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Mike Lindell gives a thumbs up as he passes by a rally for supporters of former President Donald Trump, Tuesday, April 4, 2023, in West Palm Beach, Fla. (AP Photo/Wilfredo Lee).
A financial services company being sued by MyPillow — and the company’s CEO Mike Lindell — for usury recently filed a strongly-worded motion to dismiss after removing the case to federal court.
Originally, the lawsuit against Lifetime Funding was filed by Lindell and various associated corporate entities in Carver County, Minnesota. The complaint alleges the lending company violated federal and state law by way of the onerous terms of a $600,000 merchant cash advance. Under the terms of that agreement signed in September 2024, Lindell and his company must pay back $16,800 each day.
Now, Lifetime Funding has fired back, in a memorandum in support of their motion to dismiss for failure to state a claim, saying the arrangement was not even a loan — and that, so far, Lindell has actually benefited financially from the transaction.
“Under the Agreement, Lifetime advanced My Pillow $563,965 in exchange for the right to collect a greater amount of My Pillow’s future receivables,” the Jan. 23, motion reads. “Ultimately, however, My Pillow remitted only $268,800 of its receivable before refusing to further perform. To date, therefore, My Pillow has gained $295,965 on the parties’ transaction. Apparently, this isn’t enough.”
In the October lawsuit, Lindell accuses Lifetime and others of violating federal racketeering (RICO) law and of issuing a usurious loan under the guise of a contract in order to skirt New York law.
The lender’s memo, in turn, rubbishes each of those claims as unfounded, using caustic language throughout, and ridicules the lawsuit for insisting Empire State usury statutes are applicable.
From the filing, at length:
Putting aside the absurdity of a party who gained $295,965 claiming damages, Plaintiffs’ RICO claim predicated on collection of unlawful debt fails. Under applicable law (Connecticut or Minnesota), the Agreement isn’t a loan subject to usury laws and, even if it were, it’s statutorily exempt from those laws. Indeed, even under New York law (which, for some reason, Plaintiffs claim to be applicable), the Agreement isn’t usurious. Plaintiffs, therefore, can’t establish the usury element of their RICO claim predicated on collection of unlawful debt and that claim fails. While Plaintiffs half-heartedly assert a RICO claim predicated on a pattern of racketeering, there are no concrete allegations to support that claim and it too fails.
Lindell has since filed at least three such lawsuits against similar companies. In each of those lawsuits, the pro-Donald Trump election denialist spends considerable space, time, and ink deriding the business model of the merchant cash advance industry.
To that end, Lindell’s lawsuits also accuse the companies of issuing loans to his once-thriving bedding company that are “unconscionable, and thus unenforceable.”
Lifetime, for their part, seeks to bin the notion that the contract law theory of unconscionability even applies in the present case.
“Plaintiffs’ unconscionability claim fails,” the memo reads. “Lindell is a world-famous businessman who, at one time, had access to the Oval Office and the ear of the President of the United States. He and My Pillow are highly sophisticated commercial actors with extensive business experience. They are the antithesis of the ‘commercially illiterate consumer’ that the doctrine of unconscionability was designed to protect.”
The doctrine is widely understood to encapsulate a situation where a party with greater bargaining power preys on the other party with a contract featuring extremely and unfairly one-sided terms.
Lifetime insists Lindell simply does not fit the mold.
“Respectfully, this is preposterous; Plaintiffs’ unconscionability claim fails and Plaintiffs’ Complaint should be dismissed with prejudice for failure to state a claim,” the memo goes on.
Whether or not the theory applies is now up for a judge to decide.
