A long-running dispute between car-title loan giant TitleMax and a group of rival lenders has settled after a Fulton County judge denied several cross motions for summary judgment last month.
The sprawling conflict, which spawned litigation in Georgia, South Carolina and Texas, originally centered on claims that TitleMax used vehicle registration information to target competitors’ customers and paid their employees for referrals but grew to include cross-claims of deceptive advertising and conspiracy.
It also resulted in TitleMax’s original counsel, Greenberg Traurig, being disqualified from the case because it had previously represented a key plaintiff, Select Management Resources. SMR also sued Greenberg in short-lived litigation that settled in 2017.
The litigation began in 2014 when more than two dozen lenders and brokers sued TitleMax Finance Holdings Inc. and several affiliates in Fulton County Superior Court in state courts in Texas and South Carolina. The latter cases have since been dismissed.
The plaintiff companies were all under the corporate umbrella of an Alpharetta company, Select Management Resources, but the lead plaintiff is Drummond Financial Services.
The Fulton complaint said TitleMax illegally accessed Department of Motor Vehicle databases to obtain loan information to solicit the plaintiffs’ customers, entered the plaintiff companies’ places of business to solicit customers there and offered money to their employees for diverting customers to it.
The complaint included claims for misappropriation of trade secrets, unfair competition, tortious interference with prospective contracts and business relationships, trespass and civil conspiracy.
TitleMax filed counterclaims accusing some of the plaintiffs of violating the Georgia Pawnshop Act by using the word “loan” in their advertising and said use of the word also constituted false and misleading advertising under the federal Lanham Act. It also accused some of the Georgia-based plaintiffs of violation the state Deceptive Trade Practices Act.
TitleMax also accused some of the plaintiffs of sending agents into its affiliates’ offices to illegally gather trade secrets, and it brought claims including trespass, misappropriation of trade secret racketeering, conversion and civil conspiracy.
In 2015, now-Senior Judge John Goger enjoined TitleMax from using DMV records to solicit new business, from entering its competitors businesses or from paying their employees for referrals.
The parties engaged in lengthy motions practice and discovery in the ensuing years, including trips to the state Court of Appeals and Supreme Court as TitleMax fought the injunction, which was partly overturned.
Both sides filed motions for partial summary judgment on various claims.
Last month, Goger declined to find for TitleMax on its Lanham Act and Georgia Pawnshop Act claims, finding that “questions of material fact preclude summary judgment.”
“Although there may be material distinctions between title pawns and traditional loans, [the plaintiffs’] use of the word ‘loan’ in advertising is not literally false on its face and whether it is misleading or likely to deceive consumers remains a jury question,” Goger wrote.
Goger also allowed TitleMax’s civil conspiracy claim based on alleged Lanham Act violations to survive, but he threw out those based on alleged violations of the Georgia Uniform Deceptive Trade Practices Act.
Both sides filed a dismissal of all claims with prejudice on April 15.
The plaintiffs were represented by a cadre of Wargo French lawyers including Joseph Wargo, Arthur Brannan, Ashley Escoe, David Pernini, John Matthews, Nicola Gelormino, James McCaughan, Jeffrey Williams and Scott Laes.
Wargo said he could not comment on the settlement.
TitleMax and its affiliates are represented by BakerHostetler lawyers R. Jason D’Cruz, S. Derek Bauer, Jeffrey Baxter, Kevin Bradberry, Jacqueline Menk, Joshua Thomas, Thomas Donaho and Gilbert Keteltas.
Bauer, too, said he could not discuss the settlement.