By Irene Parker, MBA

A Petition for Writ of Certiorari to the United States Court of Appeals for the Eleventh Circuit was filed in the Supreme Court of the United States on October 18, 2024 on behalf of petitioners EMMANUEL G. LOUIS and TAMARAH C. LOUIS v. BLUEGREEN VACATIONS UNLIMITED, INC., and BLUEGREEN VACATIONS CORPORATION, Respondents  CASE NO. 21-CV-61938-RAR

The Supreme Court filing arises out of the following proceedings: Louis v. Bluegreen Vacations Unlimited, Inc., No. 21-cv-61938 (M.D. Fla.), judgment entered May 31, 2022  Louis v. Bluegreen Vacations Unlimited, Inc., No. 22-12217 (11th Cir.), judgment entered June 7, 2024 

Intertwining lawsuits have also been filed against Timeshare Developers Westgate Resorts, Wyndham Vacations Resorts and Travel & Leisure, and Holiday Inn Club Vacations, accusing these Developers as well of violating the Military Lending Act (MLA)

The October 28, Episode 36, PodTV Timeshare Solution or Surrender  features eight military families that have reached out just in the past year to report financial harm and security clearance concerns. All reported unfair and deceptive practices. Seven have security clearance concerns.    

The Eleventh Circuit Court of Appeals in Jacksonville, Florida held oral arguments in Louis v. Bluegreen on October 7, 2023. Those arguments were about whether the military plaintiffs suffered actual damages traceable to the MLA, but the court did not address the bigger issue, which is whether timeshare loans are exempt from the MLA. The Eleventh Circuit upheld Bluegreen's argument that plaintiffs did not suffer actual damages traceable to the MLA.  

ADAM U. STEINES; MIRANDA L. STEINES v. WESTGATE RESORTS, et. al. Case 6:22-cv-00629-RBD-DAB

In a lawsuit filed February 2, 2022, Steines v. Westgate did address the core issue - whether a timeshare stay is more like a residential stay or a transient stay. The MLA exempts residential mortgages. Of utmost importance, the MLA prohibits arbitration, arguably biased against the consumer. 

PUBLIC CITIZEN  details reasons why arbitration is unfair to consumers and discriminatory: In addition to the denial of consumers’ and employees’ rights to seek remedies in court, arbitration between two parties with unequal bargaining power is too often a discriminatory and one-sided process, benefiting the corporations mandating it. https://www.citizen.org/article/mandatory-arbitration-clauses-are-discriminatory-and-unfair/

The Eleventh Circuit Court of Appeals in Atlanta issued their opinion in this case on September 5, 2024, upholding the lower Florida District Court’s ruling that military timeshare buyers are “covered borrowers” under the Military Lending act MLA. The ruling affirmed Judge Roy B. Dalton Jr.'s order in the Middle District of Florida, denying Westgates's motion to compel active duty servicemembers to arbitrate their MLA claims against Westgate.

Excerpts from the Writ of Certiorari filed in the Supreme Court of the United States on behalf of petitioners EMMANUEL G. LOUIS and TAMARAH C. LOUIS v. BLUEGREEN VACATIONS UNLIMITED, INC., and BLUEGREEN VACATIONS CORPORATION, Respondents. Citations omitted. Emphasis added. 

QUESTION PRESENTED 

Do plaintiffs who paid money under a void contract have Article III standing to challenge the enforcement of that contract and seek restitution of their payment in federal court? 

The question presented is particularly important to service members—and the military itself. “Under the Uniform Code of Military Justice, military personnel that do not meet their financial commitments may be subjected to confinement, security clearance revocation, court martial, transfer, or even discharge.” 

During the Iraq War, “thousands of U.S. troops” were “barred from overseas duty because they were so deep in debt they were considered security risks.” 

A Navy study had found that “financial reasons” accounted for 80% of security clearance revocations and denials, and that debt-related denials had jumped nearly 850% in just three years. 

INTRODUCTION 

Congress passed the Military Lending Act (Oct, 2006) because unscrupulous lenders were specifically targeting service members—leading soldiers and sailors to fall into debt, lose their security clearances, and in some cases, be discharged from the military entirely. Congress determined that predatory lending poses such a great risk to our national defense that it not only prohibited several provisions characteristic of predatory loans; it mandated that any loan to a service member that contains any of these provisions is “void from the inception.” 

Those seeking to avoid the enforcement of these void contracts must file a lawsuit to do so. But the circuits are split over federal courts’ power to hear these lawsuits. Specifically, the courts of appeal disagree about whether a person who has paid money under a void contract has Article III standing to challenge the enforcement of that contract and seek their money back. The Second, Eighth, and Ninth Circuits have held that they do. Those courts reason that a party challenging a void contract meets all three of the well-established standing requirements: They have been injured by paying money they do not owe; that injury is traceable to the defendant, who enforced the void contract and collected the money; and the injury can be redressed by a court order requiring that the payment be returned and prohibiting future collection efforts. That, these courts hold, is all that’s necessary for standing. 

The Eleventh Circuit, however, has rejected this approach. According to the Eleventh Circuit, where a plaintiff challenges the enforcement of a void contract, it is not enough that they have suffered an injury traceable to the defendant and redressable by the court. They must also show that their injury is traceable to the specific statutory provision that the defendant allegedly violated. This additional requirement has no basis in the Constitution’s text or this Court’s precedent. To the contrary, this Court has held that a plaintiff’s injury need only be traceable to the defendant, not the specific statutory provision the defendant violated. 

Not long after Private Emmanuel Louis joined the army, Bluegreen Vacations pressured him and his wife into signing a contract for a loan that would fund future vacations at Bluegreen properties. Bluegreen charged $11,950, including a “down payment” of $1,150. Bluegreen required Private Louis to open a Bluegreen branded credit card account. The remaining amount was financed by a loan from Bluegreen. That loan obligates the Louises to pay Bluegreen $25,573.60.  

As soon as Private Louis was able to actually read the documents, he tried to cancel. Bluegreen refused. The Louises sued. They alleged that Bluegreen’s loan violates the Military Lending Act in several ways: Bluegreen misrepresented the interest rate, it failed to provide the written and oral disclosures the statute requires, and its contract contains an arbitration clause, which the Military Lending Act explicitly prohibits. Therefore, Bluegreen’s loan contract was “void from the inception of such contract.” But the district court dismissed the complaint. 

In the Second, Eighth, and Ninth Circuits, the Louises would have been permitted to proceed with their lawsuit. They suffered a traditional pocketbook injury (they paid money); caused by the defendant’s conduct (Bluegreen’s collection on a void loan); that’s redressable by the relief they seek (rescission of the contract and restitution of their payment). But the Eleventh Circuit held that the Louises lacked standing because they did not allege that their injury was traceable to the specific provisions of the Military Lending Act that Bluegreen violated. 

It should not be that when service members stationed in California or Missouri are targeted with these predatory loans, they can go to court to prevent their enforcement, while service members in Georgia or Florida cannot. 

Service members should not be subject to one set of rules when they are stationed in one state and another when they are stationed elsewhere. This split cannot stand. 

If Private Louis had been at Camp Pendleton in California or Fort Leonard Wood in Missouri, when he took out Bluegreen’s loan, he could have challenged it in federal court. But because he was in Florida when Bluegreen targeted him, Bluegreen can continue to enforce a loan Congress has declared illegal—without any concern that a federal court will stop it.

REASONS FOR GRANTING THE PETITION

Three circuits have held that plaintiffs who allege they made payments on a void contract have Article III standing—without requiring that the plaintiff’s harm stem from the specific statutory provision that the defendant allegedly violated. The Eighth Circuit held that these allegations were sufficient to support standing. The Second Circuit has held the same. In Dubuisson v. Stonebridge Life Insurance Company, The Ninth Circuit has come to the same conclusion. 

As the Eighth Circuit explained, the only questions that are relevant to standing are “whether the plaintiff has properly alleged an injury that is fairly traceable to the named defendants, and whether that injury can be redressed by a judgment against those defendants.” 

Where a plaintiff alleges that they have made payments on a void contract, the Second, Eighth, and Ninth Circuits hold, the answers to those questions are yes. 

In grafting this additional requirement onto the standing inquiry, the Eleventh Circuit has done precisely what the Second Circuit has warned against: expanded the “scope of judicial authority” to undermine what should be “legislative decisions,” implicating the very separation of powers concerns that give rise to standing doctrine in the first place. 

This Court should grant review not just to resolve the circuit split and reject the Eleventh Circuit’s novel traceability requirement, but to ensure that all service members—no matter where they’re stationed—have the protections that Congress and the Defense Department have concluded are crucial to our national defense. 

CONCLUSION 

This Court should grant certiorari. 

In support of the Steines Military Plaintiffs, an AMICUS CURIAE was filed in SUPPORT OF PLAINTIFFS-APPELLEES Steines AND AFFIRMANCE by the CONSTITUTIONAL ACCOUNTABILITY CENTER 

The Constitutional Accountability Center is a think tank and public interest law firm dedicated to fulfilling the progressive promise of the Constitution’s text.

The following organizations filed Amicus Briefs in Support of Military Timeshare Buyers in Louis vs. Bluegreen: 

The Consumer Financial Protection Bureau and the Federal Trade Commission

THE MILITARY OFFICERS ASSOCIATION OF AMERICA, (“MOAA”) is the nation’s largest and most influential association of military officers. It is an independent, nonprofit, politically nonpartisan organization.

THE JEWISH WAR VETERANS OF THE UNITED STATES OF AMERICA, is the oldest active national veterans’ service organization in America. Incorporated in 1924 and chartered by an act of Congress in 1983.

THE BLUE STAR FAMILIES, Inc. was founded in 2009 by military spouses to strengthen and empower military and Veteran families to thrive as they serve. 

JACKSONVILLE AREA LEGAL AID, Inc. (“JALA”) serves an area with multiple military bases, and it frequently represents people in military lending cases that are referred to JALA by the U.S. Navy Judge Advocate General and others. 

THE UNITED STATES ARMY WARRANT OFFICERS ASSOCIATION is a veterans service organization that was incorporated as a nonprofit organization in 1974 devoted to the welfare of army warrant officers—serving, former, and retired—and their families.

THE NATIONAL MILITARY FAMILY ASSOCIATION is a nonprofit organization founded in 1969. It is a voice for military families representing all ranks and services. 

THE FIVE STAR VETERANS CENTER is a nonprofit that provides combat veterans the services and support they need to succeed in civilian life. Indebtedness can exacerbate many of the hardships veterans face, including mental health issues and housing insecurity.

Related pending Military Lending Act cases: 

Angelique Lingard et al. v Holiday Inn Club Vacation fka Orange Lake. Middle District of Florida, Case No. 6:23-cv-323-PGB-RMN Judge Sneed - pending ruling on motion to recon order denying 12b6 motion - Stearns Weaver on Defense.

Heather Huskey et al v Travel & Leisure, Wyndham, Florida Middle District, Case No. 6:23-cv-601 Judge Mendoza - stayed at pleadings stage pending the Steines ruling - Carlton Fields on defense. 

Who’s fighting for our service members? A few of the attorneys involved:

National Association of Consumer Advocates, Washington DC

Ira Rheingold is NACA’s executive director. Ira has testified before both houses of Congress on various mortgage lending and consumer finance issues, offered commentary before federal agencies charged with regulating financial service industries and protecting consumers, and helped draft amicus briefs on issues of great concern to consumers before the nation’s highest courts. https://www.consumeradvocates.org/

Gupta Wessler LLP is a national appellate and complex litigation boutique. We brief andargue high-stakes cases in the U.S. Supreme Court and state and federal courts across the country. We also run the Harvard Supreme Court Litigation Clinic. Through all of our efforts, we aim to help shape the law in ways thatenhance justice and improve people's lives. https://www.guptawessler.com/

Jennifer Bennett is a principal at Gupta Wessler LLP, where she heads the firm's San Francisco office and focuses on cutting-edge public interest and plaintiff's-side appellate litigation. Her practice covers a wide range of issues including workers' rights, consumer protection, civil rights, constitutional law, and government transparency.   

JANET R. VARNELL, VARNELL & WARWICK, P.A. 

Our law firm strives to protect the Little Guy. Truth is, once you shine a light on corporate wrongdoing, consumer manipulation and abuse of power,justice still prevails. We use the class action device along with consumer protection laws and complex litigation strategies to combine the strength of consumers together to stand up for what is right. We are one of the only firms in the state of Florida dedicated exclusively to consumer protection and we have been recognized for our expertise. https://vandwlaw.com/