Menus Subscribe Search

Follow us



USA Discounters. (Photo: Mike Kalasnick/Flickr)

The Gaps in Federal Law That Are Making It Easy for Lenders to Sue Soldiers

• August 01, 2014 • 4:00 PM

USA Discounters. (Photo: Mike Kalasnick/Flickr)

Courts are required to appoint attorneys for service members if they are sued and can’t appear. But the law says little about what those lawyers must do. Some companies have taken advantage.

The law is clear: When far-flung members of the U.S. military are sued in civil court, judges must at least appoint lawyers for them.

But that basic layer of protection hasn’t provided much help to the hundreds of service members sued in Virginia courts each year by high-cost lender USA Discounters.

The state routinely allows plaintiffs like USA Discounters to suggest which lawyers should be appointed. Moreover, the federal Servicemembers Civil Relief Act (SCRA) doesn’t detail what those attorneys must do or how much they’ll be paid for doing it.

Practically speaking, military legal experts say, that means the attorneys often don’t do much at all.

When far-flung members of the U.S. military are sued in civil court, judges must at least appoint lawyers for them.

An examination of recent USA Discounters’ cases shows the company typically chooses local attorney Tariq Louka to represent service members, many of whom are on active duty and unable to get to court. For his $35 fee, Louka sends each of these clients an identical letter advising them of their rights under the SCRA to have their case delayed if they can’t appear. But that’s it.

A fee that “absurdly low” shows that the attorney “does not plan on doing anything more than generating a form letter,” said John Odom, a retired judge advocate who has testified before Congress about the SCRA.

Louka’s fee is charged to the defendants if the company wins a judgment—and the company almost always does.

ProPublica reviewed 11 USA Discounters cases in which Louka had a role. If the service member didn’t respond to Louka’s letter, as occurred in 10 cases, he informed the court that his work was done and the case should proceed. He doesn’t typically try to call clients, Louka wrote in an email in response to questions from ProPublica.

Even service members who respond to the letter get little or no representation beyond that. Army Staff Sergeant David Ray was sued by USA Discounters in 2013 while stationed in Germany. Court records show he wrote to Louka to say he’d followed the company’s “instructions to the letter,” and the suit was unnecessary. Ray also wrote that he didn’t think he’d ever be able to attend a hearing. Louka did not respond, according to Ray and the case file. Instead, he recommended that the suit proceed because Ray had “stated that he is not disputing this debt.” Louka told ProPublica that he could not discuss any client’s case without a written waiver. Ray, who remains on active duty, could not subsequently be reached to provide one.

Louka said he performs what he believes are his obligations under the law and the courts have broadly accepted his interpretation.

Other attorneys in the area have a similarly bare bones take on the law’s duties. Freedom Furniture and Electronics also sues a large number of service members in Virginia courts. In three Freedom suits examined by ProPublica, Virginia Beach attorney William Parkhurst was appointed. In a 2011 letter to a service member, Parkhurst, who charges $75 per case, used much of the same language as Louka. Parkhurst declined to respond to questions.

SCRA experts say that attorneys appointed to represent service members should do much more, including examining the case file, attempting contact by phone and other means, and advising service members that there might be a defense to the suit.

“If you don’t tell them what their rights are, then you’re doing them a disservice,” said Dwain Alexander, a civilian attorney with the Navy.

The law currently does not spell out these duties, said Mark Sullivan, a former judge advocate. “I think that’s really important.”

usa-discountersRELATED STORY

Thank You for Your Service: How One Company Sues Soldiers Worldwide


This post originally appeared on Mosaic as “For Lenders, Gaps in Federal Law Make Suing Soldiers Easy” and is republished here under a Creative Commons license.

Paul Kiel

A weekly roundup of the best of Pacific Standard and, delivered straight to your inbox.

Recent Posts

October 31 • 8:00 AM

Who Wants a Cute Congressman?

You probably do—even if you won’t admit it. In politics, looks aren’t everything, but they’re definitely something.

October 31 • 7:00 AM

Why Scientists Make Promises They Can’t Keep

A research proposal that is totally upfront about the uncertainty of the scientific process and its potential benefits might never pass governmental muster.

October 31 • 6:12 AM

The Psychology of a Horror Movie Fan

Scientists have tried to figure out the appeal of axe murderers and creepy dolls, but it mostly remains a spooky mystery.

October 31 • 4:00 AM

The Power of Third Person Plural on Support for Public Policies

Researchers find citizens react differently to policy proposals when they’re framed as impacting “people,” as opposed to “you.”

October 30 • 4:00 PM

I Should Have Told My High School Students About My Struggle With Drinking

As a teacher, my students confided in me about many harrowing aspects of their lives. I never crossed the line and shared my biggest problem with them—but now I wish I had.

October 30 • 2:00 PM

How Dark Money Got a Mining Company Everything It Wanted

An accidentally released court filing reveals how one company secretly gave money to a non-profit that helped get favorable mining legislation passed.

October 30 • 12:00 PM

The Halloween Industrial Complex

The scariest thing about Halloween might be just how seriously we take it. For this week’s holiday, Americans of all ages will spend more than $5 billion on disposable costumes and bite-size candy.

October 30 • 10:00 AM

Sky’s the Limit: The Case for Selling Air Rights

Lower taxes and debt, increased revenue for the city, and a much better use of space in already dense environments: Selling air rights and encouraging upward growth seem like no-brainers, but NIMBY resistance and philosophical barriers remain.

October 30 • 9:00 AM

Cycles of Fear and Bias in the Criminal Justice System

Exploring the psychological roots of racial disparity in U.S. prisons.

October 30 • 8:00 AM

How Do You Make a Living, Email Newsletter Writer?

Noah Davis talks to Wait But Why writer Tim Urban about the newsletter concept, the research process, and escaping “money-flushing toilet” status.

October 30 • 6:00 AM

Dreamers of the Carbon-Free Dream

Can California go full-renewable?

October 30 • 5:08 AM

We’re Not So Great at Rejecting Each Other

And it’s probably something we should work on.

October 30 • 4:00 AM

He’s Definitely a Liberal—Just Check Out His Brain Scan

New research finds political ideology can be easily determined by examining how one’s brain reacts to disgusting images.

October 29 • 4:00 PM

Should We Prosecute Climate Change Protesters Who Break the Law?

A conversation with Bristol County, Massachusetts, District Attorney Sam Sutter, who dropped steep charges against two climate change protesters.

October 29 • 2:23 PM

Innovation Geography: The Beginning of the End for Silicon Valley

Will a lack of affordable housing hinder the growth of creative start-ups?

October 29 • 2:00 PM

Trapped in the Tobacco Debt Trap

A refinance of Niagara County, New York’s tobacco bonds was good news—but for investors, not taxpayers.

October 29 • 12:00 PM

Purity and Self-Mutilation in Thailand

During the nine-day Phuket Vegetarian Festival, a group of chosen ones known as the mah song torture themselves in order to redirect bad luck and misfortune away from their communities and ensure a year of prosperity.

October 29 • 10:00 AM

Can Proposition 47 Solve California’s Problem With Mass Incarceration?

Reducing penalties for low-level felonies could be the next step in rolling back draconian sentencing laws and addressing the criminal justice system’s long legacy of racism.

October 29 • 9:00 AM

Chronic Fatigue Syndrome and the Brain

Neuroscientists find less—but potentially stronger—white matter in the brains of patients with CFS.

October 29 • 8:00 AM

America’s Bathrooms Are a Total Failure

No matter which American bathroom is crowned in this year’s America’s Best Restroom contest, it will still have a host of terrible flaws.

October 29 • 6:00 AM

Tell Us What You Really Think

In politics, are we always just looking out for No. 1?

October 29 • 4:00 AM

Racial Resentment Drives Tea Party Membership

New research finds a strong link between tea party membership and anti-black feelings.

October 28 • 4:00 PM

The New Health App on Apple’s iOS 8 Is Literally Dangerous

Design isn’t neutral. Design is a picture of inequality, of systems of power, and domination both subtle and not. Apple should know that.

Follow us

We’re Not So Great at Rejecting Each Other

And it's probably something we should work on.

Chronic Fatigue Syndrome and the Brain

Neuroscientists find less—but potentially stronger—white matter in the brains of patients with CFS.

Incumbents, Pray for Rain

Come next Tuesday, rain could push voters toward safer, more predictable candidates.

Could Economics Benefit From Computer Science Thinking?

Computational complexity could offer new insight into old ideas in biology and, yes, even the dismal science.

Politicians Really Aren’t Better Decision Makers

Politicians took part in a classic choice experiment but failed to do better than the rest of us.

The Big One

One town, Champlain, New York, was the source of nearly half the scams targeting small businesses in the United States last year. November/December 2014

Copyright © 2014 by Pacific Standard and The Miller-McCune Center for Research, Media, and Public Policy. All Rights Reserved.