Rent-A-Center Prepares Strong Case for High Court

Sophistry is defined as "the practice of using arguments which seem clever but are actually false and misleading." In her brief to the Massachusetts Supreme Judicial Court on behalf of Rent-A-Center, Beth Boland, partner in the Boston office of Bingham McCutchen, sets the record straight and accurately describes the plaintiff's case in Joy Silva and Jaaziel Costa v. Rent-A-Center as "fanciful sophistry."

Beth Boland (see bio below) will be arguing the case before the Court on behalf of Rent-A-Center. Oral arguments begin Tuesday, June 9th 2009, 9:00 AM EST.

While Rent-A-Center's name may be on the docket, make no mistake, this case affects the entire rent-to-own industry. RTO Online will broadcast the court's video feed live on our homepage (www.rtoonline.com). Arguments typically last 30 minutes - 15 minutes per side.

In her brief submitted to the Court on behalf of Rent-A-Center, Boland described the plaintiff's case:

"Plaintiffs' argument is built on the proposition that Massachusetts legislature, in passing the CLA, intentionally omitted the word "initial" in an effort to exclude rent-to-own and cover only very short-term leases that exceed seven days and may not exceed four months, including all renewals and extensions. This is fanciful sophistry at best, clearly undermined by silence on a telling point: plaintiffs cite no case, no article, no regulation, not even a consumer advocacy group publication supporting their position. Instead, authorities from all sides, including the Massachusetts Practice Series authors, the Attorney General, the Division of Banks, noted professors and scholars, and even consumer advocates who regularly oppose the rent-to-own industry, have consistently agreed for more than 20 years that the Massachusetts CLA governs rent-to-own transactions in this state."

Boland points out in the brief that Massachusetts' Attorney General already recognizes that the CLA is intended to apply to leases with an initial term of four months or less. In the regulations addressing the advertisement of rent-to-own transactions, the Attorney General herself characterizes rent-to-own transactions as leases, and treats them differently than installment sales. From the brief: More to the point, in so doing the Attorney General treats leases "for any minimum period of less than four month" as subject to the CLA, despite the absence of the term in the CLA. This directly refutes Plaintiffs' central theme about the missing word "initial."

Plaintiffs cite cases in three other jurisdictions - New Jersey, Wisconsin, and Minnesota - presumably, says Boland in the court brief, "...because they find no support for their argument under Massachusetts law." Reliance on decisions in Wisconsin, she adds, is misplaced. "Wisconsin defines 'credit sale' as a transaction in which the consumer 'agrees to pay or pays' an amount substantially equal to the value of the property. Wisconsin courts have interpreted the 'or pays' language to mean that an obligation to pay is not required if payment actually occurs. Wisconsin courts have not held that all rent-to-own transactions are 'credit sales'."

Boland states in the brief that both the National Consumer Law Center (NCLC) and the Public Interest Research Group (PIRG) acknowledge that rent-to-own agreements in Massachusetts are governed by the CLA. "The NCLC states in its own publications that the CLA regulates rent-to-own transactions in Massachusetts, and its former managing attorney, Margot Saunders, testified to that effect before Congress. In its amicus brief in briefing to the New Jersey Supreme Court, the NCLC repeated that the CLA governed rent-to-own in Massachusetts. Likewise, the United States Public Interest Research Group (PIRG), which has an active branch in Massachusetts, recognizes that there are only four states that regulate rent-to-own transactions as credit sales; New Jersey, Wisconsin, Minnesota, and Vermont. If Plaintiffs' argument is correct, then the Attorney General, the Division of Banks and everyone of these professors, scholars and consumer advocates has misinterpreted the CIA for more than 20 years."

Boland reminds the court in her brief that the CLA is intended to protect consumers. "Plaintiffs ask the Court to broadly interpret RISA in order to protect consumers. While consumer protection does not validate Plaintiffs' attempt to put a square peg in a round hole, it is certainly true that consumer protection statutes should be liberally construed. However, the CLA is also a consumer protection statute."

If Plaintiffs are correct, states Boland, then the CLA serves no real purpose, "...because there are few, if any, consumer lease transactions that cannot be renewed beyond four months. Interpreting RISA and the CIA as Plaintiffs suggest would not effectuate the protection of consumers; it would instead suspend a long and consistent regulatory history with which RAC and its competitors have, in good faith, complied for nearly a quarter of a century in accordance with consistent interpretations by the Attorney General, the Division of Banks, the Practice Series, learned scholars and consumer advocates alike."

According to Rent-A-Center, a rent-to-own transaction offers unique options, benefits and services to the consumer and is substantively different from an installment sale. In its brief to the Court, Rent-A-Center claims the CLA is a comprehensive regulatory statute, and the contract at issue precisely meets the statute's definition of a "consumer lease." A conclusion that the CLA does not apply to rent-to-own transactions would "undermine the CLA and frustrate legislative intent."

Court documents relating to the case give a fascinating glimpse into the decades-old misunderstanding of the rental-purchase transaction. RTO Online has converted both sides' court briefs into OCR PDFs - allowing text based searching of the documents.

About Beth Boland
Active on many fronts in the legal community, Beth co-chaired the Boston Bar Association (BBA) Task Force on Corporate Governance and was appointed by the Chief Justice of the Trial Court to co-chair the Massachusetts Superior Court Business Litigation Session Resource Committee from 2001–2007. As one of the youngest presidents of the Women's Bar Association of Massachusetts, Beth is considered a pioneer on issues affecting women in the profession and was recently named one of the top 50 Massachusetts female lawyers by Boston magazine. She is a co-author of a WBA report on part-time work, "More Than Part-Time," which received national attention, and has served on a variety of nonprofit boards and received numerous awards for her work in this area.

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