Newspaper Focuses On Legislator’s Role While Parties Battle Over Possible Dismissal of Settlement Factoring Lawsuit

Newspaper Focuses On Legislator’s Role While Parties Battle Over Possible Dismissal of Settlement Factoring Lawsuit

As the parties to a putative class-action battle over whether a case involving structured settlement factoring should be dismissed, the dispute has drawn additional attention from a news publication that has underscored the fact that one of the defendants is a Virginia legislator. In this action, Plaintiffs allege that a Virginia lawmaker, Stephen Heretick, and several Virginia state court judges were complicit in a scheme to defraud personal injury victims.

As reported today by the Virginia Pilot, this scheme involved an effort to lure personal injury victims with structured settlement payment rights to sell those rights for pennies on the dollar through offers of gifts, cash advances, sporting events, nights at bars, and strip club visits.

Plaintiffs’ ten count complaint includes claims of deprivation of due process, violations of the Racketeer Influence and Corrupt Organizations Act (RICO), as well as conspiracy to violate RICO, unjust enrichment, and seeks a constructive trust. You may see more about the class-action complaint here.

Plaintiffs’ allegations have been called “appalling” by an attorney representing Mr. Heretick, and all defendants in the action have moved to dismiss the claims, asserting that the court lacks subject matter jurisdiction based on the application of the Rooker-Feldman doctrine, whereby federal courts may not entertain claims brought by state-court losers seeking rejection of the state court judgment. Defendants have also moved to dismiss on the grounds that Plaintiffs’ claims fail to state a claim upon which relief can be granted, including a failure to allege a plausible RICO violation, and failure to allege a viable claim for violation of due process.

Plaintiffs’ response to the defendants’ motions to dismiss is due today, February 2, 2018. Plaintiffs may point to a recent decision in SAF Funding, LLC v. Taylor, Case No. CL-3022, 2017 Va. Cir. LEXIS 316 (Va. Cir. Ct. Oct. 27, 2017), in which a Virginia Circuit Court ruled that the payee would be allowed to try to prove his claim that similar Virginia court orders approving transfers of structured settlement payment rights were void ab initio due to fraud. See more about SAF Funding, LLC v. Taylor here.

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