND

The Plaintiffs collectively allege that the Defendants are predatory

lenders who have attempted to associate themselves with an American

Indian tribe to engage in a predatory lending scheme seeking to have the

tribe’s sovereign immunity shield the Defendants from civil liability and

government enforcement. [Doc. 1 at 1-2]. As part of the alleged scheme,

the Defendants formed organizations to provide individuals with short-term

loans with interest rates exceeding six hundred percent. [Id.]. The Plaintiffs

each took out one or more of these loans and, in doing so, signed Loan

Agreements that contained the following provisions:

Governing Law. This Agreement is governed by the

laws of the Oglala Sioux Nation of the Pine Ridge

Reservation Tribe (“Tribal Law”), a federally

recognized Indian Tribe, the Indian Commerce

Clause of the United States Constitution, and

applicable federal law. The Arbitration provision

below is governed by Tribal Law, the Federal

Arbitration Act (“FAA”), decisions of the United States

Supreme Court interpreting the FAA, and other

applicable federal law without regard to the laws of

any state, including the conflict of laws rules of any

state. We do not have a presence in South Dakota

or any other State of the United States of America.

Neither this Agreement nor the Lender is subject to

the law of any State of the United States. You agree

to be bound by Tribal Law, and in the event of a bona

fide dispute between you and us, Tribal Law and

applicable federal law shall exclusively apply to such

dispute.

. . . .

BINDING CONFIDENTIAL ARBITRATION

AGREEMENT AND CLASS ACTION WAIVER

. . . .

PLEASE READ THIS PROVISION OF THE

AGREEMENT CAREFULLY. Unless you exercise

your right to opt-out of arbitration in the manner

described below, any Claim you have with Lender or

anyone else under this Agreement will be resolved by

binding arbitration. Arbitration replaces the right to

go to court, including the right to have a jury, . . . and

to participate in a class action or similar

proceeding....

Any issues regarding the validity, effect and

enforceability of this Agreement to Arbitrate (or any

provision thereof) shall be determined solely by the

Arbitrator.

. . . .

Agreement to Arbitrate. You agree that any Claim

. . . will be resolved on an individual basis by

arbitration in accordance with this Arbitration

Provision, applicable Oglala Sioux tribal law, and

Applicable Federal Law.

. . . .

YOU ARE GIVING UP YOUR RIGHT TO SERVE AS

A REPRESENTATIVE, AS A PRIVATE ATTORNEY

GENERAL, OR IN ANY OTHER

REPRESENTATIVE CAPACITY, AND/OR TO

PARTICIPATE AS A MEMBER OF A CLASS OF

CLAIMANTS, IN ANY LAWSUIT AGAINST US

AND/OR RELATED THIRD PARTIES . . . .

. . . .

Waiver of Jury Trial and Waiver of Ability to

Participate in a Class Action. YOU HEREBY

AGREE THAT YOU ARE WAIVING YOUR RIGHT

TO A JURY TRIAL, TO HAVE A COURT DECIDE

YOUR CLAIM, AND YOU ARE WAIVING YOUR

ABILITY TO SERVE AS A REPRESENTATIVE, AS A

PRIVATE ATTORNEY GENERAL, TO PARTICIPATE

IN A CLASS ACTION LAWSUIT, OR IN ANY OTHER

REPRESENTATIVE CAPACITY FOR OTHERS IN

THE ARBITRATION, AND TO CERTAIN

DISCOVERY AND OTHER PROCEDURES THAT

WOULD BE AVAILABLE IN A LAWSUIT. The

arbitrator has the ability to award all remedies

available under the Oglala Sioux Tribe’s tribal law

and applicable federal law, whether at law or in

equity, to the prevailing party, except that the parties

agree that the arbitrator has no authority to conduct

class-wide proceedings and will be restricted to

resolving the individual claims between the parties....

. . . .

Applicable Law and Judicial Review. You and we

choose Oglala Sioux tribal law, and Applicable

Federal Law to govern the loan Agreement, the

Arbitration Agreement and all Claims.

[Doc. 18-1: Bridges September 2023 Loan Agreement at 5–7; see also Doc.

18-2: Bridges November 2023 Loan Agreement at 5–8; Doc. 18-3:

Blakemore June 2022 Loan Agreement at 5–7; Doc. 18-4 Blakemore June

2023 Loan Agreement at 9–15; Doc. 18-5 Lukaszewicz May 2022 Loan

Agreement at 4–8].1 The Defendants argue that these provisions mandate

that the Plaintiffs’ claims be resolved in arbitration, and that each Plaintiff

pursue his or her claims individually and not as a class action. [Docs. 15,

17].

1 While the Loan Agreements are not attached to the Complaint, they are explicitly

incorporated into the Complaint by reference and their authenticity is not in dispute.

Therefore, they may be considered. See Goines v. Valley Cmty. Servs. Bd., 822 F.3d

159, 166 (4th Cir. 2016). Additionally, the language in each Loan Agreement is materially

the same. Therefore, throughout this opinion, the Court will cite only to the Bridges

September 2023 Loan Agreement in referencing the language contained in each of the

Plaintiffs’ Loan Agreements.

III. LEGAL STANDARD

The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., establishes

“a liberal federal policy favoring arbitration agreements in order to reverse

the longstanding judicial hostility to arbitration agreements . . . and to place

arbitration agreements upon the same footing as other contracts.” Murray v.

United Food & Com. Workers Int'l Union, 289 F.3d 297, 301 (4th Cir. 2002)

(internal citations and quotation marks omitted). In treating an arbitration

agreement like any other contract, courts “may invalidate an arbitration

agreement based on ‘generally applicable contract defenses.” Kindred

Nursing Ctrs. Ltd. P’ship v. Clark, 581 U.S. 246, 251 (2017) (quoting AT&T

Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011)).

Under the FAA, “any doubts concerning the scope of arbitrable issues

should be resolved in favor of arbitration, whether the problem at hand is the

construction of the contract language itself or an allegation of waiver, delay,

or a like defense to arbitrability.” Moses H. Cone Mem'l Hosp. v. Mercury

Constr. Corp., 460 U.S. 1, 24-25 (1983). “When parties have entered into a

valid and enforceable agreement to arbitrate their disputes and the dispute

at issue falls within the scope of that agreement, the FAA requires federal

courts to stay judicial proceedings and compel arbitration in accordance with

the agreement’s terms.” Murray, 289 F.3d at 301 (citations omitted); see also

9 U.S.C. §§ 3-4.

The party seeking to compel arbitration under the FAA has the burden

of establishing the existence of a valid agreement to arbitrate. Minnieland

Priv. Day Sch., Inc. v. Applied Underwriters Captive Risk Assurance Co., Inc.,

867 F.3d 449, 456 (4th Cir. 2017).

IV. DISCUSSION

A. Delegation Clause

“The question whether the parties have submitted a particular dispute

to arbitration, i.e., the ‘question of arbitrability,’ is an issue for judicial

determination unless the parties clearly and unmistakably provide

otherwise.” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002)

(quoting in part AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S.

643, 649 (1986)) (emphasis in original). The parties may manifest such clear

and unmistakable intent through the inclusion of a delegation clause. See

Henry Schein, Inc. v. Archer and White Sales, Inc., 586 U.S. 63, 69 (2019).

Here, the Loan Agreements at issue provide that “[a]ny issues

regarding the validity, effect and enforceability of this Agreement to Arbitrate

(or any provision thereof) shall be determined solely by the Arbitrator.” [See

Doc. 18-1: Bridges September 2023 Loan Agreement at 6]. This delegation

clause evidences a clear and unmistakable intent to have any claims

regarding the “validity, effect, or enforceability” of the Agreements to be

resolved by an arbitrator, not the Court. However, the Plaintiffs contend that

this delegation clause, along with the arbitration agreement in general, is

unenforceable because it operates as a prospective waiver of their statutory

rights. [See Doc. 20 at 27-29].

When a party makes a specific challenge to a delegation clause, the

Court must evaluate the validity of such clause before compelling

compliance with the arbitration agreement. Rent-A-Center, West, Inc. v.

Jackson, 561 U.S. 63, 71 (2010). Thus, despite the existence of delegation

clauses within the parties’ agreements, the Court will consider the merits of

the Plaintiffs’ invalidity argument based on the prospective waiver doctrine.

B. Prospective Waiver

1. Federal Law

Under the prospective waiver doctrine, “an agreement that

prospectively waives a party’s right to pursue statutory remedies is

unenforceable as a violation of public policy.” Hengle v. Treppa, 19 F.4th

324, 334 (4th Cir. 2021) (quoting in part Mitsubishi Motors Corp. v. Soler

Chrysler-Plymouth, 473 U.S. 614, 637 n. 19 (1985) (internal quotation marks

omitted). The mere inclusion of a foreign choice of law provision, however,

“will not trigger application of the prospective waiver doctrine.” Dillon v. BMO

Harris Bank, N.A., 856 F.3d 330, 334 (4th Cir. 2017). As the Supreme Court

has recognized, the FAA “allows parties to an arbitration contract

considerable latitude to choose what law governs some or all of its

provisions, including the law governing enforceability of a class-arbitration

waiver. In principle, [the parties] might choose to have portions of their

contract governed by the law of Tibet” or even “the law of pre-revolutionary

Russia . . . .” DIRECTV, Inc. v. Imburgia, 577 U.S. 47, 53-54 (2015) (citations

omitted). Thus, the salient inquiry is “whether, as a matter of law, the choice-

of-forum and choice-of-law clauses operate in tandem as a prospective

waiver of a party’s right to pursue statutory remedies.” Gibbs v. Haynes

Investments, LLC, 967 F.3d 332, 340 (4th Cir. 2020) (citation omitted).

In the context of tribal lending, the Fourth Circuit has held that

arbitration agreements which apply tribal law to the exclusion of any federal

substantive statutory remedies are unenforceable as a prospective waiver of

federal rights. See Hengle, 19 F.4th at 339 (invalidating arbitration

agreement where it effectively dictated the “exclusive application of tribal law

in arbitration”); Gibbs v. Sequoia Cap. Operations, LLC, 966 F.3d 286, 293

(4th Cir. 2020) (finding arbitration agreement unenforceable where contract

“mandate[d] the primary and effective control of tribal law in resolving

disputes”); Dillon 856 F.3d at 336 (concluding that the arbitration agreement

“evince[s] an explicit attempt to disavow the application of federal or state

law” and thus was unenforceable); Hayes v. Delbert Servs. Corp., 811 F.3d

666, 675 (4th Cir. 2016) (concluding that an arbitration agreement which

excluded the application of “any law other than” tribal law “almost

surreptitiously waives a potential claimant’s federal rights through the guise

of a choice of law clause”).

Here, the Loan Agreements provide that the arbitration provisions are

“governed by Tribal Law, the Federal Arbitration Act (‘FAA’), decisions of the

United States Supreme Court interpreting the FAA, and other applicable

federal law without regard to the laws of any state, including the conflict of

laws rules of any state” and that “Oglala Sioux tribal law, and Applicable

Federal Law” would “govern the loan Agreement, the Arbitration Agreement

and all Claims.” [Doc. 18-1: Bridges September 2023 Loan Agreement at 5–

7]. These provisions do not, either explicitly or implicitly, operate to

prospectively waive the Plaintiffs’ federal statutory rights.

2. State Law

Despite the preservation of their rights under federal law, the Plaintiffs

argue that the arbitration provisions are nevertheless unenforceable

because they prospectively waive the Plaintiffs’ statutory rights and remedies

under state law. [Doc. 20 at 11-21].

In so arguing, the Plaintiffs rely on three sentences in a footnote in

Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2022), in which the

Supreme Court stated in dicta as follows:

In briefing before this Court, Viking argued that the

principle that the FAA does not mandate enforcement

of provisions waiving substantive rights is limited to

federal statutes. This argument is erroneous. The

basis of this principle is not anything unique about

federal statutes.

596 U.S. at 653 n.5. The Court went on in that same footnote, however, to

clarify that statement as follows:

It is that the FAA requires only the enforcement of

“provision[s]” to settle a controversy “by arbitration,”

§ 2, and not any provision that happens to appear in

a contract that features an arbitration clause. That is

why we mentioned this principle in Preston [v. Ferrer,

552 U.S. 346 (2008)], which concerned claims

arising under state law. See 552 U.S. at 360, 128

S.Ct. 978 (noting that under the agreement, a party

“relinquishe[d] no substantive rights ... California law

may accord him”).

Id. Moreover, the paragraph of the Court’s opinion where that footnote is

placed reads, in pertinent part:

An arbitration agreement thus does not alter or

abridge substantive rights; it merely changes

how those rights will be processed. And so we

have said that “‘[b]y agreeing to arbitrate a statutory

claim, a party does not forgo the substantive rights

afforded by the statute; it only submits to their

resolution in an arbitral ... forum.’” Preston v. Ferrer,

552 U.S. 346, 359, 128 S.Ct. 978, 169 L.Ed.2d 917

(2008) (quoting Mitsubishi Motors Corp., 473 U.S. at

628, 105 S.Ct. 3346).

Id. at 653 (emphasis added). Thus, at most, the passage in Viking River

cited by the Plaintiffs, when read in context of the Court’s main analysis,

stands for the proposition that substantive statutory rights, whether state or

federal, are not forfeited simply by the fact that they are resolved in an

arbitral, as opposed to a judicial, forum. In other words, the Supreme Court

recognized that the inclusion of a clause requiring arbitration under the FAA

is not some magical incantation that voids a choice of law provision.

Under the prospective waiver doctrine, one cannot invoke rights under

federal law, i.e., the FAA, while simultaneously waiving rights under federal

law. “Because the FAA stands on equal footing with other federal statutes,

the prospective waiver [doctrine] becomes relevant only where compelling

arbitration, as the FAA instructs, simultaneously jeopardizes federally

protected interests.” Walton v. Uprova Credit LLC, 722 F.Supp.3d 824, 836

(N.D. Ill. 2024) (emphasis added). There is no inconsistency, however, in

invoking federal law regarding arbitration and other federal rights, while also

choosing certain other substantive law (whether that be a specific state’s law,

tribal law or the law of pre-revolutionary Russia) as controlling. The waiver

of other rights as may be conferred by other jurisdictions presents no

conflict.2

Other federal courts have construed the prospective waiver doctrine in

a similar manner. See Walton, 722 F.Supp.3d at 836 (“we ultimately remain

unpersuaded that the prospective waiver doctrine was intended to preserve

state statutory rights”); Johnson v. Opportunity Fin., LLC, No. 3:22cv190,

2023 WL 2636712, at *5-6 (E.D. Va. Mar. 24, 2023) (“the prospective waiver

doctrine only applies to the waiver of federal, not state, statutory rights”).

Limiting application of the prospective waiver doctrine to federal statutory

rights is consistent with the principle that “parties to an arbitration contract

[have] considerable latitude to choose what law governs some or all of its

provisions.” DIRECTV, 577 U.S. at 53-54. Thus, parties agreeing to arbitrate

under the FAA could choose the law of North Carolina, North Dakota, or the

tribal law of a federally recognized Indian tribe, so long as there is no explicit

or implicit preclusion of other federal statutory rights. As the parties’

agreements do not prospectively waive the Plaintiffs’ federal statutory rights,

the prospective waiver doctrine does not render the arbitration provisions of

these agreements unenforceable.

2 If, for example, the parties had invoked the arbitration act of a particular state, while also

purporting to waive any substantive rights under that state’s laws, then such an

inconsistency may be found. But that is not the circumstance presented here.

3. RICO

The Plaintiffs next argue that because the choice-of-law provisions in

the Loan Agreements preclude even the consideration of state law, the

Plaintiffs will not be able to establish a RICO claim in arbitration.3 As such,

the Plaintiffs contend, the arbitration provisions are unenforceable because

they implicitly waive their federal substantive rights under RICO. [Doc. 20 at

21-22]. [Id.].

In arguing that the language of the arbitration provisions constitutes an

implicit waiver of their right to bring RICO claims, the Plaintiffs cite Hengle

and Dillon, supra. The Plaintiffs’ reliance on Hengle and Dillon, however, is

misplaced. In both cases, the delegation clauses required the application of

tribal law in arbitration to the exclusion of all federal substantive law. Hengle,

19 F.4th at 342; Dillon, 856 F.3d at 335. As such, the Fourth Circuit held that

the arbitration provisions “function[ed] as a prospective waiver of the

[plaintiffs’] rights to pursue federal statutory remedies,” including under

RICO. Hengle, 19 F.4th at 342; see also Dillon, 856 F.3d at 336. By

contrast, in the present case, the arbitration provisions explicitly provide for

the application of both tribal and federal law. As such, it is undisputed that

3 The federal RICO statute defines “unlawful debt” in part as a debt “which is

unenforceable under State or Federal law in whole or in part as to principal or interest

because of the laws relating to usury.” 18 U.S.C. § 1961(6) (emphasis added).

the Plaintiffs can pursue their RICO claims at arbitration. While the Plaintiffs

argue that they will be precluded from relying on their respective state usury

laws to establish a RICO violation and thus will not prevail, this is of no

moment. “[A] plaintiff’s chance of success plays no role in the analysis

deciding whether arbitration must be had.” Johnson, 2023 WL 2636712, at

*5. “It is enough that the plaintiff is not barred from bringing her claim, even

if it is bound for defeat.” Id.

4. Tribal Credit Code

Finally, the Plaintiffs argue that the Tribal Credit Code prospectively

waives a borrower’s rights and deprives them of any meaningful opportunity

to vindicate their federal claims. [Doc. 20 at 22-27]. Specifically, the Plaintiffs

contend that the language contained in the Loan Agreements’ choice-of-law

provisions—“the laws of the tribe and applicable federal law”—does not

sufficiently encompass all federal substantive law. [Id. at 25]. The Plaintiffs

proclaim that the Court must read references to “‘applicable federal law’ . . .

in conjunction with the contract as a whole,” including the “incorporation of

the Tribal Credit Code” which, according to the Plaintiffs, excludes some

federal law. [Id. at 26].

The Defendants concede, however, that, under the Loan Agreements,

“[f]ederal law is equally available along with tribal law” in arbitration. [Doc.

15 at 20]. In this respect, this matter is similar to Mitsubishi Motors Corp. v.

Soler Chrysler-Plymouth, 473 U.S. 614 (1985), the case in which the

Supreme Court introduced the prospective waiver doctrine. In Mitsubishi,

the Supreme Court determined that, after a party conceded that federal law

applied in arbitration, there was no need to speculate on either (1) “the

possibility that the arbitral panel will read [a] provision . . . to displace

American law,” or (2) “the capacity” of an aggrieved party “to reinitiate suit in

federal court” if the arbitral panel failed to apply American law. 473 U.S. at

637 n.19. Similarly, here, because the Defendants concede that federal law

will apply in arbitration, this Court need not speculate on how an arbitrator

may interpret the language “applicable federal law.”

For the foregoing reasons, the Court concludes that the choice-of-law

provisions contained in the Loan Agreements do not implicate the

prospective waiver doctrine. Accordingly, the Court will grant the

Defendants’ Motion to Compel Arbitration and stay this action pending

arbitration in accordance with the Loan Agreements.

C. Class Allegations

The Defendants state that their Motion to Dismiss and/or Strike Class

Allegations “need only be decided in the event that the motion to compel

arbitration is denied.” [Doc. 16 at 2 n.2]. Because the Court is granting the

Defendants’ Motion to Compel Arbitration [Doc. 14], the Court will deny the

Defendants’ Motion to Dismiss and/or Strike Class Allegations [Doc. 16] as

moot and dismiss the Motion without prejudice to the Defendants filing a

similar motion in arbitration.

V. CONCLUSION

For the foregoing reasons, the Court concludes that the choice-of-law

provisions contained in the Loan Agreements do not implicate the

prospective waiver doctrine. Accordingly, the Court will grant the

Defendants’ Motion to Compel Arbitration and stay this action pending

arbitration in accordance with the Loan Agreements. Because the Court is

granting the Defendants’ Motion to Compel Arbitration, the Court will deny

the Defendants’ Motion to Dismiss and/or Strike Class Allegations as moot

and dismiss the Motion without prejudice to the Defendants filing a similar

motion in arbitration.

ORDER

IT IS, THEREFORE, ORDERED that the Defendants’ Motion to

Compel Arbitration [Doc. 14] is GRANTED, and the parties are hereby

ordered to arbitrate their dispute in accordance with the terms of the parties’

agreements. This matter is hereby STAYED pending arbitration in

accordance with the parties’ agreements.

IT IS FURTHER ORDERED that the Defendants’ Motion to Dismiss

and/or Strike Class Allegations [Doc. 16] is DENIED and DISMISSED

WITHOUT PREJUDICE.

IT IS SO ORDERED.

Signed: December 10, 2025

Martifi Reidinger ee

Chief United States District Judge “AES

18