Usury Laws-Tribal Sovereign Immunity & Lending Practices

7^th Circuit Court of Appeals

Case Name: Eido Hussam Al-Nahhas v 777 Partners LLC

Case No.: 23-2723

Officials: Easterbrook, Rovner, and Jackson-Akiwumi, Circuit Judges.

Focus: Usury Laws-Tribal Sovereign Immunity & Lending Practices

Eido Hussam Al-Nahhas, a resident of Illinois, took out four loans from Rosebud Lending LZO, doing business as ZocaLoans, with interest rates as high as nearly 700%, well above Illinois’s legal limits. Al-Nahhas claimed that ZocaLoans was a front for two private equity firms, 777 Partners, LLC, and Tactical Marketing Partners, LLC, which used tribal sovereign immunity through the Rosebud Sioux Tribe to circumvent state usury laws. He filed a lawsuit against ZocaLoans and the firms for violating Illinois usury laws and the federal Racketeer Influenced and Corrupt Organizations (RICO) Act.

The defendants participated in the litigation for fourteen months, including filing an answer, engaging in discovery, and attending status conferences. Later, they sought to compel arbitration based on an arbitration clause in the loan agreements. The Northern District of Illinois denied their motion, ruling that the defendants had waived their right to compel arbitration by engaging in the litigation process.

The Seventh Circuit affirmed the district court’s decision. The court agreed that the defendants had waived their right to arbitrate due to their conduct during the litigation. It also determined that the case was not moot despite a settlement between Al-Nahhas and ZocaLoans, as punitive damages were still a potential issue. The court granted the parties’ motions to file documents under seal.

Affirmed.

Decided 02/19/25

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