Payday Lenders Sue SOS Krebs to Pull 36% Rate Cap from Ballot

With the help of familiar Republican players, payday-lender front group Give Us Credit South Dakota has launched its latest court-clogging attack on Initiated Measure 21, the real 36% rate cap on payday loans. Represented by renowned anti-voting-rights GOP attorney Sara Frankenstein and backed by an affidavit from young GOP flunky Aaron Lorenzen, GUC-SD sues Secretary of State Shantel Krebs and demands that she remove IM 21 from the ballot based on invalid petition signatures.

(Mmmmm… Miss South Dakota 1998 Frankenstein sues the woman who handed her that beauty crown, Miss South Dakota 1997 Shantel Swedlund, now Krebs. Popcorn! Peanuts!)

The lawsuit largely recycles the complaints from Lorenzen and Craig S. Olson’s specious petition challenge, which they filed in January and which Secretary Krebs rejected in May. Olson charged that circulators Reynold Nesiba, Steve Hickey, and Kristen Hickey submitted addresses under oath in 2015 at which they were not living in 2016. Frankenstein acknowledges that looking into such address information lies outside the Secretary of State’s petition-review authority but asks the court to review the evidence that Nesiba and the Hickeys now live elsewhere and invalidate the 2,419 signatures they submitted.

Frankenstein asks the court to invalidate another 239 signatures turned up in Mike Napier’s statewide fishing trip (funny: the payday lenders sent a stooge to grill circulators in Aberdeen a couple weekends ago, but they didn’t come visit me). The Lederman bailbondsman (again, note the Republican connections) yielded three suspect circulators with 239 signatures the payday lenders think they can pull from the petition. In his affidavit, Napier swears he checked the addresses circulators Lincoln Steel, Barbara Basketfield, and Jean Behr indicated on their petitions last year and did not find the circulators living there during the first part of June 2016.

Frankenstein contends the 2,658 signatures gathered by these six circulators should all be tossed due to the suspicion raised by their doubtful addresses that they may have been out-of-state circulators, which is a gross violation of South Dakota law:

Memo SumJudg p11 on out-of-state circs
[Sara Frankenstein for Give Us Credit South Dakota, Memorandum in Support of Motion for Partial Summary Judgment, Give Us Credit South Dakota v. Shantel Krebs, Case No. 32CIV16-000123, 2016.06.15]
The disgusting irony here is that the payday lenders, who spent $1.7 million dollars hiring out-of-state circulators who masqueraded as residents to circulate the fake 18% rate cap petition, are now insinuating that the real 36% rate cappers employed out-of-state circulators. It’s as if they are trying to bait us into suing them over their fraudulent mercenary circulators.

Let me take Sara to court on this question right now:

  1. GUC presents no evidence that the six circulators in question were not residents of South Dakota at the time they circulated the petition.
  2. GUC presents no evidence that Nesiba, the Hickeys, Steel, Basketfield, and Behr do not satisfy the residency requirement of SDCL 12-1-4 and the Heinemeyer case.
  3. GUC presents no evidence that the circulators in question did not live at the addresses they wrote on their petition sheets at the time they swore their circulator’s oaths before their notaries public.
  4. GUC presents no legal argument that the state’s interest in obtaining contact information from petition circulators creates any affirmative duty on the part of petition circulators to provide updated contact information to the state after they have signed and obtained a notary seal on their petition sheets or any restriction on their right to move to a different address after circulating a petition.
  5. GUC offers no legal argument that the mere absence of a circulator from his indicated address at the one time that one person subsequently visits that address invalidates the signatures of real, registered South Dakota voters who want to see an initiative on the ballot.

The argument Frankenstein needs to make—and the argument I suspect we could make against the circulators of Amendment U, the payday lenders fake 18% rate cap—is not simply that their well-paid consultants couldn’t find Circulator X at Address Y eight to ten months after X signed Petition Sheet Z. On top of that, Frankenstein needs to argue that Circulator X stayed at Address Y the same way that Buffalo Chip campers stayed at those empty lots that they tried to illegally petition into a town. Frankenstein needs to read SDCL 12-1-4 and establish that X didn’t just leave address Y for a temporary purpose but never actually fixed habitation in the state at the time of circulating and never intended to stay in South Dakota.

Reynold Nesiba moved across town. Steve Hickey and his wife went to Scotland temporarily for school. All three are still registered South Dakota voters. They account for 91% of the signatures GUC is challenging based on circulator address. Those signatures will withstand scrutiny.

GUC and Frankenstein replay the rest of Lorenzen and Olson’s failed challenge. They repeat that 3,429 signatures should be thrown out because the notary seal obscures the notary date. I pointed out what silly spaghetti that argument was back in January. The court will not take that number seriously. So between the Nesiba/Hickey signatures and the crazy notary stamp claim, GUC has already lost over 5,800 out of the 13,076 signatures it claims to be challenging in this court action (although Frankenstein notes the plaintiffs reserve the right to change that number as the suit proceeds).

The court challenge plows no new ground in its other challenges. Of the 7,607 itemized signatures Lorenzen and Olson challenged in January, Secretary Krebs found only 2,770 invalid. That’s a success rate for the payday lenders of 36% and a spaghetti rate of 64%. If we throw out the Nesiba/Hickey and stamp-obscuring-date challenges as bogus and apply the demonstrated success/spaghetti rate to the remaining 7,200 signatures GUC wants tossed, they’ll only cross off about 2,600 signatures, which, even if the judge generously applies to the Secretary’s May post-challenge count of 17,163 valid signatures, won’t be enough to beat IM 21’s 3,292-vote cushion.

In other words, Sara, Bradley, and payday lenders, you’re going to lose. Even the practically infinite resources of the usurers aren’t enough to undo the legitimate grassroots petitioning that put the real 36% rate cap on the ballot.

But hey: Sara and Bradley and the payday lenders know they can’t win a fair argument at the polls, so they have to burn up money trying to protect the loan sharks’ business model by intimidating petitioners, clogging the courts, and distracting supporters from the campaign… which, on the bright side, should only benefit from more free press showing the payday lenders unscrupulous tactics and the IM 21 supporters’ solid petition performance and honest intent to protect their neighbors from the predations of the payday lenders.


15 Responses to Payday Lenders Sue SOS Krebs to Pull 36% Rate Cap from Ballot

  1. Lanny V Stricherz

    Wouldn’t it be awesome and serving them right, if SOS Krebs were to reverse her position on the petitions gathered for the 18% measure?

  2. Darin Larson

    Thanks Cory. I feel better now hearing what their arguments are to challenge IM21. It sounds like a judge should dismiss this latest effort by the Payday Loan Sharks in short order. It doesn’t even sound like they have raised sufficient evidence or presented legal arguments that will withstand a motion to dismiss. On the bright side, I feel good about the payday lenders spending money on attorneys that will be more money down the hole for them. It’s too bad taxpayers have to pay to fight these specious claims by the loan sharks.

    It’s time for more letters to the editor by concerned citizens regarding the payday lenders efforts to circumvent democracy and continue their assault on the poor and disadvantaged.

  3. mike from iowa

    Sounds more like the courts ought to bar any more challenges due to nuisance value and treat Frankenstein like Larry Klayman. He is hard pressed to find a court that hasn’t banned him for filing frivolous suits.

  4. mike from iowa

    ps it is Judicial Watch-Klayman’s old playmates that are tying up the justice department with FOIA requests on virtually any subject with HRC’s name on it.FYI.

  5. I almost wonder if the people at Give Us Credit are filing frivolous lawsuits purely because Rod Aycox will pay cover the cost . The legal equivalent of busy work.

  6. Nick Nemec

    Miller, no doubt Ms. Frankenstein will be paid her hourly rate no matter what. She will continue throwing spaghetti at the wall hoping something will stick and the deep pocketed payday lenders will pick up the bill.

  7. Lanny, to get those results, we’d need a couple hundred thousand dollars, like Rod Aycox is spending through GUC on Sara Frankenstein and Mike Napier, to engage a lawyer and some P.I.’s to track down all of the payday lenders’ out-of-state circulators and prove that they never established more than temporary lodging in South Dakota and paid locals to stand around as “witnesses” and sign as circulators on petitions they did not circulate. And if you offered me $200K to prosecute such a suit, I might recommend spending it on a straightforward ad campaign telling people, “Yes on 21, No on U!”

  8. mike from iowa

    If someone knocks on my door and I don’t bother to answer,does that mean they can say I no longer live here? Is that the standard in South Dakota?

  9. Bob Newland

    Seriously? Miss SoDak of 1998 was named FRANKENSTEIN? How fitting.

  10. bearcreekbat

    It would be grounds for attorney disciplinary sanction, including suspension or even disbarment, if Ms. Frankenstein files lawsuits that are objectively frivolous. I don’t know her but I have to suspect she is smart enough to avoid taking political cases that could lead to the loss of her licence to practice law. Indeed, if she has political aspirations disbarment would not help her one bit.

    Perhaps she has concluded that there are reasonable factual or legal issues that need a court or jury to resolve. While I might find myself in disagreement with the positions she has argued, I am hard pressed to assume she is intentionally bringing frivolous cases. Many laws and rules are ambiguous, which opens the door for seeking a judicial determination of the meaning of those laws and rules.

  11. Hey, Bear, she stuck with Jackson County and their petty resistance to opening the satellite voting center in Wanblee. However, I’ll agree she is no dummy. Maybe she knows she’s walking just on the safe side of the frivolous boundary. Or maybe she knows that, with the Republicans throwing in in so many ways to back the payday lenders on this issue (Lederman, Powers, Lorenzen… Glodt?), her doing this bit for the team won’t arouse the attention of any Republican majority in the bar.

    Miller, it would be hilarious if the scheming loan sharks were getting outsharked by South Dakota lawyers.

  12. Lets be frank, Frankenstein will make a whole lot of moolah. Frankenstein must give a whole lot of campaign moolah to the regime that she takes in on this kind of bullpuckey. She is the go to gal on all things that your gonna lose on. I wonder how much she soaked Jackson County and the state for her billable efforts that did not do anything but piss people off? Frankenstein reminds me of Marty Jackley in so many ways, it is all about the moolah.

  13. Jerry, maybe Jason Ravnsborg will need to cool his jets and let Sara Frankenstein run for Attorney General in 2018. And then if she wins, I am totally suing the Secretary of State, for something, anything, just so I can see the two former Miss South Dakota Dakotas (Misses South Dakota?) sitting side-by-side in the courtroom.

  14. This is just offensive. I know Barbara Basketfield. Yes, she moved. She almost could have carried her belongings the short distance she moved – still within the same voting precinct.

  15. barry freed

    Told you our ballot machines were rigged. How do we force a hand count for the election in November?

    https://richardcharnin.wordpress.com/2016/06/15/2016-democratic-primaries-study-sanders-did-much-better-in-states-with-paper-ballots/