Date: 10-22-2024

Case Style:

State of Minnesota v. GoodLeap, LLC

Case Number: 24-CV-1181

Judge: Katherine Menendez

Court: United States District Court for the District of Minnesota (Hennepin County)

Plaintiff's Attorney: Minnesota Attorney General's Office

Defendant's Attorney:

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Description:

Minneapolis, Minnesota consumer fraud lawyers represented the Defendants.

The State of Minnesota (“the State”), filed this case in Hennepin County District Court against four Defendants that market loans to residential consumers for the purchase and installation of solar panels on their homes. Generally, the State alleges that the Defendants violated Minnesota consumer-protection statutes and usury laws by making misrepresentations and engaging in other deceptive conduct while marketing their loans to prospective customers. What the State did not know when it filed and served its complaint was that one of the named Defendants, Dividend Solar Finance, LLC (“Dividend Solar”), had merged with a national bank, Fifth Third Bank (“Fifth Third”), prior to being sued. Fifth Third and Defendant Sunlight Financial LLC removed the case to this Court, asserting that there is federal question jurisdiction. The matter is now before the Court on the State's motion to remand pursuant to 28 U.S.C. § 1447. For the reasons that follow, the State's motion is denied.


In its complaint, the State alleges that Defendants Dividend Solar, GoodLeap LLC, Sunlight Financial LLC, and Solar Mosaic LLC deceived consumers when marketing loans for the purchase and installation of solar panels. The State also claims that several Defendants charged interests rates that violate Minnesota's usury laws. According to the State, the Defendants failed to disclose the full costs of financing under their agreements by concealing significant upfront fees they charge to borrowers as though they are are part of the principal balance of the loan. In part, the State claims that Defendants' failure to disclose the nature of those upfront fees violates the Truth-in-Lending Act's (“TILA”) requirement that lenders fully disclose an agreement's “finance charge” and “annual percentage rate.”

The State also claims that Defendants deceived consumers in other ways that do not involve interpretation or application of TILA standards. For example, the State asserts that Defendants' conduct includes: false statements in sales proposals; failing to disclose that the fee is charged from the beginning of the sale; preventing consumers from learning of lower prices if they don't finance through Defendants; and telling consumers that the proceeds of the loans go exclusively to cover the cost of the solar panel system. See Compl. ¶¶ 230-33, 235, 241-42, ECF 1-1; see also id. ¶ 259. In addition, Defendants Sunlight Financial and Solar Mosaic allegedly deceive consumers by stating in loan documents that customers must repay loans even under circumstances where they would have a valid legal defense relieving them of the obligation to do so. Id. ¶¶ 235, 425. The State also alleges that the practices of Defendants GoodLeap, Solar Mosaic, and Dividend Solar result in charging interest rates that exceed those permitted by Minnesota's usury laws. Id. ¶¶ 26369.

The State's complaint includes five counts. Counts I through III of the complaint allege that all four Defendants violated the Minnesota Prevention of Consumer Fraud Act, Minn. Stat. §§ 325F.68-.70 (“MCFA”); the Uniform Deceptive Trade Practices Act, Minn. Stat. §§ 325D.43-.48 (“DTPA”); and the False Statement in Advertising Act, Minn. Stat. § 325F.67 (“FSAA”). Count IV alleges that three of the four Defendants (GoodLeap, Sunlight Financial, and Solar Mosaic) violated the Minnesota Regulated Loan Act, Minn. Stat. ch. 56. (“MRLA”). And Count V is a usury claim against GoodLeap, Solar Mosaic, and Dividend Solar, which is brought under the MRLA, Minn. Stat. §§ 56.01, 56.131, 56.18, and the Minnesota Consumer Credit Code, Minn. Stat. § 47.59.

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State v. GoodLeap LLC, 24-cv-1181 (KMM/TNL) (D. Minn. Oct 22, 2024)

Outcome: Motion to remand denied.

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Defendant's Experts:

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