The Wolf Law Firm, LLC 

1520 U.S. Hwy 130, Suite 101 

North Brunswick, NJ 08920 

(732) 545-7900 / fax: (732) 545-1030 

Williams Cuker Berezofsky 

Woodland Falls Corporate Center 

210 Lake Drive East, Suite 101 

Cherry Hill, NJ 08002 

(856) 667-0500 / fax: (856) 667-5133 

The Law Office of 

Christopher J. McGinn

75 Raritan Ave., Suite 220 

Highland Park, NJ 08904 

(732) 937-9400 / fax: (800) 931-2408 

Berns Weiss LLP 

100 N. 18th Street, Suite 300

Philadelphia, PA 19103

(267)-202-0749/ fax: (818)-999-1500

Attorneys for Plaintiff and the putative class 

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY 

MARGARET KORROW, on behalf of 

herself and others similarly situated, 

 

 Plaintiff 

 vs. 

AARONS, INC. and John Does 1-25 

 Defendant. 

Civil Action 

 Case No. 3:10-06317-MAS-LHG 

FILED UNDER SEAL 

PLAINTIFF’S BRIEF IN SUPPORT OF CROSS-MOTION FOR ORDER 

GRANTING CLASS CERTIFICATION AND IN OPPOSITION TO 

DEFENDANT’S MOTION TO DENY CLASS CERTIFICAITON

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TABLE OF CONTENTS 

TABLE OF AUTHORITIES .......................................................................................................... II 

INTRODUCTION AND CLASS DEFINITION............................................................................ 1 

STATEMENT OF FACTS ............................................................................................................. 2 

STATEMENT OF PROCEDURAL HISTORY ............................................................................. 5 

SUMMARY OF CLASS CLAIMS ................................................................................................ 6 

LEGAL ARGUMENT .................................................................................................................. 12 

I. THE PROPOSED CLASS AND SUB-CLASSES SATISFY RULE 23(A)’S REQUIREMENTS. ......... 12 

A. Class and Sub-Class Membership is Readily Ascertainable. ....................................... 12

B. The Class and Sub-Classes Satisfy Rule 23(a)(1)-(4). .................................................. 13

1. The Class and Sub-Classes are Sufficiently Numerous. ........................................... 13 

2. The Class and Sub-Classes’ Claims Raise Common Questions of Law and Fact. ... 15 

3. Plaintiff’s Claims are Typical of the Class and Sub-Classes. ................................... 18 

4. Plaintiff and Counsel Will Adequately Represent the Class and Sub-Classes. ........ 21 

C. Aaron’s’ Arguments for Denial of Class Certification Based Upon Rule 23(a) Fail. .. 22

1. Ascertainability ......................................................................................................... 22 

2. Commonality............................................................................................................. 26 

3. Typicality and Adequacy of Representation ............................................................. 28 

II. THE CLASS AND SUB-CLASSES SATISFY ALL REQUIREMENTS OF RULE 23(B)(3). ............. 36 

A. The Common Issues of Law and Fact Predominate as to All of Plaintiff’s and the 

Class’s and Sub-Classes’ Claims.......................................................................................... 36

1. Common Questions Predominate With Respect to the Class Claims Under 

TCCWNA. ........................................................................................................................ 36 

2. Common Questions Predominate With Respect to the Sub-Class Claims Under the 

CFA. .................................................................................................................................. 37 

3. Aaron’s’ Arguments Against Finding That Common Issues Predominate Fail as a 

Matter of Law and Fact. .................................................................................................... 39

B. A Class Action is Superior to Other Methods of Proceeding, as There is No Realistic 

Alternative to a Class Action for Class Members’ Small-Value Statutory Claims. .............. 41

C. Aaron’s’ Arguments Against Finding Superiority Based on its Possible Assertion of 

Unspecified Counterclaims Against Class Members Fails as a Matter of Law and Fact. ... 42

1. Aaron’s’ Speculative, Unfiled Counterclaims Cannot Be Used to Undermine Class 

Certification. ..................................................................................................................... 44 

2. Aaron’s’ Threatened Counterclaim is Not Compulsory. .......................................... 47 

3. Even if They Were Filed, the Court Should Decline to Exercise Jurisdiction Over 

Any State-Law Counterclaim. .......................................................................................... 50 

4. Even if Relevant, Aaron’s’ Claims Against Absent Class Members Would Be More 

Properly Addressed at the Damages Stage After Class-Wide Liability is Determined. ... 53 

5. Aaron’s’ Hired Expert’s Arguments Against Finding Superiority are Equally 

Baseless. ............................................................................................................................ 55 

CONCLUSION ............................................................................................................................. 56 

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TABLE OF AUTHORITIES 

Cases

Agostino v. Quest Diagnostics, 256 F.R.D. 437 (D.N.J. 2009) .................................................... 12 

Allen v. Holiday Universal, 249 F.R.D. 166 (E.D. Pa. 2008) ................................................. 33, 45 

Amchem Prod’s, Inc. v. Windsor, 521 U.S. 591 (1997) ................................................................ 36 

Ayres v. National Credit Mgmt Corp., 1991 U.S. Dist. LEXIS 5629 (E.D. Pa. 1991) ................. 48 

Baby Neal v. Casey, 43 F.3d 48 (3d Cir. 1994) .......................................................... 16, 27, 33, 43 

Barr v. Harrah’s Entertainment, Inc., 242 F.R.D. 287 (D.N.J. 2007).......................................... 31 

Barrow v. Chase Manhattan Mortg. Corp., 465 F. Supp. 2d 347 (D.N.J.2006) ............................ 9 

Beard v. King Appliance Co., 61 F.R.D. 434 (E.D. Va. 1973) ..................................................... 41 

Beck v. Maximus, Inc., 457 F.3d 291 (3d Cir. 2006) .................................................................... 19 

Bogosian v. Gulf Oil Corp., 561 F.2d 434 (3d Cir. 1977) ............................................................ 39 

Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 964 A.2d 741 (2009) ........................................ 38 

Brady v. C.F. Schwartz Motor Co., 723 F. Supp. 1045 (D. Del. 1989) ........................................ 48 

C.I.R. v. Bosch's Estate, 387 U.S. 456 (1967) .............................................................................. 10 

Cabrera v. Courtesy Auto, Inc., 192 F. Supp. 2d 1012 (D. Neb. 2002) ....................................... 48 

Carnegie v. Household Int’l, Inc. , 376 F. 3d 656 (7th Cir. 2004) ............................................... 42 

Casida v. Sears Holdings Corp., 2012 U.S. Dist. LEXIS 111599 (E.D. Cal. Aug. 8, 2012) ......... 2 

Channell v. Citicorp, 1996 U.S. Dist. LEXIS 14506, 1996 WL 563536 (N.D. Ill. September 27, 

1996) .................................................................................................................................. passim 

Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867 (1984) .......................................... 50 

Cox v. Sears Roebuck & Co., 138 N.J. 2, 647 A.2d 454 (1994) ............................................. 35, 47 

Donson Stores, Inc. v. American Bakeries Co., 58 F.R.D. 485 (S.D.N.Y. 1973) ................... 45, 48 

Dupler v. Costco Wholesale Corp., 249 F.R.D. 29 (E.D.N.Y. 2008) ....................................... 7, 36 

Eisenberg v. Gagnon, 766 F.2d 770 (3d Cir. 1985) ................................................................ 14, 36 

Flores v. Anjost Corp., 284 F.R.D. 112 (S.D.N.Y. 2012)....................................................... 13, 23 

Gooch v. Life Investors Ins. Co. of Am., 672 F.3d 402 (6th Cir. 2012) ........................................ 33 

Gunnells v. Healthplan Serv’s, Inc., 348 F.3d 417 (4th Cir. 2003) .............................................. 32 

Haynes v. Logan Furniture Mart, Inc., 503 F.2d 1161 (7th Cir. 1974) ............................. 40, 41, 42 

Heaven v. Trust Co. Bank, 118 F.3d 735 (11th Cir. 1997) ........................................................... 45 

Houbigant, Inc. v. Federal Ins. Co., 374 F.3d 192 (3d Cir. 2004) ............................................... 10 

In Re Community Bank of No. Va., 418 F.3d 277 (3d Cir.2005) .................................................. 36 

In re Ford Motor Co. Ignition Switch Prod. Liab. Litig., 174 F.R.D. 332 (D.N.J. 1997) ............ 41 

In re Prudential Ins. Co. of Am. Sales Pract’s Litig., 148 F.3d 283 (3d Cir. 1998) ............... 16, 19 

In re Sugar Industry Antitrust Litigation, 73 F.R.D. 322 (E.D. Pa. 1976) ................................... 49 

In re TFT-LCD (Flat Panel) Antitrust Litigation, 267 F.R.D. 583 (N.D. Cal. 2010), amended in 

part, 2011 U.S. Dist. LEXIS 84476, 2011 WL 3268649 (N.D. Cal., July 28, 2011) ................. 2 

In re Warfarin Sodium Antitrust Litig., 391 F.3d 516 (3d Cir. 2004) ........................................... 41 

Johnson v. Aronson Furniture Co., 1998 U.S. Dist. LEXIS 14454, 1998 WL 641342 (N.D. Ill. 

Sept. 11, 1998) .............................................................................................................. 45, 46, 47 

Kent Motor Cars, Inc. v. Reynolds and Reynolds, Co., 207 N.J. 428, 25 A.3d 1027 (N.J. 2011) .. 9 

Kleiner v. First Nat'l Bank of Atlanta, 97 F.R.D. 683 (N.D. Ga. 1983) ....................................... 36 

Lee v. Carter-Reed Co., LLC, 203 N.J. 496, 4 A.3d 561 (2010) .................................................. 38 

Lewis v. Curtis, 671 F.2d 779 (3d Cir. 1982) ............................................................. 21, 28, 31, 40 

Lewis v. Riddle, 1998 U.S. Dist. LEXIS 20465 (WD La., 1998) ................................................. 40 

Maldonado v. Houstoun, 177 F.R.D. 311 (E.D. Pa. 1997) ........................................................... 14 

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Marcus v. BMW of N. Am., LLC, 687 F.3d 583 (3d Cir. 2012) .................................................... 12 

McGarvey v. Penske Automotive Group, Inc., 639 F. Supp. 2d 450 (D.N.J.2009) ........................ 9 

New Directions Treatment Serv’s v. City of Reading, 490 F.3d 293 (3d Cir. 2007) .............. 28, 31 

New Jersey Citizen Action v. Schering-Plough Corp., 367 N.J. Super. 8, 842 A.2d 174 (App.Div. 

2003) ......................................................................................................................................... 38 

O’Sullivan v. Countrywide Home Loans, Inc., 202 F.R.D. 504 (S.D. Tex. 2001) ........................ 45 

Passeggio v. Cosmetique Inc., 1999 U.S. Dist. LEXIS 7607 (E.D.N.Y. Apr. 30, 1999) ............. 40 

Perez v. Rent-a-Center 186 N.J. 188, clarified, 188 N.J. 215, 902 A.2d 1232 (2006) .......... passim

Perry v. Beneficial Fin. Co. of N.Y., Inc., 81 F.R.D. 490 (W.D.N.Y. 1979) .................... 25, 26, 40 

Peterson v. United Accounts, Inc., 638 F.2d 1134 (8th Cir. 1981) ............................................... 48 

Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) ................................................................ 42 

Roper v. Consurve, Inc., 578 F.2d 1106 (5th Cir. 1978) .................................................. 45, 53, 54 

Sacred Heart Health Sys. v. Humana Military Healthcare Servs., 601 F.3d 1159 (11th Cir. 2010)

................................................................................................................................................... 36 

Sanneman v. Chrysler Corp., 191 F.R.D. 441 (E.D. Pa. 2000) .................................................... 16 

Sullivan v. DB Investments, Inc., 667 F.3d 273 (3d Cir. 2011) .................................................... 27 

Summerfield v. Equifax Info. Serv’s, LLC, 264 F.R.D. 133 (D.N.J. 2009) ................................... 31 

Szczubelek v. Cendant Mortg. Corp., 215 F.R.D. 107 (D.N.J. 2003) ........................................... 31 

United Consumer Financial Services Co. v. Carbo, 410 N.J. Super. 280, 982 A.2d 7 (App. Div. 

2009) ....................................................................................................................... 10, 16, 17, 20 

Van Gemert v. Boeing Co., 590 F.2d 433 (2d Cir. 1978), aff’d 444 U.S. 472 (1980) .................. 49 

Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) .................................................. 16, 26, 27 

Watkins v. DineEquity, Inc., Civ. No. 11–7182, 2012 WL 3776350 (D.N.J. Aug.29, 2012) ......... 9 

Weiss v. York Hosp., 745 F.2d 786 (3d Cir. 1984) ....................................................... 1, 14, 19, 57 

Wetzel v. Liberty Mut. Ins. Co., 508 F.2d 239 (3d Cir. 1975)................................................. 21, 55 

Zimmerman v. Portfolio Recovery Assoc’s, LLC, 276 F.R.D. 174 (S.D.N.Y. 2011) ................... 25 

Zinberg v. Washington Bancorp, Inc., 138 F.R.D. 397 (D.N.J. 1990) ................................... 14, 31 

Statutes

Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332 ............................................................. 50 

Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 et seq. ............................................................ passim 

Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692a, et seq. .......................... 25, 40 

Federal Supplemental Jurisdiction Statute, 28 U.S.C. § 1367 .......................................... 51, 52, 53 

Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601 et seq. ....................................... 25, 40, 46, 48 

Uniform Commercial Code N.J.S.A. 12A:9-615 and 12A:2A-527 .............................................. 35 

Rules

Fed. R. Civ.P. 13 ..................................................................................................................... 48, 49 

Fed.R.Civ.P. 23 ...................................................................................................................... passim 

Fed.R.Civ.P. 30 ............................................................................................................................. 25 

Treatises

18 Moore’s Federal Practice ........................................................................................................ 32 

18A Wright, Miller & Kane, Federal Practice and Procedure (2d ed. 1996) .............................. 33 

Newberg on Class Actions (4th Ed. 2002)............................................................................. 46, 49 

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INTRODUCTION AND CLASS DEFINITION 

Plaintiff Margaret Korrow brought this action on behalf of herself and tens 

of thousands of similarly situated New Jersey consumers who entered into rent-toown (RTO), or lease-ownership, contracts for furniture or other household items 

with Defendant Aaron’s, Inc. (Aaron’s). Korrow alleges that Aaron’s contracted 

for and collected millions of dollars in unlawful and deceptive fees from Class 

members, who are mostly lower-income consumers. She specifically alleges that 

three of the charges Aaron’s imposed through its standard-form RTO contracts are 

prohibited by the Retail Installment Sales Act (RISA), N.J.S.A. 17:16C-1 et seq., 

and therefore violate the Truth In Consumer Contract, Warranty and Notice Act 

(TCCWNA), N.J.S.A. 56:12-14 to 18. She further alleges that Aaron’s’ collection 

of these unlawful and deceptive fees violates the Consumer Fraud Act (CFA), 

N.J.S.A. 56:8-1 et seq. Since Aaron’s’ violations of New Jersey’s consumer 

protection laws in contracting for these fees and collecting them with the first 

payments due are evident on the face of its RTO contracts, these claims are readily 

amenable to class-wide resolution under Fed. R. Civ. P. 23. 

Accordingly, Korrow seeks certification pursuant to Rule 23(a) and (b)(3) of 

the following proposed Class and Sub-Classes: 

THE CLASS 

All natural persons who entered into a rent-to-own contract 

with Defendant Aaron’s, Inc. in New Jersey from March 16, 2006 

through and including March 31, 2011.1

 

1

 The Class start date is the day after the New Jersey Supreme Court held in Perez 

v. Rent-A-Center, Inc., 186 N.J. 188, 892 A.2d 1255 (2006), that RISA applies to 

RTO contracts. See id. at 212, 892 A.2d at 1270. The court later clarified that its 

holding only applied prospectively for non-parties. See Perez v. Rent-A-Center, 

Inc., 188 N.J. 215, 902 A.2d 1232 (2006). The Class end date reflects that, as set 

forth infra § I.B.1, Aaron’s changed the practices addressed herein in April, 2011, 

in response to this lawsuit. 

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CFA-“PRORATED” AMOUNT SUB-CLASS

All members of the Class as defined above who paid Defendant 

Aaron’s, Inc. a first monthly payment that included a “prorated” 

amount. 

CFA-“SERVICE PLUS” FEE SUB-CLASS

All members of the Class as defined above who paid Defendant 

Aaron’s, Inc. a first monthly payment that included a “Service Plus” 

fee. 2

STATEMENT OF FACTS 

Aaron’s operates retail stores that offer RTO contracts for consumer 

electronics, home appliances, and furniture. Although cast by Aaron’s as “lease 

ownership agreements,” its RTO contracts in New Jersey are installment sales 

contracts, as recognized by the New Jersey Supreme Court in Perez, supra, 186 

N.J. at 212, 892 A.2d at 1270, and by this Court in its order denying Aaron’s’ 

motion to dismiss (Dkt. 21-22). Aaron’s’ own marketing literature recognizes this: 

“In the typical transaction, the consumer selects the goods they would like to 

purchase, and Aaron's arranges financing for the purchase of the goods with 

monthly payments over a set period of time, after which, the consumer owns the 

goods.” Declaration of Michael J. Quirk (“Quirk Decl.”), Exhibit D (Aaron’s 

brochure titled “Aaron’s . . . and an Exciting Future”). 

 

2

 Although the Complaint identified the proposed Class with less specificity than 

was possible after discovery, deviation from a class definition proposed in a 

complaint is permissible where, as here, “[p]laintiffs seek to narrow the class 

originally proposed and [d]efendants do not articulate any particular prejudice that 

arises from the newly narrowed class or any additional discovery that would be 

required.” Casida v. Sears Holdings Corp., 2012 U.S. Dist. LEXIS 111599, 30-32 

(E.D. Cal. Aug. 8, 2012); In re TFT-LCD (Flat Panel) Antitrust Litigation, 267 

F.R.D. 583, 591 (N.D. Cal. 2010), amended in part, 2011 U.S. Dist. LEXIS 84476, 

2011 WL 3268649 (N.D. Cal., July 28, 2011). 

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According to Aaron’s, its “typical... customer is an hourly wage job-holder 

[with] no real estate or financial instruments [and] no savings account or credit 

cards,” id., and its targeted demographic is “lower to middle income consumers.” 

Quirk Decl., Ex. C (Aaron’s Form 10-Q filed with U.S. Securities and Exchange 

Commission for third quarter 2012, p. 19). According to Aaron’s’ expert, its rentto-own customers “are more likely to not own homes, have low incomes, and have 

a high school education or less,” to “lack[] access to credit markets,” and therefore 

to be “less likely to be able to afford to buy durable products outside of the rent-toown market.” Dkt. 46-15 (Report of Joel Steckel, Ph.D.), ¶ 37. 

Ms. Korrow is a lower income consumer who, on July 23, 2009 entered into 

an RTO contract for a bedroom set at the Aaron’s store in Ewing, New Jersey. See

Declaration of Henry P. Wolfe (“Wolfe Decl.”) (filed under seal), Ex. A 

(“Consumer Lease Agreement,” dated July 23, 2009, produced as AARON’S 

000033-000035). The contract was for an initial term of six months and required 

Plaintiff to make six monthly payments of $135.64. Id. at AARON’S 000033. 

The “cash price” for the furniture was identified as $1,827.92. Id. The contract 

included what Aaron’s called a “Lease Ownership Plan,” under which Korrow 

could make the regular monthly contract payments of $135.64 for 24 months, 

resulting in a “Total Amount to Acquire Ownership of $3042.48.” Id. The 

contract also listed an “option to purchase the Leased Property at the end of the 

Lease Term for $2,064.37.” Id. When added to the total “Monthly Payments for 

the Lease Term” of $848.88, id., this meant that Korrow could purchase goods 

with a listed cash price of $1,827.92 over six months at a total cost of $2,913.25. 

The monthly payment of $135.64 included a lease payment of $115.25, 

Sales/Use Tax of $8.87, and an additional “Service Plus Fee” of $11.52, which, 

according to an “addendum” Aaron’s gave Korrow with the other paperwork, was 

for a variety of services, including a charge to “review and investigate my lease 

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application, to prepare my agreement, or to activate my account.” Id. at 

AARON’S 000034. This means that Korrow incurred a portion of the Service Plus 

fee when Aaron’s prepared the RTO agreement, i.e. before she signed it. 

The contract also included a provision imposing a $15 “Return Check” 

charge if a payment check “is returned to Aaron’s for any reason.” Id. at 

AARON’S 000035. The contract also required Korrow to pay an additional 

$35.04 with her initial payment, designated as a “prorated amount,” which 

increased her “First Monthly Payment” to $170.68. Id. at AARON’S 000033. The 

$35.04 “prorated amount” is roughly equal to eight days’ worth of payments, with 

daily payments calculated by dividing the full monthly payment of $135.46 by 31 

days. Although Aaron’s charged Korrow the $35.04 prorated amount for eight 

days of rent, the contract did not extend her lease beyond the six-month period. 

The contract unambiguously identifies the lease term as “six months,” beginning 

on July 23, 2009. Id. at AARON’S 000033. Nor did the pro-rated amount reduce 

Korrow’s payment obligations in any way. The contract required her to make five 

additional monthly payments, none of which was reduced by the prorated amount. 

Id. Aaron’s thus charged and Korrow paid an additional eight days of rent for 

which the contract gave her nothing in return. 

 After she signed the contract, Korrow paid Aaron’s $240 in cash, which 

included the $170.68 identified as the total payment due at signing ($135.64 

monthly payment plus $35.04 “prorated payment”). Wolfe Decl., Ex. B 

(AARON’S 000009). Aaron’s subsequently delivered to Korrow’s residence 

bedroom furniture consisting of a bed (including headboard, mattress, box spring, 

footboard, and metal frame), tall dresser, dresser with mirror and nightstand set. 

Korrow subsequently made additional payments totaling $144.14, but had to stop 

paying when her work hours were reduced and she could no longer afford the 

monthly installments. Quirk Decl., Ex. A (deposition of Margaret Korrow 

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(“Korrow dep.”)), at 71:8-10. All told, Korrow paid Aaron’s $384.14, which 

included $66.82 in fees and charges prohibited by RISA--$31.78 in “Service Plus” 

fees and the $35.04 “prorated charge.” Wolfe Decl., Ex. B (Aaron’s 000009).

After Korrow stopped making payments, Aaron’s repossessed the bedroom 

set. According to Aaron’s’ records, the repossession took place on December 11, 

2009. See Declaration of Scott Harvey (“Harvey Decl.”) (Dkt. 45-2), ¶ 12. 

Although not relevant to her claims or this motion, Korrow recalls Aaron’s 

repossessing the bedroom set earlier, in late November. Quirk Decl., Ex. A 

(Korrow dep.), at 67-68. 

STATEMENT OF PROCEDURAL HISTORY 

Legal action between the parties began on December 21, 2009, when 

Aaron’s filed a lawsuit against Korrow in the New Jersey Superior Court, Mercer 

County, Special Civil Part, Small Claims Section, to collect on the RTO contract 

for the bedroom set it had already repossessed. See Quirk Decl., Ex. B (small 

claims complaint in Aaron’s Sales & Lease v. Korrow, No. SC-1580-09 (N.J. 

Super. Ct. Law Div.-Special Civ. Pt., Mercer County). Aaron’s sued Korrow for 

$3,000, alleging that she “failed to uphold terms of lease making only 2.5 of 24 

required monthly payments of $135.64. Also refused to return merchandise.” Id.3

Aaron’s made this claim despite already having collected the bedroom 

furniture less than five months into the contract. Harvey Decl., ¶ 12. Had Korrow 

paid the $3,000 that Aaron’s demanded in its suit, she would have paid a total of 

$3,374.79, which is nearly double her contract’s listed cash price of $1,827.92 and 

greater than either the “Total Amount to Acquire Ownership” of $3,042.48 or the 

 

3

 None of the employees Aaron’s produced for deposition as persons with relevant 

knowledge could explain the basis for this $3,000 demand amount. See Wolfe 

Decl., Ex. E (Deposition of Scott Harvey (“Harvey dep.”)), at 249:15-250:1; Ex. F 

(Deposition of Billy Hardison (“Hardison dep.”)), at 76:25-78:14; Ex. G 

(Deposition of David Epright (“Epright dep.”)), at 180:7-24. 

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early purchase option amount of $2,913.25, for goods that she possessed for under 

five months before Aaron’s repossessed them and then sued her. 

Aaron’s dismissed its complaint after Korrow retained a legal services 

attorney to represent her in the collection action. Quirk Decl., Ex. A (Korrow 

dep.), at 24:10-25:11. 

On October 26, 2010, Korrow filed a Class Action Complaint against 

Aaron’s in New Jersey Superior Court, Middlesex County Law Division. On 

December 6, 2010, Aaron’s removed the case to this Court. On February 1, 2011, 

Aaron’s filed a motion to dismiss, which Korrow opposed. On August 25, 2011, 

the Court (Pisano, J.) filed an order and written opinion denying the motion to 

dismiss. Dkt. 21-22. 

The parties then engaged in discovery pertaining to class certification. 

Pursuant to the Court’s subsequently-issued scheduling order (Dkt. 50), Aaron’s 

filed a preemptive “Motion to Deny Class Certification” (Dkt. 45) on December 

17, 2012. Korrow now files her accompanying cross-motion for class certification 

and opposition to Aaron’s’ preemptive motion. 

SUMMARY OF CLASS CLAIMS 

Korrow’s and the putative Class’s claims arise from Aaron’s’ practice of 

contracting for and charging various fees in RTO contracts that RISA does not 

allow, and therefore prohibits. N.J.S.A. 17:16C-50 (RISA prohibits all fees not 

expressly authorized). Although RISA does not itself provide a private right of 

action, Korrow seeks remedies for herself and the Class and Sub-Classes for these 

RISA violations under TCCWNA and the CFA respectively. 

TCCWNA prohibits businesses from offering or entering into contracts in 

consumer transactions that contain provisions that violate any state or federal law. 

N.J.S.A. 56:12-15. Under TCCWNA’s private action provision, consumers who 

are offered or made bound by such a contract containing unlawful provisions are 

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entitled to a minimum of $100 in statutory damages. N.J.S.A. 56:12-17. Here, 

Korrow and every Class member was subject to an Aaron’s RTO contract 

containing one or more provision prohibited by RISA, and thus each is entitled to 

at least $100 in statutory damages under TCCWNA. 

The CFA prohibits businesses from engaging in deceptive or unconscionable 

commercial practices in sales, N.J.S.A. 56:8-2, including in RTO sales. See Perez, 

186 N.J. at 220, 892 A.2d at 1275. Under the CFA’s private action provision, 

N.J.S.A. 56:8-19, Korrow and all Sub-Class members who paid any portion of the 

unlawful prorated and Service Plus fees are entitled to treble the amount of these 

fees that they paid. N.J.S.A. 56:8-19. 

In short, these claims involve clear violations of New Jersey consumer 

protection laws that are evident on the face of form contracts used in tens of 

thousands of transactions, for which statutorily mandated damages are readily 

calculable. This action therefore is ideally suited for class treatment. See, e.g., 

Dupler v. Costco Wholesale Corp., 249 F.R.D. 29, 37-38 (E.D.N.Y. 2008) (“An 

overwhelming number of courts have held that claims arising out of form contracts 

are particularly appropriate for class action treatment.”). 

I. RISA’s Prohibition of the Challenged Fees 

RISA was enacted to “protect[] the public interest through the regulation of 

the charges associated with the time sale of goods.” Perez, 186 N.J. at 209, 892 

A.2d at 1268. Among other restrictions, RISA prohibits covered businesses from 

imposing any fees or charges other than those expressly permitted under RISA: 

No retail seller... shall charge, contract for, collect or receive from 

any retail buyer, directly or indirectly, any further or other amount for 

costs, charges, insurance premiums, examination, appraisal service, 

brokerage, commission, expense, interest, discount, fees, fines, 

penalties or other things of value in connection with retail installment 

contracts or retail charge accounts other than the charges permitted by 

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this act... 

N.J.S.A. 17:16C-50.4

 Korrow’s claims are based on three particular fees and 

charges contained in Aaron’s’ standard RTO contracts used during the proposed 

class period: (1) a “Service Plus Fee”; (2) a “prorated amount” charge; and (3) a 

“Return Check Charge” imposed if a payment check is “returned for any reason.” 

The “Service Plus Fee” is a monthly fee, ostensibly charged in exchange for 

a grab bag of “services,” including some that are intrinsic to the RTO agreement, 

such as reviewing, preparing, and investigating the agreement. These and other 

services, such as delivery of the goods and a discount on future goods, are not 

among the types of services for which RISA expressly permits a fee to be charged. 

The “prorated amount” amount is a highly deceptive add-on fee for which 

the contract provides no benefit whatsoever. The prorated amount does not change 

the contract’s payment due dates, the term of the lease, or any reduction in the 

amount of monthly payments that must be made. While the “prorated” designation 

implies that the charge is for payment between the date the RTO contract is entered 

into and the regular payment due date (e.g., Korrow’s contract date was July 23, 

2009, the regular payment due date was the 15th day of each month, and she was 

charged a “prorated amount” of $35.04, or roughly eight days of payments), the 

contract does not provide anything in exchange because its express terms state that 

the end date is an anniversary of the date that the contract is entered into, not on a 

day corresponding with a regular payment due date. In any event, the “prorated 

amount” is an additional charge that is not authorized by RISA. Aaron’s’ standard 

 

4

 An exhaustive list of the fees and charges expressly permitted by RISA includes 

interest (or “time price differential”) (N.J.S.A. 17:16C-41), late fees (§ 42(a)-(c)), 

attorney’s fees, court costs and other expenses incurred in collections (§§ 42(d), 

50), certain types of insurance premiums (§§ 30, 33), official fees, such as lien 

recording fees or motor vehicle license and transfer fees (§§ 1, 27), and a return 

check fee, but only for checks returned for insufficient funds (§ 42(e)). 

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“Return Check Charge” violates RISA because it applies when customers’ checks 

are “returned for any reason,” whereas RISA specifically permits return check fees 

only when checks are returned for insufficient funds. N.J.S.A. 17:16C-42(e). 

II. Class Claims for RISA Violations Under TCCWNA 

TCCWNA is a consumer protection statute enacted to “prevent deceptive 

practices in consumer contracts by prohibiting the use of illegal terms or warranties 

in consumer contracts.” Kent Motor Cars, Inc. v. Reynolds and Reynolds, Co., 207 

N.J. 428, 457, 25 A.3d 1027, 1044 (N.J. 2011). It provides that: 

No seller, lessor, creditor, lender or bailee shall in the course of his 

business offer to any consumer or prospective consumer or enter into 

any written consumer contract...after the effective date of this act 

which includes any provision that violates any clearly established 

legal right of a consumer or responsibility of a seller... as established 

by State or Federal law at the time the offer is made or the consumer 

contract is signed . . . . 

N.J.S.A. 56:12-15. To effectuate this purpose, TCCWNA provides for a private 

right of action, entitling the consumers who receive offending contracts to sue for 

statutory damages of not less than $100, whether or not they suffered actual 

damages. N.J.S.A. 56:12-17. In short, “the NJTCC[WNA] can be violated if a 

contract...simply contains a provision prohibited by state or federal law, and it 

provides a remedy even if the plaintiff has not suffered actual damages.” Watkins 

v. DineEquity, Inc., Civ. No. 11–7182, 2012 WL 3776350, *6 (D.N.J. Aug.29, 

2012)(quoting McGarvey v. Penske Automotive Group, Inc., 639 F. Supp. 2d 450, 

458 (D.N.J.2009); Barrow v. Chase Manhattan Mortg. Corp., 465 F. Supp. 2d 347, 

362 (D.N.J.2006)). 

 The class claims under TCCWNA here are premised on the provisions in 

Aaron’s standard RTO contract imposing fees that are not specifically authorized 

by, and therefore prohibited, by RISA. By offering and entering into contracts 

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containing these provisions, Aaron’s violated TCCWNA as to each consumer who 

entered into such contracts, and is therefore liable to each of them for TCCWNA’s 

statutory penalty of not less than $100. 

The New Jersey courts have already determined that TCCWNA claims arise 

from contracts containing fees unauthorized by RISA. United Consumer Financial 

Services Co. v. Carbo, 410 N.J. Super. 280, 307, 982 A.2d 7, 23 (App. Div. 2009).5

 

In Carbo, the Appellate Division addressed claims identical to the “Return Fee 

Check” claim here. The court first ruled that a return check fee provision in the 

seller’s standard contract violated RISA because it applied not just when a check is 

returned for insufficient funds, as permitted under N.J.S.A. 17:16C-42, but 

whenever a check is returned “for any reason.” Carbo, 410 N.J. Super. at 305, 982 

A.2d at 31. Turning then to TCCWNA, the court held that: 

TCCWNA’s applicability to the RISA violation at issue here is clear. 

“[A]ny reasonable person would recognize” that a retail installment 

sales contract that gives the holder a right to charge a fee not 

authorized by RISA violates the consumer’s “clearly established” 

right to be free from a contract that permits such a charge. 

Id. at 307, 982 A.2d at 23 (internal citation omitted). Thus, the court held that the 

seller violated TCCWNA as to all consumers who entered into a contract 

containing the return check fee “for any reason” provision, and that it was liable to 

a class of such consumers for $100 each pursuant to TCCNWA’s minimum 

statutory damage provision, N.J.S.A. 56:12-17. Rejecting the seller’s objections 

that there was no evidence that it ever charged the unlawful fee, the court noted 

 

5

 When a federal court interprets state law, “[a]n intermediate appellate state court 

[decision] ... is a datum for ascertaining state law which is not to be disregarded by 

a federal court unless it is convinced by other persuasive data that the highest court 

of the state would decide otherwise.” Houbigant, Inc. v. Federal Ins. Co., 374 

F.3d 192, 199 n.9 (3d Cir. 2004) (quoting C.I.R. v. Bosch's Estate, 387 U.S. 456, 

465 (1967)). 

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that “[i]t is not material that an unauthorized fee for a returned check was neither 

assessed against nor collected from a member of the class. N.J.S.A. 17:16C-50 

was violated by ‘contract[ing] for’ the right to assess a check fee not authorized by 

N.J.S.A. 17:16C-42(e).” Id. at 305, 982 A.2d at 22. The court also upheld the trial 

court’s certification of the class, noting that the claims were appropriate for class 

treatment because they involved the same alleged facial violations on the seller’s 

form contracts. Id. at 295, 982 A.2d at 15-16 (“The common nucleus of fact in this 

class action is the content and form of the contract... prepared by UCFSC and used 

in each transaction.”). 

III. Sub-Class Claims Under the CFA 

 The Sub-Class claims under the CFA arise from the “prorated amount” 

charges and “Service Plus Fees” actually paid by Plaintiff and putative Sub-Class 

members. The CFA prohibits “the act, use or employment by any person of any 

unconscionable commercial practice [or] deception... in connection with the sale 

or advertisement of any merchandise...” N.J.S.A. 56:8-2. As the Court (Pisano, 

J.) recognized in denying Aaron’s’ motion to dismiss Korrow’s CFA claims, “the 

Supreme Court of New Jersey held that RISA claims may be asserted under the 

CFA.” Dkt. 22 at 5, citing Perez, supra.

6

The Sub-Class CFA claims are well-suited to class treatment because, as 

 

6

 Even if these fees were not prohibited by RISA, they still would violate the CFA 

as deceptive and unconscionable commercial practices. Consumers who pay the 

“prorated amount” receive nothing in return for it, as it does not extend the lease 

period covered by the regularly scheduled payment amounts. The “Service Plus” 

fee also is deceptive and unconscionable because Aaron’s represents it to pay for 

certain “services,” such as “Application Processing,” that Aaron’s would have to 

perform with or without this fee, as it must have for those few customers who did 

not pay the fee but still entered into an RTO contract. See accompanying 

Declaration of Christopher J. McGinn (“McGinn Decl.”), ¶ 12 (43 of 36,016 

Aaron’s RTO agreements produced did not charge a Service Plus fee). 

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with the TCCWNA claims, the violations can be determined simply by reviewing 

form contracts and documents. With respect to the other elements of a CFA claim, 

causation and ascertainable loss, Sub-Class members lost the money they paid for 

prohibited fees as result of Aaron’s charging such fees in its RTO contract. 

Moreover, the amount of each Sub-Class member’s loss can be readily ascertained 

from their contracts and Aaron’s’ account records. See Wolfe Decl., Ex. F 

(Hardison dep.), at 174:12-175:7 (“Q. But we could assess for customers that were 

in New Jersey at this time how much these customers paid as a service plus fee? 

A: Yes. Underneath service plus.”). 

LEGAL ARGUMENT 

I. The Proposed Class and Sub-Classes Satisfy Rule 23(a)’s Requirements. 

The proposed Class and Sub-Classes satisfy all of the applicable perquisites 

under Rule 23(a) for maintaining a case as a class action. 

A. Class and Sub-Class Membership is Readily Ascertainable. 

Although it is not among Rule 23(a)’s expressly enumerated requirements, 

the Third Circuit, this Court and others have held that “an essential prerequisite of 

a class action, at least with respect to actions under Rule 23(b)(3), is that the class 

must be currently and readily ascertainable based on objective criteria.” Marcus v. 

BMW of N. Am., LLC, 687 F.3d 583, 593 (3d Cir. 2012); see also Agostino v. Quest 

Diagnostics, 256 F.R.D. 437, 478 (D.N.J. 2009) (“It has long been the case that 

Rule 23 implicitly requires that prospective plaintiffs propose a class definition that 

is readily ascertainable based on objective criteria.”). The requirement that a 

class’s membership be readily ascertainable facilitates administration of the class 

action and provision of the best practicable notice to the class, while also 

protecting the defendant by clearly identifying who is bound by a judgment. 

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Marcus, 687 F.3d at 593. To ensure these objectives, the Third Circuit has found 

that “[i]f class members are impossible to identify without extensive and 

individualized fact-finding or mini-trials, then a class action is inappropriate.” Id.

 Here, Class and Sub-Class membership is readily ascertainable because it is 

determined by objective criteria, which is readily identifiable on the face of the 

Aaron’s form RTO contracts. Class membership is determined by the date of the 

RTO contract, which is stated in the upper right-hand corner of its first page. See, 

e.g., Wolfe Decl., Ex. A (Korrow RTO contract), at AARON’S 000033 (field for 

“Agreement Date”). Sub-Class membership is based upon equally objective and 

readily identifiable criteria, as the only additional requirement is that the Class 

member have paid an initial “prorated” or “Service Plus” fee as part of her first 

monthly payments. The Aaron’s RTO contracts itemize both of these charges as 

part of the first payment due on the date of contracting. Id. (fields for “Monthly 

Payments”); see also Wolfe Decl., Ex. F (Hardison dep.), at 174:12-175:7 

(payment of these fees is identifiable in Aaron’s’ payment records). 

Since the Class and Sub-Classes are defined based upon objective criteria 

that are identifiable on the face of the Aaron’s RTO contracts and payment records, 

their membership is readily ascertainable. See, e.g., Flores v. Anjost Corp., 284 

F.R.D. 112, 123 (S.D.N.Y. 2012) (“The class can clearly be ascertained by 

objective documentation, such as Defendants’ employee payroll records and wage 

statements; no subjective criteria is required to determine the class’ contours. The 

fact that an analysis of Defendants’ data is necessary does not render a class 

unascertainable.”) (citations omitted). 

B. The Class and Sub-Classes Satisfy Rule 23(a)(1)-(4). 

1. The Class and Sub-Classes are Sufficiently Numerous. 

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 Rule 23(a)(1) requires that a proposed class or sub-class be “so numerous 

that joinder of all members is impracticable.” Fed. R. Civ. P. 23(a)(1). Although 

there is no bright-line threshold, the Third Circuit has found that the existence of 

“more than 90 geographically dispersed plaintiffs met the numerosity requirement 

of [Rule] 23(a)(1).” Eisenberg v. Gagnon, 766 F.2d 770, 785-86 (3d Cir. 1985); 

see also Weiss v. York Hosp., 745 F.2d 786, 808 (3d Cir. 1984) (affirming finding 

that class of 92 osteopaths was sufficiently numerous). In assessing numerosity, the 

court “can make a common sense determination whether it would be difficult or 

inconvenient to join all class members as named parties under the particular 

circumstances of a case.” Maldonado v. Houstoun, 177 F.R.D. 311, 319 (E.D. Pa. 

1997). Thus, “[p]recise enumeration of the members of the class is not necessary 

for the action to proceed as a class action. It is permissible to estimate class size.” 

Zinberg v. Washington Bancorp, Inc., 138 F.R.D. 397, 405 (D.N.J. 1990). 

 Here, the proposed Class and Sub-Classes are sufficiently numerous. 

Aaron’s admits that it entered into over 50,000 rent-to-own contracts from March 

16, 2006 (start of class period) to December 31, 2011 (nine months after end of 

class period). See Wolfe Decl., Ex. E (Harvey dep.), at 174:4-20. Of these, 

Aaron’s produced through discovery electronic “recovered versions of consumer 

lease agreements that were printed at Aaron’s company-operated stores,” Quirk 

Decl., Ex. E (letter of Michael R. McDonald, counsel for Aaron’s, explaining 

documents produced), 36,016 of which were dated March 16, 2006 to October 5, 

2009. See McGinn Decl., ¶¶ 2-6. For the period starting in October 2009, Aaron’s 

produced an agreed-upon sampling of 93 agreements, 45 of which were entered 

into during the Class period through March 31, 2011. Id., ¶¶ 18-21. Electronic 

searches of these documents revealed that: 

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• 22,524 of the 36,016 contracts (plus 35 of 45 sample contracts), 

charged a “prorated” amount greater than zero that was 

included in the amount of the first payment due (id. ¶¶ 17, 21); 

• 35,973 of the 36,016 contracts (plus 45 of 45 sample contracts) 

charged a “Service Plus” fee greater than zero due that was 

included in the amount of the first payment due (id. ¶¶ 12, 21); 

and 

• All 36,016 agreements (plus 45 of 45 sample agreements) 

charged a “Return Check” fee that must be paid if a customer’s 

payment check was returned “for any reason” (id. ¶¶ 10, 23).7

 The foregoing demonstrates that the proposed Class and Sub-Classes consist 

of at least tens of thousands of New Jersey consumers who paid one or more of 

these fees, and who cannot practicably be joined in this litigation except through a 

class action. The proposed Class and Sub-Classes thus are sufficiently numerous. 

2. The Class and Sub-Classes’ Claims Raise Common 

Questions of Law and Fact. 

 Rule 23(a)(2) requires that there be “questions of law or fact common to the 

class.” Fed. R. Civ. P. 23(a)(2). The Supreme Court recently addressed this 

requirement, holding that, to satisfy Rule 23(a)(2), a certifiable class-wide claim 

“must depend upon a common contention,” and that “[w]hat matters to class 

certification is not the raising of common questions—even in droves—but, rather 

the capacity of a classwide proceeding to generate common answers apt to drive 

 

7 Aaron’s eliminated the challenged “prorated” amount and the “for any reason” 

trigger for its Return Check fee’s coverage in early 2011, in response to this 

litigation. See Wolfe Decl., Ex. E (Harvey dep.), at 203:21-22 (“Well, we made 

changes post-Perez. We made changes post-Korrow.”); id. at 204:6-11 

(describing “post-Korrow” change to Return Check fee’s coverage); id. at 35:10-11 

(“The prorate was actually charged from October, 2007 to February of 2011 is 

when it ended . . .”); see also McGinn Decl., ¶¶ 22-26 (Return Check fee language 

changed in April 2011). 

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the resolution of the litigation.” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 

2551 (2011). 

In so defining what constitutes a “common question” under Rule 23, the 

Supreme Court reaffirmed longstanding precedent that distinguishes Rule 23(a)(2) 

commonality from Rule 23(b)(3) predominance of common questions by 

recognizing that even one common question (so defined) may demonstrate 

commonality. Id. at 2556 (“We quite agree that for purposes of Rule 23(a)(2) even 

a single common question will do . . .”); see also In re Prudential Ins. Co. of Am. 

Sales Pract’s Litig., 148 F.3d 283, 310 (3d Cir. 1998) (“‘The commonality 

requirement will be satisfied if the named plaintiffs share at least one question of 

fact or law with the grievances of the prospective class.’”) (quoting Baby Neal v. 

Casey, 43 F.3d 48, 56 (3d Cir. 1994)). 

 “Commonality” under Rule 23(a)(2) thus is not “identicality” of claims. 

“[F]actual differences among the claims of the putative class members do not 

defeat certification.” Baby Neal, 43 F.3d at 56. Instead, “[c]ommonality exists 

when proposed class members challenge the same conduct of the defendants.” 

Sanneman v. Chrysler Corp., 191 F.R.D. 441, 446-47 (E.D. Pa. 2000). 

 Plaintiff’s and the Class and Sub-Classes’ claims again readily satisfy these 

requirements. The common nucleus of operative fact for these claims is that 

Aaron’s, through its standard-form RTO contracts, unlawfully contracted for and 

charged Plaintiff and Class members “prorated” charges, “Service Plus” fees, 

and/or unlawfully contracted for “Return Check” fees for checks returned “for any 

reason,” that RISA does not authorize and therefore prohibits. See N.J.S.A. 

17:16C-50 (prohibiting retail installment fees not expressly authorized by RISA); 

see also Carbo, supra, 410 N.J. Super. at 305, 982 A.2d at 21 (RISA prohibits 

contracting for fees or charges other than those permitted by the Act); id. at 295-

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96, 982 A.2d at 15-16 (affirming class certification of claim alleging that RISA 

prohibited retail seller’s return check fee imposed “for any reason” ). 

 Although any one of the following would suffice to satisfy Rule 23(a)(2), 

Plaintiff’s and Class and Sub-Class members’ claims raise one or more of the 

following commonly answered issues of law or fact: 

Class Claims (Under RISA / TCCWNA) 

• Whether Aaron’s’ standard-form rent-to-own agreements are retail 

installment sales contracts governed by RISA (see Perez, supra, 

186 N.J. at 212, 892 A.2d at 1270 (“We agree and hold that RISA 

applies to the rent-to-own contacts at issue here.”)); 

• Whether RISA does not authorize and thereby prohibits Aaron’s 

from contracting to require consumers to pay a “prorated” charge 

(N.J.S.A. 17:16C-50); 

• Whether RISA does not authorize and thereby prohibits Aaron’s 

from contracting to require consumers to pay a “Service Plus” fee 

(N.J.S.A. 17:16C-50); 

• Whether RISA does not authorize and thereby prohibits Aaron’s 

from contracting to require consumers to pay a “Return Check” fee 

if a check is returned “for any reason” (N.J.S.A. 17:16C-42(e),50; 

see also Carbo, 410 N.J. Super. at 305-06, 982 A.2d at 22 (“The 

[return check] charge specified in this contract, which can be 

charged ‘for any reason,’ violates N.J.S.A. 17:16C-50 because it is 

not authorized by N.J.S.A. 17:16C-42(e) or any other provision of 

RISA.”)); 

• Whether any or all of the foregoing contracted-for charges that 

RISA prohibits thus also violate TCCWNA because they violate a 

“clearly established legal right” of consumers (N.J.S.A. 56:12-15; 

Carbo, 410 N.J. Super. at 307, 982 A.2d at 23 (“TCCWNA’s 

applicability to the RISA violation at issue here is clear.”)); and 

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• Whether any or all of these TCCWNA violations entitle Plaintiff 

and Class members to monetary relief and reasonable attorney’s 

fees and costs provided under the Act (N.J.S.A. 56:12-17). 

CFA-“Prorated” Amount Sub-Class Claim 

• Whether Aaron’s’ collection of a “prorated” charge, which RISA 

prohibits, without either extending the contract’s term, changing 

the contract’s payment schedule, or reducing the payments owed, 

is a deceptive and unconscionable commercial practice under the 

CFA (N.J.S.A. 56:8-2); and 

• Whether Plaintiff’s and Sub-Class members’ payment of the 

prohibited and deceptive “prorated” charge for which the contract 

provides nothing in return constitutes an ascertainable loss under 

the CFA (N.J.S.A. 56:8-19). 

CFA-“Service Plus” Fee Sub-Class Claim 

• Whether Aaron’s’ collection of monthly “Service Plus” fees, 

purportedly for items such as “Application Processing,” delivery, 

relocation, payment holiday, discounts on new agreements, and 

other purported benefits for which RISA does not authorize and 

thereby prohibits separate charges in retail installment contracts, is 

an unconscionable commercial practice under the CFA (N.J.S.A. 

56:8-2; see also Perez, supra, 186 N.J. at 220, 892 A.2d at 1275 

(reinstating CFA claim based upon reinstated claim that rent-toown contract’s interest charges violated RISA)); 

• Whether Plaintiff’s and Sub-Class members’ payment of the 

unlawful and unconscionable “Service Plus” fees to Aaron’s 

constitutes an ascertainable loss under the CFA (N.J.S.A. 56:8-19). 

These common questions of law and/or fact have common Class-wide or 

Sub-Class-wide answers that will determine or drive the resolution of Plaintiff’s 

and Class and Sub-Class members’ claims, and therefore readily satisfy Rule 

23(a)(2)’s requirements. 

3. Plaintiff’s Claims are Typical of the Class and Sub-Classes. 

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 Rule 23(a)(3) requires that the claims or defenses of the class representative 

be “typical of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). The 

“typicality requirement is designed to align the interests of the class and the class 

representatives so that the latter will work to benefit the entire class through the 

pursuit of their own goals.” In re Prudential, 148 F.3d at 311 (citations omitted). 

Thus, “[t]o evaluate typicality, we ask whether the named plaintiff’s claims are 

typical, in common-sense terms, of the class, thus suggesting that the incentives of 

the plaintiffs are aligned with those of the class.” Beck v. Maximus, Inc., 457 F.3d 

291, 295-96 (3d Cir. 2006) (citations omitted). Rule 23(a)(3) is satisfied where a 

named plaintiff can “show that the issues of law or fact he or she shares in 

common with the class occupy the same degree of centrality to his or her claims as 

to those of unnamed class members.” Weiss v. York Hosp., 745 F.2d at 809 n.36 

(citation omitted). Thus, “factual variations will not defeat certification where the 

various claims arise from the same legal theory,” unless there is a danger with 

respect to the named plaintiff that “the unique circumstances or legal theory will 

receive inordinate emphasis” so that the common claims “will not be pressed with 

equal vigor or will go unrepresented.” Id.

 Here, Korrow is a typical victim of Aaron’s’ unlawful practices. She entered 

into a rent-to-own contract with Aaron’s that provides for an installment purchase 

of consumer goods, and contains provisions requiring payment of (1) a “prorated 

amount” with the first monthly payment, (2) a “Service Plus Fee” paid with the 

first monthly payment, and (3) a “Return Check” charged if one of her payment 

checks is returned “for any reason.” See Wolfe Decl., Ex. A (Korrow contract). 

Korrow contends and her claims for relief depend upon the contention that her 

rent-to-own contract is a retail installment contract governed by RISA, that RISA 

does not authorize and thereby prohibits contracting for any of these charges, and 

that she is therefore entitled to appropriate monetary and equitable relief under 

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TCCWNA for these unlawful contract obligations. See Class Action Complaint 

(Complaint) (Dkt. 1, Ex. A), ¶¶ 103-05, 113-14, 129-35. Class members assert the 

same claims for relief based upon Aaron’s’ imposition of the same unlawful 

contractual provisions in their rent-to-own contracts. The Court’s determinations 

as to the lawfulness of these common contract provisions under RISA and 

TCCWNA will determine Korrow’s and Class members’ entitlement to relief 

under these statutes. See, e.g., Carbo, supra, 410 N.J. Super. at 305-07, 982 A.2d 

at 21-23 (affirming summary judgment for plaintiff and certified consumer class on 

claims that retail installment contract’s “return check” fee imposed “for any 

reason” was prohibited by RISA and thus violated and afforded remedies under 

TCCWNA whether or not a consumer paid the fee). Korrow’s RISA-based 

TCCWNA claims thus are typical of the Class’s claims. 

 Korrow also is typical of the CFA Sub-Classes she seeks to represent. She 

alleges that Aaron’s’ “prorated” charge that RISA prohibits also violates the CFA 

because the contract requires her to pay this amount but does not provide her with 

any benefit in exchange for this payment. Complaint, ¶¶ 112-16. The one 

substantive difference between this and her TCCWNA claim is that she alleges that 

her ascertainable loss under the CFA (N.J.S.A. 56:8-19) is her payment of the 

“prorated” charge to Aaron’s. Complaint, ¶ 116. Since the proposed CFA-

“Prorated” Amount Sub-Class consists of Class members who likewise paid a 

prorated fee to Aaron’s, Korrow is typical of this Sub-Class. 

The same is true with respect to the CFA-“Service Plus” Fee Sub-Class, 

where again Korrow alleges that Aaron’s’ Service Plus fees are prohibited by 

RISA and therefore violate the CFA, id. ¶¶ 102-05, and that her ascertainable loss 

is her payments of this fee as part of her monthly payment amount. Id. ¶ 111. Since 

Korrow was contractually obligated to and did pay these prohibited fees, she is 

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typical of the proposed CFA Sub-Classes consisting of Class members who 

likewise paid one or both of these prohibited fees. 

 In sum, since Korrow’s TCCWNA and CFA claims are based on the same 

unlawful rent-to-own contract provisions as are Class and Sub-Class members’ 

claims and require her to make the same factual showing to obtain relief, she is 

typical of the Class and Sub-Classes that she seeks to represent. 

4. Plaintiff and Counsel Will Adequately Represent the Class 

and Sub-Classes. 

 Rule 23(a)(4) requires that the class representatives “fairly and adequately 

protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). “Adequate [class] 

representation depends on two factors: (a) the plaintiff’s attorney must be 

qualified, experienced, and generally able to conduct the proposed litigation, and 

(b) the plaintiff must not have interests antagonistic to those of the class.” Wetzel 

v. Liberty Mut. Ins. Co., 508 F.2d 239, 247 (3d Cir. 1975). In determining the 

adequacy of class representation under Rule 23(a)(4), “[t]he burden is on the 

defendant to demonstrate that the representation will be inadequate.” Lewis v. 

Curtis, 671 F.2d 779, 788 (3d Cir. 1982). 

Here, Plaintiff and counsel alike are adequate to represent the Class and SubClasses. As shown with respect to typicality, Korrow is an adequate Class and 

Sub-Class representative because she does not have antagonistic interests inasmuch 

as her claims for relief are predicated upon the same legal and factual allegations. 

See, e.g., Wetzel, 508 F.2d at 247-48 (“The interests of Wetzel and Ross in 

combatting the sexually discriminatory policies of the Company surely are 

coextensive with all female technical employees, whether formerly or presently 

employed. . . . The relief to be granted by the district court . . . will benefit all 

members of the class. We see no other factors revealing that the plaintiffs were not 

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adequate representatives of the class.”). Likewise, Korrow’s undersigned counsel 

are highly experienced in consumer class actions and other complex litigation—

including RISA, TCCWNA, and CFA cases—and thus are able to effectively 

prosecute hers and the Class and Sub-Classes’ claims. See Quirk Decl., Ex’s F-H 

and McGinn Decl., ¶¶ 32-38 (law firm resumes and qualifications). Plaintiff and 

counsel thus satisfy the requirements of Rule 23(a)(4) for adequate representation 

of the proposed Class and Sub-Classes. 

C. Aaron’s’ Arguments for Denial of Class Certification Based Upon 

Rule 23(a) Fail. 

 In its brief in support of its preemptive motion to deny class certification 

(Dkt. 45 and 45-1), Aaron’s raises a host of meritless arguments based on alleged 

failure to satisfy Rule 23(a). Aaron’s’ Rule 23(a) arguments rely upon non-existent 

or non-applicable legal standards coupled with distorted, one-sided depictions of 

the factual record. Each of these arguments is taken in turn. 

1. Ascertainability 

Aaron’s contends that there is no ascertainable class that can be certified 

because of asserted issues pertaining to its periodic amendments of its rent-to-own 

contracts, the residency of Class members, and whether Class members entered 

into their contracts for consumer or commercial purposes. See Aaron’s Brief at 35-

36. Korrow’s cross-motion either moots or rebuts these arguments. 

First, Aaron’s contends that, because it “changes its agreement from time to 

time,” it is “not possible to ascertain what agreements are ‘the same’ or which 

agreements are ‘similar’” to Korrow’s agreement without examining each 

customer’s agreement. Aaron’s Brief at 35. These references to agreements that 

are “the same” as or “similar” to Korrow’s refer to the Complaint’s class 

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definition. See Complaint, ¶ 86. In her Cross-Motion, Korrow specifies the 

operative five-year time period that the proposed Class covers and explains the 

correspondence between this period and Aaron’s’ imposition of the fee provisions 

that she challenges in its New Jersey RTO contracts. See supra pp. 1-2 (Class and 

Sub-Class definitions based on specified five-year time period) and Argument § 

I.B.1 and McGinn Decl. ¶¶ 2-26 (explaining correlation of time period to Aaron’s’ 

use of the challenged provisions in Korrow’s contract). By defining the proposed 

Class for this specified time period, Korrow has ensured that every covered Class 

member has one or more of the challenged RTO contract fee provisions—i.e. those 

requiring payment of any or all of the following: (a) a “prorated” due with the first 

payment; (b) a “Service Plus” fee due with the first payment; or (c) a “Return 

Check” fee or charge that must be paid if the person’s check is returned “for any 

reason.” Thus, both Class membership and the occurrence of one or more of these 

claims are readily determinable on the face of each contract, so that whether 

Aaron’s amended its form rent-to-own contract over time is irrelevant. 

Aaron’s seems to recognize this, as its bottom-line argument is that class 

membership is not ascertainable “without examining each customer’s agreement.” 

Brief at 35. But Aaron’s keeps all of its contracts in secured locations in its New 

Jersey stores, making them readily accessible when Aaron’s management needs to 

review them. See Wolfe Decl., Ex. G (Epright dep.), at 183:24-185:15 (“[T]hey’re 

kept on premises under lock and key and fireproof storage . . .”). Indeed, Aaron’s 

produced tens of thousands of electronic unsigned versions of these agreements 

through discovery. See McGinn Decl., ¶¶ 2-6. Thus, all that is needed to ascertain 

Class membership is a search of these company records. Cf. Flores, supra, 284 

F.R.D. at 123 (“The class can clearly be ascertained by objective documentation, 

such as Defendants’ employee payroll records and wage statements; no subjective 

criteria is required to determine the class’ contours. The fact that an analysis of 

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24 

Defendants’ data is necessary does not render a class unascertainable.”) (citations 

omitted). Aaron’s’ argument against finding that the Class’s membership is 

ascertainable thus fails and should be rejected. 

Aaron’s next argues that the Complaint’s class definition failed because it 

was not limited to New Jersey residents covered by the State consumer protection 

statutes at issue. See Aaron’s Brief at 35 (citing Complaint, ¶ 86). Here again, 

Korrow clarifies herein that she seeks to certify a Class of persons who “entered 

into a rent-to-own contract with Defendant Aaron’s, Inc. in New Jersey . . .” 

Supra at 1 (emphasis added). This limitation based upon the conducting of the 

rent-to-own transaction at a New Jersey store is appropriate for application of New 

Jersey’s consumer protection statutes. See, e.g., Boyes v. Greenwich Boat Works, 

Inc., 27 F. Supp. 2d 543, 546-48 (D.N.J. 1998) (applying Consumer Fraud Act to 

transaction between New Jersey seller and Pennsylvania buyer). Moreover, even if 

New Jersey residency were required for Class membership, this too is readily 

determinable on the face of the Aaron’s RTO contracts, which (not surprisingly) 

have fields for the buyer’s name, address, and telephone number. See Wolfe Decl., 

Ex. A (Korrow contract), at AARON’S 000033 (field for “Customer Name” and 

“Address”). Aaron’s’ argument based on Class member residency thus likewise 

fails and should be rejected. 

Aaron’s’ final argument on ascertainability, that Class membership cannot 

be ascertained for purposes of the TCCWNA claims without first determining 

whether a contract was entered into for consumer or commercial purposes (Aaron’s 

Brief at 36), likewise is legally and factually deficient. Plaintiff addressed this 

concern by specifying that the Class is limited to “natural persons,” but Aaron’s 

claims this is not enough. Aaron’s is wrong. That TCCWNA applies only to 

“consumer contract[s],” defined as those entered into “primarily for personal, 

family or household purposes,” N.J.S.A. 56:12-15, is hardly unusual. Numerous 

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federal and state consumer protection statutes so define their coverage of 

“consumer” transactions, and courts long have held that this is not a bar to class 

certification. See, e.g., Zimmerman v. Portfolio Recovery Assoc’s, LLC, 276 F.R.D. 

174, 180 (S.D.N.Y. 2011) (addressing Fair Debt Collection Practices Act 

(“FDCPA”), 15 U.S.C. § 1692e); Perry v. Beneficial Fin. Co. of N.Y., Inc., 81 

F.R.D. 490, 496 (W.D.N.Y. 1979) (addressing Truth in Lending Act (“TILA”), 15 

U.S.C. §§ 1601 et seq.). In Perry, the court found that the issue of whether a loan 

was a “consumer loan” covered by TILA did not preclude class certification 

because that case, like this one, was: 

brought by a plaintiff who obtained a consumer loan for the purchase 

of household furniture. Moreover, defendant is a lender who loans 

money at interest rates substantially higher than those offered by area 

banks and to lenders [sic] who often cannot obtain credit elsewhere. 

Thus, there is the substantial likelihood that most of the loans herein 

were for consumer purposes. While I do not question defendant’s bare 

assertion that ‘a number of the loans to the proposed class were in all 

likelihood for commercial purposes,’ commonality is preserved by 

limiting the definition of the class to those persons who obtained 

consumer loans. In addition, this court can require class members to 

supply documentation of the nature of their loans as a condition to 

sharing in any class recovery. 

Perry, 81 F.R.D. at 496; cf. Zimmerman, 276 F.R.D. at 180 (“[A]ny disputes 

regarding whether a particular class member’s debt is consumer or commercial can 

be remedied through proper drafting of the claim form, and at the damages phase 

of the case.”). 

Here, it is substantially, if not overwhelmingly, likely that Aaron’s’ RTO 

contracts are consumer contracts. Aaron’s’ Rule 30(b)(6) designee, Scott Harvey, 

admitted that corporate customers buy from Aaron’s only “from time to time,” and 

are identifiable by having an entity’s name rather than a person’s name. See Wolfe 

Decl., Ex. E (Harvey dep.), at 179:17-180:7. Aaron’s’ hired expert also readily 

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admits that the Aaron’s customer base, like that in Perry, typically “lacks access to 

credit markets and is therefore less likely to be able to afford to buy durable 

products outside of the rent-to-own market.” See Dkt. 46-15 (Report of Joel 

Steckel, Ph.D.), ¶ 37. 

The conclusion that Aaron’s RTO customers are overwhelmingly persons 

buying for personal use is further borne out by the agreements Aaron’s produced 

through discovery. An electronic search of the “Customer Name” field of these 

36,016 Class period agreements reveals that names containing any of the words 

“company,” “LLC,” “corp.,” “inc.,” “Ltd.,” “church,” “association,” or 

“associates,” which would suggest a business or non-consumer purpose, turned up 

zero (0) times. McGinn Decl., ¶¶ 27-28. A further review of 442 agreements 

randomly selected from throughout the part of the Class period covered by 

Aaron’s’ document production confirmed that, of these 442 agreements, only one

(1) (0.23%) was entered into by a customer whose name was not that of a natural 

person. Id. ¶¶ 29-31. Although this does not prove that every Aaron’s customer 

had a consumer purpose, the virtual absence of business customers shows that this 

is at most a marginal issue that does not undermine the Class’s ascertainability. 

2. Commonality 

Although Aaron’s wisely does not dispute that the proposed Class is 

sufficiently numerous, it does challenge commonality on the grounds that the 

Supreme Court’s recent Wal-Mart v. Dukes decision “heightened the standards for 

establishing commonality under Rule 23(a)(2)” (Brief at 32 (quoting M.D. ex re. 

Stukenberg v. Perry, 675 F.3d 832, 839-40 (5th Cir. 2012)), and that these 

standards purportedly cannot be satisfied because of changes Aaron’s made to its 

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contract during the Class period and because of asserted defenses to Class 

members’ claims (Brief at 33-34). These arguments fail. 

The Court need not decide whether Dukes creates a new or “heightened” 

standard for commonality. Cf. Sullivan v. DB Investments, Inc., 667 F.3d 273, 345 

(3d Cir. 2011) (en banc) (Jordan, J. dissenting) (“Dukes’s instruction that, for 

questions to be “common” in the sense contemplated by Rule 23, their answers 

must affect the validity of claims, does not set forth a new principle.”). For the 

reasons set forth herein (supra, Argument § I.B.2), Korrow’s RISA-based 

TCCWNA and CFA claims readily satisfy Dukes’ requirement that one or more 

common claims “generate common answers apt to drive the resolution of the 

litigation.” Dukes, 131 S. Ct. at 2551. The Court’s determination of whether each 

of the rent-to-own contract fees that Korrow challenges is prohibited by RISA and 

thus violates TCCWNA and/or the CFA will provide Class-wide and Sub-Classwide answers that will determine each member’s entitlement to relief under these 

statutes. The fact that Aaron’s may have amended its rent-to-own contracts during 

the Class period again is immaterial because the Class and Sub-Classes are defined 

for a period when every Aaron’s RTO contract in New Jersey had one or more of 

the allegedly violative provisions. 

Likewise, Aaron’s’ argument that its asserted “defenses” to certain Class 

members’ claims “will depend upon unique facts on their accounts with Aaron’s” 

(Brief at 33-34) fails because it does not identify any defenses to liability for 

violation of the consumer protection statutes at issue, and any purported defenses 

to damages or other relief do not destroy commonality where (as here) Class 

members allege the same statutory violations based on the same conduct by 

Aaron’s. See, e.g., Baby Neal, supra, 43 F.3d at 57 (finding commonality where 

“individual damage determinations could be made . . . at a separate phase of the 

trial, but the class phase could resolve the central issue of liability for the alleged 

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misrepresentations and omissions.”). Aaron’s’ arguments against finding 

commonality thus likewise fail and should be rejected. 

3. Typicality and Adequacy of Representation 

The crux of Aaron’s’ arguments for denying class certification under Rule 

23(a) is that Ms. Korrow purportedly is not an adequate representative because she 

lacks sufficient knowledge of the Class’s claims (Aaron’s Brief at 13-26), and is 

not typical of the Class because of purportedly unique defenses to her claims (id. at 

27-32). Aaron’s’ arguments on these matters distort both the governing law and 

the facts of record, and thus again fail and should be rejected. 

First, with respect to Korrow’s adequacy and knowledge of the Class’s 

claims, Aaron’s both overstates what governing Circuit law requires and 

understates Korrow’s actual knowledge. The Third Circuit long has held that the 

“adequacy-of-representation test is not concerned whether plaintiff personally 

derived the information pleaded in the complaint or whether he will personally be 

able to assist his counsel.” Lewis v. Curtis, 671 F.2d 779, 789 (3d Cir. 1982); see 

also New Directions Treatment Serv’s v. City of Reading, 490 F.3d 293, 313 (3d 

Cir. 2007) (“Rule 23(a)(4)’s requirement that a class representative fairly and 

adequately protect the interests of the class mainly seeks to uncover conflicts of 

interest between named parties and the class they seek to represent. A class 

representative need only possess a minimal degree of knowledge necessary to meet 

the adequacy standard.”) (citations omitted). Here, Korrow readily satisfies these 

standards, as she has no conflicting interests since hers and the Class’s and SubClasses’ claims are based on the same statutory liability theories applied to the 

same conduct by Aaron’s. 

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Moreover, Ms. Korrow’s deposition testimony (Quirk Decl., Ex. A) 

demonstrates that she (1) has a basic understanding of these claims as an ordinary 

consumer who entered a transaction that Aaron’s admits is aimed at lower-income, 

less educated persons (Steckel Report-Dkt. 46-15, ¶ 37); (2) has performed her 

duties as putative Class representative; and (3) has been harmed by Aaron’s’ 

conduct that she challenges on behalf of the putative Class and Sub-Classes: 

• Case is “mainly about the fees, retail fees and prorate fees.” 

(p.35:3-4); 

• She sued Aaron’s “[b]ecause I believe that they’re fraudulent. That 

they . . . take people’s money with hidden fees.” (p.49:4-8); 

Representation of Class 

• Q: “How much time do you intend to spend on this litigation 

going forward?” 

A: “As much time as it takes.” (p.72:21-24); 

• Q: “How much time personally have you spent on the litigation? . 

. . More than twenty-four hours? 

A: “I believe so.” (p.73:10-19); 

• Q: regarding Complaint ¶ 86, “Do you understand that that’s what 

you’re doing, you’re seeking a certification of that class?” 

A: “Yes.” (p. 263:8-22); 

 

• Q: “Do you remember providing any information to your 

attorneys?” 

A: “Yeah.” (p. 291:1-3); 

• Q: “Do you understand that by filing this case you’re seeking 

relief, you’re seeking to get some money from Aaron’s not just for 

yourself but for all of their customers?” 

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A: “Yes.” (p. 321:1-5). 

“Prorated” Fee Claim

• Q: “[D]o you think there’s anything wrong with that? 

A: “I guess not if the fact is that you’re not paying anything up 

front until you get the furniture. But I paid up front every single time 

before I got anything.” (p.186:9-14); 

• Q: “But did you suffer any financial injury as a result of paying a 

prorated amount?” 

A: “I believe I did because if I paid that amount it was my initial 

payment, that means that you charged me more than what my initial 

payment was supposed to be. So, therefore, if I paid it out of my 

pocket, yes, it’s an injury.” (p.216:2-9); 

“Return Check” Fee Claim 

• “That I may have a problem with. Because the bank already 

charges you a fee - - - - if you have a return check. So I think that 

would be an inappropriate charge.” (p. 189:9-20); 

“Service Plus” Fee Claim and Facts 

• Q: “Did you understand at the time you signed this that you were 

paying a service plus fee?” 

A: “No.” (p. 196:12-15); 

• Q: “Did you ever exercise a payment holiday in connection with 

this agreement?” 

A: “I have no clue what that means.” 

Q: “Would you like to read it?” 

A: “I can barely make out what it says.” (p. 197:18-24); 

• Q: “Were you aware that there’s a damage waiver provision before 

you signed this agreement?” 

A: “No.” (pp. 198:24-199:2); 

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• Q: “Limited warranty, same thing?” 

A: “No.” (p.200:8-9); 

• Q: “Lifetime reinstatement plan?” 

A: “No.” (p.200:10-12); 

• Q: “Did you ever become aware of any of these provisions?” 

A: “No.” (p.200:16-18). 

See Quirk Decl., Ex. A (Korrow dep., transcript excerpt pages noted above). 

 The foregoing demonstrates that Ms. Korrow is a more-than adequate Class 

representative. Aaron’s’ argument that she must show greater knowledge to be 

able to direct the litigation has been rejected time and again in this Circuit. See, 

e.g., Lewis, supra, 671 F.2d at 789 (“The directors argue that plaintiff shareholder 

cannot fairly and adequately represent the interests of the other shareholders unless 

he has knowledge of the material facts in support of his claim. There are certainly 

cases that support such a requirement. We do not believe, however, that such a 

requirement makes vigorous representation of the class any more likely.”); New 

Directions, supra, 490 F.3d at 313 (“A class representative need only possess a 

minimal degree of knowledge necessary to meet the adequacy standard.”) (citation 

omitted); Summerfield v. Equifax Info. Serv’s, LLC, 264 F.R.D. 133, 141 (D.N.J. 

2009) (“A class representative’s lack of knowledge about his case does not render 

him an inadequate representative.”); Barr v. Harrah’s Entertainment, Inc., 242 

F.R.D. 287, 295 (D.N.J. 2007) (“A proposed representative’s lack of particularized 

knowledge concerning the dispute at issue does not render her inadequate given the 

fact that she has retained adequate counsel to represent her.”) (citation omitted); 

Szczubelek v. Cendant Mortg. Corp., 215 F.R.D. 107, 119-20 (D.N.J. 2003) 

(same); Zinberg v. Washington Bancorp, Inc., 138 F.R.D. 397, 408 (D.N.J. 1990) 

(“Contrary to defendants’ assertion, there is no requirement pursuant to Rule 23 

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32 

that the named plaintiff must be totally aware of all the facts concerning the claims 

at issue.”). Ms. Korrow will adequately represent the Class. 

 Aaron’s’ challenges to Korrow’s and her undersigned counsel’s adequacy 

based on alleged “claim-splitting” (Aaron’s Brief at 26-27) also are meritless. First, 

Aaron’s baselessly alleges that “Ms. Korrow learned that certain claims relating to 

usurious interest or time-price differential had been withdrawn upon speaking with 

her attorney at the deposition.” Aaron’s Brief at 27. In fact, Korrow testified that 

she knew about the withdrawal of this claim, that counsel had discussed this with 

her, and that she had had two to three in-person meetings and at least five to ten 

telephone discussions with counsel prior to her deposition, during which time she 

had moved to Florida. See Quirk Decl., Ex. A (Korrow Dep.), at 296:13-297:5 

(awareness and discussion of claim withdrawal); 28:18-31:18 (meetings with 

counsel); 31:19-33:16 (telephone discussions with counsel); 14:6-18 and 62:2-22 

(move to Florida after case was filed). 

Second, Aaron’s’ argument that the decision not to pursue the usury claim 

through class certification is impermissible “claim splitting” that creates a res 

judicata risk (Aaron’s Brief at 26) is equally baseless. A class action “‘is one of the 

recognized exceptions to the rule against claim-splitting.’” Gunnells v. Healthplan 

Serv’s, Inc., 348 F.3d 417, 431-32 (4th Cir. 2003) (quoting 18 Moore’s Federal 

Practice § 131.40[3][e][iii] (2002)) (internal citation omitted); see generally Fed. 

R. Civ. P. 23(c)(4) (“When appropriate, an action may be brought or maintained as 

a class action with respect to particular issues.”). The U.S. Court of Appeals for the 

Sixth Circuit recently addressed this exception in affirming class certification of 

claims for declaratory relief that left open later individual damages actions, 

explaining that “[p]iecemeal certification of a declaratory-relief only class does not 

present a problem of preclusion for class members who wish to pursue damages 

claims” because, ‘‘[p]ursuant to the same general principal that claim preclusion 

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33 

does not apply to matters that could not be advanced in a prior action, individual 

actions remain available to pursue any other questions that were expressly 

excluded from the class action.’” Gooch v. Life Investors Ins. Co. of Am., 672 F.3d 

402, 428 n.2 (6th Cir. 2012) (quoting 18A Wright, Miller & Kane, Federal Practice 

and Procedure § 4455 (2d ed. 1996)). Since Plaintiff excluded this separate claim 

addressing the amount of interest charged from the class action, a Class member’s 

pursuit of this claim in a separate action would not be barred by res judicata. 

Aaron’s’ “claim splitting” argument thus fails and should be rejected. 

Finally, Aaron’s’ challenge to Korrow’s adequacy and typicality based on its 

assertion of counterclaims and defenses against her and Class members (see

Aaron’s Brief at 23-25, 28-32) likewise fails. Plaintiff addresses the effect of 

Aaron’s’ asserted counterclaims and defenses with respect to the Class as a whole 

more fully below in the discussion of satisfaction of Rule 23(b)(3) (infra § II.C). 

For purposes of her typicality and adequacy, the counterclaims and defenses 

Aaron’s asserts go to her performance under the contract and amounts she 

allegedly owes it that might offset her recovery of statutory relief. See Aaron’s 

Brief at 28-29. Since these are not defenses to liability under the consumer 

protection statutes underpinning Korrow’s claims challenging the same practices 

that the Class and Sub-Classes challenge, they do not create individualized liability 

issues that would render her atypical or inadequate. See Baby Neal, supra, 43 F.3d 

at 58 (“Where an action challenges a policy or practice, the named plaintiffs 

suffering one specific injury from the practice can represent a class suffering other 

injuries, so long as all the injuries are shown to result from the practice.”). 

In Allen v. Holiday Universal, 249 F.R.D. 166 (E.D. Pa. 2008), the court 

rejected arguments almost identical to those Aaron’s makes here based on alleged 

counterclaims and defenses within a class in finding named plaintiffs typical and 

adequate to represent a class asserting similar claims challenging facially unlawful 

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fees. There, as here, the defendants asserted that “there is a conflict between health 

club members who defaulted on their contracts and members who did not,” and 

that “certification of the proposed Class will expose members who defaulted on 

their contracts to counterclaims for the unpaid balances.” Id. at 182-83 

(emphasis added). The court squarely rejected this argument, finding that 

“hypothetical counterclaims do not impact class certification, particularly where 

the record provides no basis for finding that such counterclaims would create 

difficulties that outbalance the advantages of class treatment.” Id. at 183. The 

court explained that it: 

is not persuaded by the defensive ‘sabre-rattling’ that such 

counterclaims, even if they in fact exist, cause a conflict between class 

members. In some ways, defaulted class members have an even 

greater interest in the lawsuit than non-defaulted members because 

they have more to gain. A person who is in default may well want to 

void his or her contract or, if appropriate, cure the default by offsetting any monetary damages.

Id. (emphasis added). The court thus found that a named plaintiff who was alleged 

to be in default would adequately represent the class. Id. This Court should reach 

the same conclusion and reject the same arguments that Aaron’s makes here. 

 Even if Korrow’s alleged indebtedness were relevant, she still would be an 

adequate Class representative because all of the statutory violations she alleges are 

defenses to Aaron’s’ counterclaim and more than offset its asserted value. Aaron’s 

claims that Korrow owes it $439.71 for amounts unpaid for her six-month lease 

period. See Harvey Decl. (Dkt. 45-2), ¶¶ 9-10. This is an effective admission that 

Aaron’s violated the CFA by suing her for $3,000 on the same account after it 

repossessed the goods in December 2009, which action it dismissed only after she 

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35 

retained a Legal Services attorney.8 Aaron’s thus misrepresented and improperly 

imposed a debt against Korrow that was $2,560.29 in excess of what it now says 

she owed, causing her an ascertainable loss for which the CFA entitles her to treble 

damages. See Cox v. Sears Roebuck & Co., 138 N.J. 2, 22, 647 A.2d 454, 464 

(1994) (imposition of improper debt may constitute ascertainable loss under CFA). 

The counterclaim is further offset by Korrow’s claims as a Class and Sub-Class 

member, including her TCCWNA statutory damages claim of at least $100 

(N.J.S.A. 56:12-17), and CFA claim for treble the unlawful fees she paid, totaling 

$200.46 (N.J.S.A. 56:8-19). Finally, Aaron’s’ alleged damages are diminished 

because they were mitigated when it repossessed the goods from Korrow and 

almost immediately re-leased them to other customers within the claimed sixmonth lease period. See Wolfe Decl., Ex. D (Aaron’s 307345-307352) (re-lease 

dates in December 2009-January 2010); see also N.J.S.A. 12A:9-615 and 12A:2A527(2) (consumer is entitled to credit when property is resold or released after 

repossession). In short, Korrow’s alleged debt does not exist and, even if it did, 

would be irrelevant to her demonstrated adequacy to represent the Class. 

In sum, Plaintiff and the proposed Class and Sub-Classes readily satisfy the 

prerequisites of Rule 23(a). The arguments to the contrary that Aaron’s raised in its 

preemptive motion distort both the governing law and the facts of record before the 

Court. For all of the reasons set forth herein, the Court should hold that Plaintiff 

has satisfied all of the express and implicit requirements of Rule 23(a) for class 

action certification. 

 

8

 Aaron’s falsely suggests that the higher amount sought in the small claims case 

was justified because the goods “had not been returned” at that time. Harvey Decl. 

(Dkt. 45-2), ¶11-12. However, the small claims case was filed on December 21, 

2009 (see Quirk Decl., Ex. B, p.2), which was ten days after the date when Aaron’s 

says it repossessed the goods, December 11, 2009. Harvey Decl. (Dkt. 45-2), ¶11. 

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II. The Class and Sub-Classes Satisfy All Requirements of Rule 23(b)(3). 

A. The Common Issues of Law and Fact Predominate as to All of 

Plaintiff’s and the Class’s and Sub-Classes’ Claims. 

The predominance inquiry examines “whether the proposed class is 

sufficiently cohesive to warrant adjudication by representation.” In Re Community 

Bank of No. Va., 418 F.3d 277, 307-308 (3d Cir.2005) (citing Amchem Prod’s, Inc. 

v. Windsor, 521 U.S. 591, 623-24 (1997)). The “presence of individual questions 

... does not mean that the common questions of law and fact do not predominate.” 

Eisenberg v. Gagnon, 766 F.2d 770, 786 (3d Cir. 1985). Here, common issues 

clearly predominate, both as to the Class Claims under TCCWNA and the SubClasses claims under the CFA. 

1. Common Questions Predominate With Respect to the Class 

Claims Under TCCWNA. 

The proposed Class consists of tens of thousands of New Jersey consumers 

whose RTO contracts with Aaron’s required payment of one or more of the 

“prorated” amount, “Service Plus” fee, or “Return Check” charge for checks 

returned “for any reason” that RISA and thus TCCWNA prohibit. The lawfulness 

of each of these provisions, which are easily identified on the face of the standardform RTO contracts, is a predominating question common to the Class. See, e.g.,

Sacred Heart Health Sys. v. Humana Military Healthcare Servs., 601 F.3d 1159, 

1171 (11th Cir. 2010) (“It is the form contract, executed under like conditions by 

all class members, that best facilitates class treatment.”); Dupler v. Costco 

Wholesale Corp., 249 F.R.D. 29, 37-38 (E.D.N.Y. 2008) (“An overwhelming 

number of courts have held that claims arising out of form contracts are 

particularly appropriate for class action treatment.”); Kleiner v. First Nat'l Bank of 

Atlanta, 97 F.R.D. 683, 692 (N.D. Ga. 1983) ("[C]laims arising from 

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interpretations of a form contract appear to present the classic case for treatment as 

a class action”). Whether each fee provision violates RISA and thus TCCWNA 

are questions of law that, once decided, will apply to all Class members. 

Moreover, because TCCWNA provides minimum statutory damages of $100 

without requiring harm, there is no need for individualized determinations of 

causation, or for damages calculations with respect to the smaller value prorated 

amount or Return Check fee claims. For the Service Plus fee claim, where 

required monthly payments of the fee may have exceeded $100, a Class member’s 

damages in the amount paid still is readily determinable from Aaron’s’ payment 

records. See Wolfe Decl., Ex. F (Hardison dep.), at 174:12-14. Thus, appropriate 

relief for these claims is readily determinable. 

Since Class membership is defined by a contract’s inclusion of one or more 

of the challenged fee provisions alleged to violate RISA and TCCWNA, the 

determination of Class membership plus the Court’s rulings on the alleged RISA 

and TCCWNA violations will determine every Class member’s right to TCCWNA 

relief. See Barrows v. Chase Manhattan Mortg. Corp., 465 F. Supp. 2d 347, 362 

(D.N.J. 2006) (TCCWNA is “violated if a contract or notice simply contains a 

provision prohibited by state or federal law, and it provides a remedy even if a 

plaintiff has not suffered any actual damages.”). In short, it is difficult to imagine 

a claim in which common questions predominate over individual ones to a greater 

extent than the Class TCCWNA claims here. 

 

2. Common Questions Predominate With Respect to the SubClass Claims Under the CFA. 

The CFA Sub-Class claims are based on Class members’ payments of the 

unlawful prorated and Service Plus Fees, which ranged from under $10 for the 

one-time prorated charge to perhaps several hundred dollars in monthly Service 

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Plus fees paid over the full duration of an RTO contract. These claims cannot 

practicably be vindicated outside of a class action. See, e.g., Lee v. Carter-Reed 

Co., LLC, 203 N.J. 496, 517-18, 4 A.3d 561, 574 (2010) (“A class action permits 

[consumer fraud] claimants to band together and, in doing so, gives them a 

measure of equality against a corporate adversary, thus providing a procedure to 

remedy a wrong that might otherwise go unredressed.”) (citations omitted). 

The CFA Sub-Class claims are susceptible to common proofs on all 

elements and easily satisfy the predominance requirement. A CFA claim has 

“three elements: (1) unlawful conduct by the defendants; (2) an ascertainable loss 

on the part of the plaintiff; and (3) a causal relationship between the defendants' 

unlawful conduct and the plaintiff's ascertainable loss.” New Jersey Citizen Action 

v. Schering-Plough Corp., 367 N.J. Super. 8, 12-13, 842 A.2d 174, 176 (App.Div. 

2003). As to “unlawful conduct,” Korrow alleges that, by charging class members 

“Service Plus” fees and “prorated” charges prohibited by RISA, Aaron’s engaged 

in deceptive and unconscionable commercial practices in violation of the CFA at 

N.J.S.A. 56:8-2. See Perez, 186 N.J. at 220, 892 A.2d 1275 (reinstating CFA 

claim based upon overcharges in violation of RISA). If these allegations succeed 

or fail for one Class member who was charged these fees, they succeed or fail for 

all Class members. As with the TCCWNA claims, this analysis involves a review 

of standard documents and practices, and an application of the law to them. 

As to ascertainable loss, the unlawful fees Aaron’s charged that Korrow and 

Sub-Class members paid constitute an ascertainable loss under the CFA. See, e.g., 

Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 559, 964 A.2d 741, 751 (2009) 

(“[T]he overcharge in question is one that can be readily quantified and thus is 

ascertainable within the meaning of the CFA.”). 

As to loss-causation, Korrow and Sub-Class members would not have paid 

these fees if Aaron’s had not charged them. Thus, Korrow and Sub-Class members 

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paid money for these fees as a result of Aaron’s unlawful practice of charging 

them. Again, since the CFA Sub-Class members are defined as customers who 

actually paid a “Service Plus” fee or a “prorated amount” – a characteristic readily 

determined from Aaron’s records – the determination of Sub-Class membership 

effectively determines both the presence of an ascertainable loss and its causation. 

The amount of damages to which each CFA Sub-Class is entitled can be 

readily calculated from Defendant’s records by simply trebling the amounts paid 

for the unlawful fees and charges. While this phase of the litigation will not be as 

uniform and simple as the liability phase, it is perfectly manageable, and does not 

affect predominance, as "it has been commonly recognized that the necessity for 

calculation of damages on an individual basis should not preclude class 

determination when the common issues which determine liability predominate.” 

Bogosian v. Gulf Oil Corp., 561 F.2d 434, 456 (3d Cir. 1977). 

3. Aaron’s’ Arguments Against Finding That Common Issues 

Predominate Fail as a Matter of Law and Fact. 

 Aaron’s’ argument that predominance fails because of the supposed need 

for individualized determinations as to whether class members’ rent-to-own 

transactions were “consumer transactions” fails in light of its numerous admissions 

that its business is the sale of “consumer” goods to low and middle-income 

“consumers.”9

 These admissions are corroborated by the sample customer files 

 

9 See Quirk Decl., Ex. D (Aaron’s brochure to potential franchisees stating 

that “The typical leasing customer is an hourly wage job-holder earning a 

weekly paycheck and living in a rented house or apartment. They owe little 

consumer debt, hold no real estate or financial instruments, have no savings 

account and function without credit cards. They operate on a cash and carry 

basis.”); id., Ex. C (Aaron’s 2012 10-Q report filed with the SEC stating 

“We believe that... the limited number of retailers that focus on credit 

installment sales to lower and middle income consumers and increased 

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produced by Aaron’s in discovery, showing only one non-natural person listed as 

the consumer. See discussion at Section I.C.1., supra. 

Moreover, this argument would apply to every case brought under RISA and 

TCCWNA, as well as numerous federal statutes that cover transactions for 

“personal, family, and household purposes” such as the FDCPA and TILA (see 

discussion at section I.C.1., supra.) and thus would strip New Jersey consumers of 

their ability to vindicate their rights under these statutes through a class action. Not 

surprisingly, most courts that have addressed this type of argument against class 

certification have rejected it. See, e.g., Haynes v. Logan Furniture Mart, Inc., 503 

F.2d 1161, 1167 (7th Cir. 1974); Perry v. Beneficial Finance Co., 81 F.R.D. 490, 

496 (W.D.N.Y. 1979); Passeggio v. Cosmetique Inc., 1999 U.S. Dist. LEXIS 7607, 

24-25 (E.D.N.Y. Apr. 30, 1999), and cases cited therein. See also Lewis v. Riddle, 

1998 U.S. Dist. LEXIS 20465, 10 (WD La., 1998)(taking contrary position, and 

acknowledging that “The court realizes that a review of the published decisions 

may indicate that it is in the minority in not certifying a class based on concerns as 

to how this issue will be resolved.”) In these cases, the courts rejected that notion 

that where, as here, the vast majority of transactions are consumer transactions, 

predominance is not defeated by the possibility of a few possible business 

transaction. For example, in Haynes, the Court explained, 

the defendant argues... that some purchases were made for 

commercial rather than personal purposes... While we need not 

decide these points at this time, there is no indication that the 

commercial users of credit at this retail home furnishings 

 

consumer credit constraints during current economic conditions have created 

a market opportunity for our unique sales and lease ownership concept...We 

believe that the segment of the population targeted by our sales and lease 

ownership division comprises approximately 50% of all households in the 

United States and that the needs of these consumers are generally 

underserved.”) 

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establishment are other than minimal in the overall picture. Such 

commercial purchases would frequently be readily identified by 

the listing of the name of the business as the purchaser in the 

contract. Even if it is necessary to review the contracts 

individually to eliminate business purchases... "such a task would 

be neither herculean, inhibiting, nor for that matter . . . unique." 

Haynes at 1167, quoting Beard v. King Appliance Co., 61 F.R.D. 434, 438 (E.D. 

Va. 1973) (internal citations omitted). 

B. A Class Action is Superior to Other Methods of Proceeding, as 

There is No Realistic Alternative to a Class Action for Class 

Members’ Small-Value Statutory Claims. 

Rule 23(b)(3)’s “superiority” requirement asks the Court “to balance, in 

terms of fairness and efficiency, the merits of a class action against those of 

alternative available methods of adjudication.” In re Warfarin Sodium Antitrust 

Litig., 391 F.3d 516, 533-34 (3d Cir. 2004) (citation omitted). In determining 

superiority, a court may consider the following factors: (1) the class members' 

interests in individually controlling the prosecution or defense of separate actions; 

(2) the extent and nature of any litigation concerning the controversy already 

begun by or against class members; (3) the desirability of concentrating the 

litigation in the particular forum; and (4) the likely difficulties in managing a class 

action. Fed.R.Civ.P. 23(b)(3). 

Where “there are a potentially large number of class members” with “little 

interest in ‘individually controlling the prosecution or defense of separate actions,’ 

Fed. R. Civ. P. 23(b)(3) (A), because each consumer has a very small claim in 

relation to the cost of prosecuting a lawsuit,” Warfarin Sodium, supra, at 534, then 

a class action is clearly superior to any other method of proceeding. See also In re 

Ford Motor Co. Ignition Switch Prod. Liab. Litig., 174 F.R.D. 332, 351 (D.N.J. 

1997) (class treatment preferred when “the recovery being sought by each of the 

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Plaintiffs is not sufficiently large to render individualized litigation a realistic 

possibility”) (citing Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 809 (1985)). A 

class action is especially superior where, as here, the “targets” of the challenged 

practices are lower income consumers. Casale v. Kelly, 257 F.R.D. 396, 407 

(S.D.N.Y. 2009) (In determining the superiority requirement of Rule 23(b)(3), "[i]t 

is appropriate for the court to consider the 'inability of the poor or uninformed to 

enforce their rights and the improbability that large numbers of class members 

would possess the initiative to litigate individually.'" (quoting Haynes v. Logan 

Furniture Mart, 503 F.2d 1161, 1164-5 (7th Cir. 1974)). 

Here, Plaintiff seeks certification of a Class of thousands of consumers who 

were charged relatively modest fees (the Service Plus Fee is 10% of the cash price 

of the goods and the “prorated amount” is less than a half-month’s payment) in an 

allegedly unlawful manner. In fact, in many of the class members’ transactions, the 

fees at issue are less than this Court’s filing fee. Individual actions therefore are not 

a realistic alternative. See, e.g., Carnegie v. Household Int’l, Inc. , 376 F. 3d 656, 

661 (7th Cir. 2004) (“The realistic alternative to a class action is not 17 million 

individual suits, but zero individual suits, as only a lunatic or a fanatic sues for 

$30”). This is especially true given Defendant’s admitted target population is 

lower income consumers, who are extremely unlikely to be aware of their rights 

under laws like RISA, TCCWNA and the CFA or have the means to enforce them. 

C. Aaron’s’ Arguments Against Finding Superiority Based on its 

Possible Assertion of Unspecified Counterclaims Against Class 

Members Fails as a Matter of Law and Fact. 

In its preemptive motion, Aaron’s claims that some Class members may be 

subject to counterclaims and setoff defenses similar to those it filed against 

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Korrow.10 These alleged counterclaims and defenses are entirely speculative, 

however, as Aaron’s provides no factual information other than that its declarant 

“know[s] that there are numerous customers in New Jersey who have delinquent 

accounts, just like Ms. Korrow.” Harvey Decl. (Dkt. 45-2), ¶ 50. Based on this 

barebones assertion, Aaron’s argues that its mere threat of filing any counterclaims 

is sufficient to defeat a motion for class certification. Aaron’s thus tries to 

prospectively transform this case from a straightforward action seeking redress for 

statutory violations apparent on the face of Aaron’s’ contracts, over which the 

Court has original jurisdiction, into a mass of state-law collection actions over each 

of which the Court has no original jurisdiction. 

Courts across the country have rejected the argument Aaron’s makes here 

that threatened counterclaims against individual class members over which there is 

no original jurisdiction are grounds to deny class certification under Rule 23. 

Indeed, a majority of federal circuit courts to consider the issue have rejected this 

argument, declining to exercise supplemental jurisdiction over such counterclaims 

filed in response to claims over which federal courts have original jurisdiction. 

The question of any outstanding liability that class members may owe on 

their contracts with Aaron’s is unrelated to Aaron’s’ liability for the statutory 

violations alleged in the class action complaint, and is more properly addressed in 

the damages phase of this proceeding. Baby Neal, supra, 43 F.3d at 57. Further, 

the Court has broad authority to ensure that the relief afforded is equitable with 

 

10 Aaron’s has identified its threatened claims against the absent class members as 

“counterclaims and set-off defenses.” See, e.g., Aaron’s Brief at 40. A “setoff” 

generally is characterized as “a defendant’s counterdemand against the plaintiff, 

arising out of a transaction independent of the plaintiff’s claim.” Black’s Law 

Dictionary (9th Ed. 2009). Because Aaron’s’ claims arise out of the same lease 

transactions forming the basis of Plaintiff’s class claims, see Aaron’s Brief at 28, 

Aaron’s’ threatened defenses will be referred to as counterclaims below. 

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regard to individual class members who may owe a debt obligation. 

1. Aaron’s’ Speculative, Unfiled Counterclaims Cannot Be 

Used to Undermine Class Certification. 

As an initial matter, Aaron’s has not submitted any evidence concerning 

whether it already has filed individual collection actions against any putative class 

members, in which case it would be barred from raising such claims in this action. 

Aaron’s may have brought individual collection actions in the Small Claims 

Section of the New Jersey Superior Court, as it did against Korrow, or it may have 

sold the debt for collection to a third party to obtain a judgment in its own name. 

In either case, if any of Aaron’s’ threatened counterclaims are the subject of a final 

adjudication in State Court, Aaron’s is not permitted to relitigate those collection 

actions as counterclaims to Plaintiff’s class claims. Aaron’s asserts that it 

generally does not file such collection actions against individuals. Harvey Decl. 

(Dkt. 45-2), ¶ 54. However, the only record evidence relating to its collection 

practices shows that it did in fact file a collection action, against Korrow. 

As to the threatened counterclaim itself, Aaron’s fails to articulate whether 

the claim would be brought on a class-wide basis or as individual claims against 

class members. If brought on a class basis, Aaron’s must demonstrate that the 

counterclaim, like all class claims, satisfies all requirements of Fed. R. Civ. P. 23. 

Aaron’s has provided no evidence that its speculative counterclaim could satisfy 

these requirements. Aaron’s asserts that “numerous” customers have delinquent 

accounts, but then admits that it has not investigated these accounts to determine 

whether these customers owe money. Harvey Decl. (Dkt. 45-2), ¶¶ 50-51. 

Regardless of the form of the unfiled counterclaim, important policy 

arguments, and several published decisions, counsel against permitting Aaron’s to 

raise the specter of an unfiled collection counterclaim as a means to attempt to 

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defeat class certification. 

Courts have continually looked with disfavor on “hypothetical” 

counterclaims that are raised solely in response to the filing of a class action 

complaint as a means to oppose class certification, dismissing such claims as mere 

“sabre-rattling” or a “tactical device” to encourage plaintiffs to opt out. In Allen v. 

Holiday Universal, 249 F.R.D. 166 (E.D. Pa. 2008), the court stated that 

“hypothetical counterclaims do not impact class certification, particularly where 

the record provides no basis for finding that such counterclaims would create 

difficulties that outbalance the advantages of class treatment.” Id. at 183; see also, 

Johnson v. Aronson Furniture Co., 1998 U.S. Dist. LEXIS 14454, 1998 WL 

641342 (N.D. Ill. Sept. 11, 1998) (“We decline to exercise jurisdiction over 

Aronson’s threatened counterclaims for debt collection against Johnson and all 

putative plaintiffs in default...”); O’Sullivan v. Countrywide Home Loans, Inc., 

202 F.R.D. 504 (S.D. Tex. 2001), (“The mere prospect of speculative 

counterclaims does not defeat certification.”), rev’d on other grounds, 319 F.3d 

732 (5th Cir. 2003). The Allen court stated that it was “not persuaded by the 

defensive ‘sabre-rattling’ that such counterclaims, even if they in fact exist, cause a 

conflict between class members...” Allen, 249 F.R.D. at 183; see also Donson 

Stores, Inc. v. American Bakeries Co., 58 F.R.D. 485, 489 (S.D.N.Y. 1973) (“...the 

right to counterclaim is readily subject to abuse as a tactical device to encourage 

plaintiffs to opt out.”). 

The Allen court distinguished cases such as Heaven v. Trust Co. Bank, 118 

F.3d 735 (11th Cir. 1997), cited in Aaron’s’ Brief at 42, noting that “in Heaven, the 

court pointed to the manageability problems caused by counterclaims that had 

already been filed.” Allen, 249 F.R.D. at 183 (emphasis in original); cf. Heaven, 

118 F.3d at 738, citing Roper v. Consurve, Inc., 578 F.2d 1106 (5th Cir. 1978), 

aff’d, 445 U.S. 236, 100 S. Ct. 1166, 63 L. Ed. 2d 427 (1980), (“The former Fifth 

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Circuit held that denial of class certification based on speculation regarding the 

potential assertion of counterclaims was an abuse of discretion.... In this case, the 

district court below engaged in no such speculation.”) (internal citation omitted). 

In addition, important policy considerations underlying the Federal Rules of 

Civil Procedure counsel against allowing Aaron’s to raise the specter of yet-unfiled 

counterclaims to defeat class certification. “The objectives of Rule 23 class actions 

are to promote: (1) judicial economy (2) access to judicial relief (3) deterrence of 

unlawful conduct.” Newberg on Class Actions § 4.34, at 2-306 (4th Ed. 2002). 

“Assertion of counterclaims against absent class members is inconsistent with all 

three of these objectives.... It is generally recognized that allowing counterclaims 

against Rule 23(b)(3) class members will discourage their participation in the class 

suit and will encourage option out, thus nullifying all three objectives of Rule 23.” 

Id.; see also, Johnson, supra, 1998 U.S. Dist. LEXIS 14454 at *18 (“exercise of 

jurisdiction over the threatened counterclaims would create ‘a tremendous chilling 

effect’ on the private enforcement of TILA and the Illinois and Consumer Fraud 

and Deceptive Trade Practices Act thereby impairing the objectives of these 

statutes.”); Channell v. Citicorp, 1996 U.S. Dist. LEXIS 14506 at *8, 1996 WL 

563536 (N.D. Ill. September 27, 1996) (Aaron’s’ state-law debt collection 

counterclaim “would create a tremendous ‘chilling effect’ over the private 

enforcement of the [Consumer Leasing Act], thereby seriously impairing the 

congressional objectives which led to the passage of this legislation.”). 

The legislative objectives behind the statutes underlying Korrow’s claims 

are similar to those addressed in Johnson and Channell. Both TCCWNA and the 

CFA provide private rights of action and payment of attorney’s fees for successful 

claims. N.J.S.A. 56:12-17; N.J.S.A. 56:8-19. The CFA’s treble damages and feeshifting provisions were enacted to provide “easier access to the courts for the 

consumer, increase the attractiveness of consumer actions to attorneys and also 

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help reduce the burdens on the Division of Consumer Affairs” by promoting 

increased private enforcement of the Act. Cox v. Sears Roebuck & Co., 138 N.J. 2, 

15, 647 A.2d 454, 460 (1994) (quoting Governor's Press Release for Assembly Bill 

No. 2402, at 2 (June 29, 1971)). 

Korrow’s claims arise out of certain fees and charges imposed on the face of 

Aaron’s’ form contracts. In this way, her claims are analogous to the contract 

disclosure-based Truth in Lending Act, Consumer Leasing Act, and related state 

law claims raised by the plaintiffs in Johnson and Channell. Allowing Aaron’s to 

do nothing more than threaten to pursue a collection action against individuals with 

valid causes of action under TCCWNA and the CFA would seriously undermine 

the purposes for which the New Jersey legislature enacted these statutes, and 

would create a “chilling effect” on private enforcement. 

Moreover, in the present action, Aaron’s has either already pursued an 

individual collection action against putative class members alleged to be in default, 

or it has voluntarily abandoned such collection efforts. Aaron’s’ allegation that it 

is compelled to bring a counterclaim in response to the pending class claims is 

addressed in the following section. 

2. Aaron’s’ Threatened Counterclaim is Not Compulsory. 

Relying on the Declaration of its Vice President of Operational Support, 

Aaron’s argues that it is “compelled to assert its counterclaim” against Plaintiff and 

all absent class members who allegedly owe debts to Aaron’s. Harvey Decl. ¶ 54. 

Aaron’s then cites several cases in its brief in support of its assertion that its 

threatened counterclaims against the absent class members are compulsory. 

Aaron’s Brief at 41. However, the views expressed in these cases are in a clear 

minority among courts that have considered whether state-law debt collection 

counterclaims filed in response to consumer protection actions are compulsory 

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under Fed. R. Civ. P. 13(a). Specifically, at least four federal appellate courts have 

rejected this argument and held instead that such debt collection counterclaims are 

permissive. See Cabrera v. Courtesy Auto, Inc., 192 F. Supp. 2d 1012, 1019 (D. 

Neb. 2002) (summarizing federal Circuit court decisions); Peterson v. United 

Accounts, Inc., 638 F.2d 1134, 1136 (8th Cir. 1981) (state-law collection 

counterclaim to complaint alleging Fair Debt Collection Practices Act violations is 

not compulsory). 

The Third Circuit does not appear to have directly addressed the issue of 

whether state-law collection counterclaims are compulsory or permissive. 

However, at least one District Court in the Third Circuit has expressly adopted the 

majority view, and others have held that debt collection counterclaims are 

permissive rather than compulsory. Brady v. C.F. Schwartz Motor Co., 723 F. 

Supp. 1045, 1049 (D. Del. 1989) (holding plaintiff’s TILA counterclaim 

permissive in state court collection action); see also Ayres v. National Credit Mgmt 

Corp., 1991 U.S. Dist. LEXIS 5629 at *14 (E.D. Pa. 1991) (declining to exercise 

supplemental jurisdiction over collection counterclaim in individual Fair Debt 

Collection Practices Act action). 

Accordingly, the majority view in this Circuit and among others is that debt 

collection counterclaims are not compulsory in response to federal actions seeking 

redress for statutory violations. In fact, some courts and commentators have found 

Fed. R. Civ. P. 13 to be entirely inapplicable to class actions. The Federal Rules of 

Civil Procedure direct a responding party to file a counterclaim against an 

“opposing party” when that claim “arises out of the same transaction or occurrence 

that is the subject matter of the opposing party’s claim,” and “does not require 

adding another party over whom the court cannot acquire jurisdiction.” Fed. R. 

Civ. P. 13(a). However, absent class members are not deemed “opposing parties” 

under Rule 13(a). In Donson Stores, Inc. v. American Bakeries Co., supra, the 

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court held that “...Rule 23 contemplates an adversary contest involving only the 

representative members of the class, with all other members of the class being 

permitted passively to await the outcome of the principal suit.... Therefore, in the 

absence of any reported decision holding that absent class members are parties for 

the purposes of Rule 13, I hold that they are not.” 58 F.R.D. at 489; see also, Van 

Gemert v. Boeing Co., 590 F.2d 433, 440 at n. 15 (2d Cir. 1978), aff’d 444 U.S. 

472 (1980) (“Absentees are not considered parties against whom counterclaims 

under Fed. R. Civ. P. 13 may be asserted ...”); In re Sugar Industry Antitrust 

Litigation, 73 F.R.D. 322, 349 (E.D. Pa. 1976) (“This Court is convinced that 

Donson states the correct rule and, therefore, all counterclaims that purport to state 

a cause of action against unnamed class members must be dismissed.”), rev’d on 

other grounds, 579 F.2d 13 (3d Cir. 1978). 

One commentator has argued that “Courts may properly conclude that Rule 

13 is inapplicable when a class action is involved,” in part because “[A]bsent class 

members neither commence class actions nor usually exercise any meaningful 

control over the course of the class litigation.... Thus, class members do not fill 

the role that this aspect of Rule 13 was designed to afford.” Newberg on Class 

Actions, supra, § 4:34 at 2-305. 

Further, absent class members are entitled to due process protections with 

regard to the counterclaims threatened by Aaron’s. “[P]rocedural due process 

standards mandate that counterclaims against individual class members, if 

permitted, can only be valid if the court has personal jurisdiction and venue over 

the countersued absent class member, who also must be served with counterclaim 

papers so that the class member can individually defend against the counterclaim.” 

Newberg on Class Actions § 4.34 at 2-303. 

Accordingly, both the plain text of the Federal Rules and the policies 

underlying these Rules demonstrate that Aaron’s is in no way compelled to bring 

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any counterclaims against the putative class members for deficiencies on the 

underlying lease agreements. Aaron’s would not be precluded from bringing 

individual collection actions against class members in state court when those 

collection claims were neither litigated nor determined in the class action. See 

generally, Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867, 874 (1984) 

(“A judgment in favor of either side is conclusive in a subsequent action between 

them on any issue actually litigated and determined, if its determination was 

essential to that judgment.”). 

3. Even if They Were Filed, the Court Should Decline to 

Exercise Jurisdiction Over Any State-Law Counterclaim. 

In attempting to convince the Court to deny Plaintiff’s motion for class 

certification based on an unfiled and unarticulated counterclaim, Aaron’s has 

impliedly requested that the Court exercise supplemental jurisdiction over its state 

law collection action(s). However, the very reasons that Aaron’s has identified in 

support of its position that the threatened counterclaim would “destroy[] 

predominance,” Aaron’s Brief at 41, have been recognized by federal statute and 

federal courts as important justifications for a court to deny supplemental 

jurisdiction over such counterclaims. 

The Court has original jurisdiction over Plaintiff’s claims pursuant to 

Aaron’s’ application under the Class Action Fairness Act, 28 U.S.C. § 1332(d). In 

contrast, Aaron’s’ threatened counterclaims have no independent federal 

jurisdictional basis, and are instead based on state contract law. These collection 

claims normally would be brought in state court, as evidenced by Aaron’s’ 

collection action filed against Ms. Korrow in the Superior Court of New Jersey. 

In order for Aaron’s’ state contract law claims to be entertained by a federal 

court, Aaron’s must plead sufficient grounds for the federal court to adjudicate 

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such claims under the federal supplemental jurisdiction statute, 28 U.S.C. § 1367. 

This statute provides that federal courts may exercise supplemental jurisdiction 

over all claims “that are so related to the claims in the action within such original 

jurisdiction that they form part of the same case or controversy under Article III of 

the United States Constitution.” 28 U.S.C. § 1367(a). However, even when the 

claims do form part of the same case or controversy, the exercise of supplemental 

jurisdiction is not mandatory, and the statute further provides: 

(c) The district courts may decline to exercise supplemental 

jurisdiction over a claim under subsection (a) if-- 

(1) the claim raises a novel or complex issue of State law, 

(2) the claim substantially predominates over the claim or claims over 

which the district court has original jurisdiction, 

(3) the district court has dismissed all claims over which it has 

original jurisdiction, or 

(4) in exceptional circumstances, there are other compelling reasons 

for declining jurisdiction. 

28 U.S.C. § 1367(c). 

In Channell v. Citicorp National Services, 89 F.3d 379 (7th Cir. 1996), the 

court addressed the grounds for declining to exercise supplemental jurisdiction in 

the context of a counterclaim filed in a consumer class action matter. The court 

determined that, although the counterclaim was part of the same case or 

controversy as the plaintiff’s class claims, the fact “[t]hat a counterclaim falls 

within the outer boundary of § 1367(a) is not the end of matters...” Id. at 386. 

The court noted that two of the four situations identified in §1367(b) may apply to 

authorize the District Court to decline to exercise jurisdiction over the 

counterclaim: 

Calculation of the sum due under each lease, and adjudication of 

defenses specific to particular lessees, may be considerably more time 

consuming than the adjudication of the class's claims under the Act.... 

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To put this in the statutory language: Citicorp’s counterclaim may 

“substantially predominate[] over the claim or claims over which the 

district court has original jurisdiction”. 28 U.S.C. §1367(c)(2). Then 

there is §1367(c)(4): “exceptional” circumstances that provide 

“compelling” reasons to decline supplemental jurisdiction. Citicorp’s 

counterclaim recasts this case as a class action for damages, which 

although not unheard-of is certainly “exceptional.” 

Id. at 386-87. 

The Seventh Circuit remanded the matter to the district court, which again 

declined to exercise supplemental jurisdiction over the counterclaim, finding that 

the counterclaim “would transform this litigation into a virtual Pandora’s Box of 

96 separate collection actions which this Court is ill-equipped to handle,” and thus 

substantially predominating over plaintiff’s class claims. Channell v. Citicorp 

Nat’l Servs., supra, 1996 U.S. Dist. LEXIS 14506 at *6. The District Court noted 

that “state courts have set up special small claims courts that have streamlined and 

cost-effective procedures specifically designed to handle these types of small 

individual contract actions.” Ibid. With regard to exceptional circumstances, the 

District Court held that “the potential mass adjudication of claims against the 

proposed class of lessees raises serious issues of fundamental fairness and 

unnecessary personal jurisdiction issues.” Id. at *7-*8. 

By Aaron’s’ own admission, the threatened counterclaims against class 

members would “plung[e] this litigation into thousands of mini-trials,” Aaron’s 

Brief at 40, and “would involve an extraordinarily time consuming, individualized 

inquiry at the customer level.” Harvey Decl. ¶ 56. Similar to the counterclaim 

described in Channell, Aaron’s’ counterclaim would “recast[] this case as a 

Aaron’s class action for damages,” substantially predominating over the claim to 

which this Court has original jurisdiction, and creating an “exceptional” 

circumstance warranting the declination of supplemental jurisdiction. Channell, 89 

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F.3d at 386-387. 

In asserting that it should be permitted to raise counterclaims against absent 

class members, Aaron’s neglects to mention that each of these absent class 

members may have substantive defenses to Aaron’s’ contract claims, such as 

damaged goods, late delivery, or other claims related to Aaron’s’ performance of 

the contract. Such claims and defenses relating to the performance of the contract 

would be much more efficiently resolved in the New Jersey courts that have 

specifically designed streamlined and cost-effective procedures in the Law 

Davison- Special Civil Part for resolving these types of disputes . 

Accordingly, pursuant to 28 U.S.C. § 1367(c), the Court should decline to 

exercise supplemental jurisdiction over any counterclaim filed by Aaron’s. 

4. Even if Relevant, Aaron’s’ Claims Against Absent Class 

Members Would Be More Properly Addressed at the 

Damages Stage After Class-Wide Liability is Determined. 

Aaron’s’ efforts to raise limitations on absent Class members’ prospective 

recovery are at best premature, and are unrelated to its liability under TCCWNA or 

the CFA. In applying for class certification, Korrow seeks the opportunity to 

demonstrate that Aaron’s violated these statutes with regard to Class members. 

Only after Aaron’s’ liability is determined could the Court address whether absent 

Class members’ rights to recover under the statutes are limited due to any 

affirmative defenses or counterclaims. See Roper, supra, 578 F.2d at 1116 (“...the 

specter of large cost will materialize only if, after a preliminary hearing, it appears 

likely that damage are actually due a large number of class members.... Only then, 

after liability is determined, will there be a substantial cost...”). 

The Court has broad authority to approve a final disposition that equitably 

addresses relief for absent class members who may owe more on the underlying 

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contract than they are eligible to recover in the class claims. See, Channell, 89 

F.3d at 386 (discussing options for disposition of claims for class members who 

owed more than they were entitled to recover). For example, class members could 

recover under TCCWNA and the CFA as an offset to prior or subsequent 

collection actions, or class members could receive cash, leaving Aaron’s to file 

independent actions for any remaining contract obligation. Ibid. Such measures 

would further the legislative purposes of the statutes underlying Korrow’s claims, 

while ensuring that Aaron’s remains free to pursue any lawful collections against 

absent Class members. Providing relief in the form of an account offset would not 

expose class members in default to any risk, and would not subject these class 

members to any counterclaims or other litigation that would not otherwise have 

been brought. All Class members would receive a benefit, in the form of either 

payment to class members not in default, or a reduction in debt for class members 

in default. Aaron’s, if it chose to do so, would remain fully capable of pursuing 

any remaining debt from defaulted class members in the small claims courts 

designed specifically for such actions. This type of relief for the class would in no 

way result in “the evasion of lawful debts.” Channell, supra, 89 F.3d at 386. 

In Roper v. Consurve, supra, the court addressed a putative class of 

approximately 90,000 credit card holders who challenged the interest rates 

imposed by the defendant. In opposing class certification, the defendant argued 

that it would face a tremendous burden in attempting to handle so many claims, 

and that it may wish to pursue counterclaims against defaulting class members. 

The court found that the situation presented “a classic case for a Rule 23 class 

action,” and, “[w]hile it may be necessary to make individual fact determinations 

with respect to charges, if that question is reached, these will depend on objective 

criteria that can be organized by a computer, perhaps with some clerical 

assistance.” 578 F.2d at 1112. The court cautioned that “the easiest way for any 

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court to handle complex class litigation is simply to deny certification; this may 

have the real effect of permitting a defendant to violate a federal statute either with 

impunity or minor expense.” Id. at 1116. 

5. Aaron’s’ Hired Expert’s Arguments Against Finding 

Superiority are Equally Baseless. 

To the extent the Court finds any of the Aaron’s Expert Report of Joel 

Steckel, Ph.D. (“Steckel Report”) (Dkt. 46-15) admissible, it should nonetheless 

reject his conclusions as baseless. Dr. Steckel theorizes that class certification of 

this action is not in the interests of Class members who owe Aaron’s more than 

$100 because it allegedly would expose them to greater counterclaims (Steckel 

Report, ¶¶ 23-34), and is not in the interests of “repeat customers” because it 

allegedly would cause them to believe that Aaron’s’ prices will increase (id. at ¶¶ 

35-43). The Court can and should reject both of these conclusions as a matter of 

law because the foregoing discussion demonstrates that Dr. Steckel’s conclusion 

about exposure to counterclaims (whose existence is not determined by this 

lawsuit) is legally erroneous, as is his notion that the legal interests of presently 

injured class members must be subordinated to the financial interests of future 

customers. Cf. Wetzel, supra, 508 F.2d at 247-48 (“The interests of Wetzel and 

Ross in combatting the sexually discriminatory policies of the Company surely are 

coextensive with all female technical employees, whether formerly or presently 

employed. We do not perceive any interests of the former employees antagonistic 

to those of the present employees.”). 

The Court also should reject Dr. Steckel’s analysis as a factual matter, as his 

report is little more than a book report based on no scientific inquiry other than a 

review of two or three other studies. Wolfe Decl., Ex. H (Deposition of Joel 

Steckel (“Steckel dep.”)) at 43:16-47:24 (no survey, no experiment, no conjoint 

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56 

analysis, no multi-dimensional scaling, no logit models, no preference testing, no 

hedonic pricing analysis; just a “content review” of Korrow’s deposition, and a 

“secondary data analysis” based on a single telephone call held after his report was 

filed). More fundamentally, Dr. Steckel relies upon assumptions that do not stand 

up to even minimal scrutiny. 

For example, when confronted with factors besides this lawsuit that may 

bear upon Aaron’s’ pricing, such as the proximity of a competitor’s stores, Dr. 

Steckel admitted that he could not assess the likelihood that Aaron’s actually 

would increase its prices because of this lawsuit. Id. at 76:1-77:22 (“No. I was 

looking at is from the perspective of consumers. I didn’t look at it from what 

Aaron’s would do.”); 77:25-82:20 (“Q. And how much would the customer, the 

Aaron’s customer think prices are going up because of this lawsuit? A. I don’t 

know.”). 

Likewise, with respect to Class members’ alleged exposure to counterclaims, 

Dr. Steckel again admitted that he cannot assess the likelihood that Aaron’s would 

try to collect on any counterclaim (id. at 176:9-180:24—“Q. So you don’t know 

what they would do, do you? A. I don’t know what they would do.”), despite 

having made the likelihood of an alleged consequence’s occurrence a centerpiece 

of his Report’s analysis. See Steckel Report, ¶ 16; see also Wolfe Decl., Ex. H 

(Steckel dep.), at 178:14-24. In short, Dr. Steckel’s Report adds nothing of value 

to the Court’s consideration of the Rule 23 class certification issues presented, and 

thus should be ignored to the extent it is not stricken. 

 

CONCLUSION 

For all of the reasons set forth herein, Plaintiff’s Cross-Motion for Class 

Certification pursuant to Fed. R. Civ. P. 23(a) and (b)(3) should be granted, and 

Defendant’s preemptive Motion to Deny Class Certification should be denied. 

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Dated: February 5, 2013 

Respectfully submitted, 

 s/ Henry P. Wolfe 

Henry P. Wolfe, Esq. 

Andrew R. Wolf, Esq. 

Henry P. Wolfe, Esq. 

Daniel I. Rubin, Esq. 

The Wolf Law Firm, LLC 

1520 U.S. Hwy 130 – Suite 101 

North Brunswick, NJ 08902 

Tel: (732) 257-0550; Fax: (732) 257-5654 

Michael J. Quirk, Esq. (pro hac vice) 

Berns Weiss LLP 

100 North 18th Street, Suite 300 

Philadelphia, PA 19103 

Tel: (267) 202-0749 

Fax: (818) 999-1500 

Christopher J. McGinn, Esq. 

Law Office of Christopher J. McGinn 

75 Raritan Avenue – Suite 220 

Highland Park, NJ 08904 

Tel: (732) 937-9400 

Fax: (800) 931-2408 

Mark R. Cuker, Esq. 

Joseph Venti, Esq. 

Williams Cuker Berezofsky, LLC 

210 Lake Drive East, Suite 101 

Cherry Hill, NJ 08002 

Tel: (856) 667-0500 

Fax: (856) 667-5133 

Attorneys for Plaintiff and the putative class

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