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Jax Daily Record Monday, Jul. 11, 200512:00 PM EST

Stopping payday loans a team effort for JALA team effort for JALA

by: Bradley Parsons

by Bradley Parsons

Staff Writer

In Lynn Drysdale’s line of work she needs to know the flip, the fan and the five-finger spread.

That’s a skill set that sounds more at home in a Las Vegas casino than a law office. But for Drysdale, a consumer attorney with Jacksonville Area Legal Aid, the knowledge is essential to stay a step ahead of an increasing number of scams designed to separate her clients from their money.

Drysdale sounded like a card shark as she ran down the list of maneuvers used by unscrupulous money lenders to distract people’s attention from the documents they sign.

The flip refers to a quick shuffling through of a multi-page contract; the fan spreads the pages out like a gin rummy hand, obscuring parts of the contract; the five-finger spread uses the hand to cover the text while directing the borrower to the signature line.

Drysdale’s unique knowledge was gained through 17 years of experience handling consumer cases. Increasingly, she said she spends most of her time trying to help her clients — JALA provides free legal help to those with qualifying low incomes — undo the damage done by techniques like those described above. Her second-floor office is buried under mounds of case files and barely-legal contracts.

Drysdale has expertise in surplus, what she lacks is the time and staff to handle an overwhelming workload. That’s why, in an office snowed under by paperwork, she values one stack above all others. An inch-thick roster of more than 600 local attorneys who offer pro bono help to JALA makes an impossible caseload manageable and provides Drysdale’s low-income clients with some of Jacksonville’s top legal talent.

“You have attorneys in here that bill $300 an hour,” said Drysdale, clutching her roster with both hands. “The big firms send people with incredible skills to help us. It provides the average Joe with expert legal representation and increases the scope of who we can help.”

The collaboration has paid off with some notable victories for JALA’s clients. Drysdale and Holland & Knight attorney Buddy Schulz worked together to shut down in June four Jacksonville payday loan offices that had been targeting military members and their families.

The case against Florida Internet, the loan provider, and owner John Gill was equal parts effective litigation and legal education for Drysdale.

“He’s an amazing litigator,” said Drysdale about Schulz. “I don’t know where else I could have got that type of legal education than working next to him.”

For his part, Schulz said he benefited from Drysdale’s elbow-deep experience in consumer law. Schulz, a Florida Bar certified trial lawyer, now serves full-time on Holland & Knight’s Community Service Team, which focuses exclusively on pro bono work.

The firm’s commitment to pro bono work carries practical benefits. The cases often take attorneys from the mainstream firms into unfamiliar territory.

“Pro bono work is the right thing to do, but it’s also an area to get our young attorneys hands-on experience. There’s no question they come back as better attorneys,” said Schulz. “It’s a huge benefit to work with JALA and a lawyer like Lynn. She’s an expert in this area of the law and helps you pick up the nuances.”

The Florida Internet case provides an example of the JALA advocacy system firing on all cylinders. Drysdale was first alerted to the operation by on-base advocates at Naval Air Station Mayport. They reported an internet service provider that was offering contracts suspiciously similar to payday loans.

Florida law tightly regulates the terms of those kinds of loans, which essentially offer cash advances on future paychecks at interest rates that often exceed three figures. Setting the operation up as an internet service allowed Gill to dodge the State’s usury laws, said Drysdale.

In a typical transaction, a borrower would sign a contract with Gill to buy $360 worth of internet service. The borrower would provide a post-dated check and receive an immediate $300 rebate. If the borrower couldn’t cover the amount of the check on the date of the check, Florida Internet would charge a $60 fee and roll the debt over for another two weeks.

“If you don’t have $300 this week, it’s pretty unlikely you’re going to be able to pay $360 in two weeks,” said Drysdale.

Like many of Florida Internet’s customers, Drysdale’s clients, Debbie Hickman and John Bartholomew, found themselves trapped in an endless cycle of $60 payments while their principal never budged. According to the case brief, Hickman paid back $290 before she discovered that she hadn’t made a dent in her original $360 debt.

Shortly after the case came across Drysdale’s desk, she contacted Schulz who had expressed an interest in handling some large-scale litigation for JALA. Drysdale knew the Florida Internet case could fit the bill since it had the potential to evolve into a class action suit.

“What he was doing to them, he was doing to all of his customers,” said Drysdale. “In a class action we’re asking the court to say our clients are bringing the suit on behalf of everyone who signed these contracts.”

Many of those signatures belonged to military members. Payday loan operations often target the military because its members receive steady paychecks and are bound by military regulations to pay their debts on time.

“This case is an excellent example of how military personnel are taken advantage of,” said Schulz. “They’re literally preyed upon by these financial institutions.”

The focus on the military provided some extra motivation to Schulz and to his assistant, summer associate Sarah Stoddard, both former Army officers. Schulz said he selected Stoddard to work on the case partly because of her military experience. Working on her first case during her first summer clerkship at a law firm, Stoddard had her military service in mind as she compiled the inch-thick brief that presented Hickman and Bartholomew’s case to the court.

But her primary motivation came from wanting to put a stop to an illegal practice that was taking money from those who could least afford it. Stoddard and Schultz are still working with Drysdale to make the temporary injunction against Gill permanent. They will also pursue damages on behalf of their clients and others. Since the injunction was granted in June, Drysdale said she’s received a steady stream of phone calls from people who say they were similarly duped.

Of course shutting the operation down makes it less likely that Florida Internet will have money to pay those damages, but Drysdale said stopping the loans is the first priority.

“The reason my clients got involved in this was that they wanted it to stop. Not just for them. They wanted to protect others,” said Drysdale.

And Drysdale remains thankful for the help she receives from firms like Holland & Knight.

“Without their help, I couldn’t have thought about putting on a case of this caliber,” she said. “I would have had to give up 30 other cases.”

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