NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

____________________________________

:

MARGARET KORROW, on behalf of :

herself and others similarly situated, :

:

Plaintiff, : Civil Action No. 10-6317 (JAP)

:

v. :

: OPINION

AARON‟S, INC. and JOHN DOES 1-25, :

:

Defendants. :

___________________________________ :

PISANO, District Judge.

Before the Court is Defendant Aaron‟s, Inc.‟s motion to dismiss pursuant to Rule 

12(b)(6) of the Federal Rules of Civil Procedure. Plaintiff Margaret Korrow opposes the motion. 

For the following reasons, the motion to dismiss will be denied.

I. BACKGROUND

Plaintiff commenced this action by filing a Class Action Complaint and Jury Demand 

(the “Complaint”) in the Superior Court of New Jersey, Middlesex County, Law Division on 

October 26, 2010. According to the Complaint, Plaintiff entered into a rent-to-own contract with 

Defendant for a bedroom set on July 23, 2009. Plaintiff alleges that Defendant‟s rent-to-own 

contract included usurious terms, omitted necessary disclosures, and imposed extraneous fees in

violation of the New Jersey Retail Installment Sales Act (“RISA”), N.J.S.A. 17:16C-1, et seq., 

the New Jersey Consumer Fraud Act (“CFA”), N.J.S.A. 56:8-1, et seq., and the New Jersey 

Truth-in-Consumer Contract, Warranty, and Notice Act (“TCCWNA”), N.J.S.A. 56:12-15, et 

seq. Alternatively, Plaintiff restates her claims under the Uniform Commercial Code (“UCC”), 

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N.J.S.A. 12A:2A-101, et seq. Plaintiff also claims to bring her action on behalf of all persons 

who entered into a rent-to-own contract with Defendant since March 16, 2006.

Defendant received a copy of the Complaint on November 5, 2010 and removed the case 

to this Court on December 6, 2010.1 On February 1, 2011, Defendant filed the instant motion 

seeking to dismiss the Complaint. Defendant‟s primary ground for dismissal posits that Plaintiff 

is attempting to “bootstrap” claims under RISA, which provides no private right of enforcement, 

onto CFA and TCCWNA claims. Defendant also submits that the terms in the contract at issue 

do not violate RISA, are not unlawful, and did not cause any ascertainable loss.

II. STANDARD OF REVIEW

Under Federal Rule of Civil Procedure 12(b)(6), a court may grant a motion to dismiss if 

the complaint fails to state a claim upon which relief can be granted. The Supreme Court set 

forth the standard for addressing a motion to dismiss under Rule 12(b)(6) in Bell Atl. Corp. v. 

Twombly, 550 U.S. 544, 127 S. Ct. 1955 (2007). The Twombly Court stated that, “[w]hile a 

complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual 

allegations, a plaintiff‟s obligation to provide the grounds of his entitlement to relief requires 

more than labels and conclusions, and a formulaic recitation of the elements of a cause of action 

will not do.” Id. at 555 (internal citations omitted). Therefore, for a complaint to withstand a 

motion to dismiss under Rule 12(b)(6), the “[f]actual allegations must be enough to raise a right 

to relief above the speculative level, on the assumption that all the allegations in the complaint 

are true (even if doubtful in fact).” Id. (internal citations and footnote omitted).

 

1 The Court notes that Defendant‟s removal was not within thirty days as required by 28 

U.S.C. § 1446(b). Nevertheless, Plaintiff did not oppose the removal and this Court may not, sua 

sponte, remand the case. See In re FMC Corp. Packaging Sys. Div., 208 F.3d 445, 451 (3d Cir. 

2000) (“We hold that the District Court exceed[s] its authority . . . when it remand[s] . . . actions, 

sua sponte, based on . . . procedural defects in the petition for removal.”).

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More recently, the Supreme Court has emphasized that, when assessing the sufficiency of 

a civil complaint, a court must distinguish factual contentions and “[t]hreadbare recitals of the 

elements of a cause of action, supported by mere conclusory statements.” Ashcroft v. Iqbal, 129 

S. Ct. 1937, 1949 (2009). A complaint will be dismissed unless it “contain[s] sufficient factual 

matter, accepted as true, to „state a claim to relief that is plausible on its face.‟” Id. (quoting 

Twombly, 550 U.S. at 570). This “plausibility” determination will be “a context-specific task 

that requires the reviewing court to draw on its judicial experience and common sense.” Fowler 

v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009) (citations omitted).

III. DISCUSSION

Defendant claims in its motion to dismiss that RISA, the statute on which Plaintiff‟s 

claims are based, provides no private right of action and, therefore, Plaintiff‟s claims constitute a 

faulty attempt to “bootstrap” RISA claims onto other statutory claims under the CFA and 

TCCWNA, which do provide for private actions. Plaintiff responds that New Jersey state court 

decisions support her interpretation that CFA claims and TCCWNA claims may be asserted for 

underlying RISA claims. The Court agrees with Plaintiff.

RISA provides: “The penalties provided for by this act shall be sued for and recovered by 

and in the name of the commissioner and shall be collected and enforced by summary 

proceedings pursuant to the Penalty Enforcement Law (N.J.S. 2A:58-1 et seq.).”

2

 N.J.S.A. 

17:16C-56. It is apparent that the “commissioner,” or the Commissioner of Banking of New 

Jersey, see N.J.S.A. 17:16C-1, was the intended enforcer of RISA; indeed, the statute was 

enacted to “give sufficient authority to the commissioner to properly protect the interest of the 

 

2 The Penalty Enforcement Act was repealed and replaced by the Penalty Enforcement 

Law of 1999, N.J.S.A. 2A:58-10, et seq.

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buying public.” Sponsor‟s Statement to S. 59 of 1960, enacted as L.1960, c. 40 (N.J. 1960). 

Accordingly, there is no private right of action under RISA.

The CFA, however, does provide a private right of action for any unconscionable 

commercial practice or fraud in connection with the sale of any merchandise. N.J.S.A. 56:8-2, 

56:8-2.11. The statute also instructs that it should be applied in conjunction with other statutes 

or common law: “The rights, remedies and prohibitions accorded by the provisions of this act are 

hereby declared to be in addition to and cumulative of any other right, remedy or prohibition 

accorded by the common law or statutes of this State.” N.J.S.A. 56:8-2.13. The Supreme Court 

of New Jersey clearly interpreted this as allowing RISA claims to be asserted under the CFA in 

Perez v. Rent-A-Center, Inc., 186 N.J. 188, 892 A.2d 1255 (2006).

In Perez, the appellate court had thrown out the plaintiff‟s CFA claims automatically 

when it dismissed her RISA claims. See id. at 220. The Supreme Court of New Jersey rejected 

this automatic dismissal. Citing earlier precedent, the court noted that “to overcome the 

presumption that the CFA applies to a covered activity, a court must be satisfied . . . that a direct 

and unavoidable conflict exists between application of the CFA and application of the other 

regulatory scheme or schemes.” Id. at 219-20 (quoting Lemelledo v. Beneficial Mgmt. Corp. of 

Am., 150 N.J. 255, 270, 696 A.2d 546 (1997)) (omission in original). In Perez, the court found: 

“[The defendant] has not suggested, even obliquely, any conflict between the CFA and RISA, let 

alone one of a direct and unavoidable nature, nor do we perceive one.” Id. at 220.3 Accordingly, 

 

3 Defendant points to the lack of a private enforcement provision in RISA as a conflict 

with CFA that the Supreme Court of New Jersey failed to address in Perez. Def. Reply Br. at 10. 

Regardless of whether the court specifically addressed this supposed conflict, the Court is 

constrained to apply the law as interpreted by that court, and Perez clearly states that the court 

does not perceive any conflict between the statutes. Perez, 186 N.J. at 220; see also Henderson 

v. Hertz Corp., 2005 WL 4127090, *6 (N.J. Super. Ct. App. Div. 2006) (interpreting Perez as 

allowing RISA claims to be asserted under CFA while acknowledging that other statutes that 

lack private enforcement provisions may nevertheless conflict with CFA).

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when the court reinstated the RISA claims, it also reinstated the CFA claims, holding that “the 

acts must be construed in context with each other and [the defendant‟s] contention that only one 

can be applicable at a time must be rejected.” Id. Thus, it has been clearly established by the 

Supreme Court of New Jersey that RISA claims may be asserted under the CFA and Defendant‟s 

motion to dismiss on those grounds must be denied.

Even though RISA claims may be asserted under the CFA, Defendant also contends that 

Plaintiff‟s allegations fail to state a claim under the CFA. The CFA prohibits any 

unconscionable commercial practice or fraud in connection with the sale of any merchandise. 

N.J.S.A. 56:8-2. “To state a CFA claim, a plaintiff must . . . allege three elements: (1) unlawful 

conduct; (2) an ascertainable loss; and (3) a causal relationship between the defendants' unlawful 

conduct and the plaintiff‟s ascertainable loss.” Kleinman v. Merck & Co., Inc., 8 A.3d 851, 860 

(N.J. Super. Ct. Law Div., 2009) (quoting N.J. Citizen Action v. Schering-Plough Corp., 842 

A.2d 174 (N.J. Super Ct. App. Div. 2003), certif. denied., 178 N.J. 249, 837 A.2d 1092 (2003)) 

(internal punctuation omitted). For each alleged deficiency in Defendant‟s contract, Plaintiff has 

pled a violation of RISA, or “unlawful conduct.” Plaintiff has also pled that she paid monies that 

included the allegedly unlawful interest and allegedly unlawful charges and fees. See Compl. 

¶¶48-50. In addition, the Supreme Court of New Jersey has held that a contract that unlawfully 

imposes a debt upon a consumer necessarily constitutes a loss under the CFA, Cox v. Sears 

Roebuck & Co., 138 N.J. 2, 22, 647 A.2d 454, 464 (1994), and Plaintiff has pled such unlawful 

contract practices in this case. Finally, Plaintiff has pled that the alleged RISA violations caused 

her ascertainable losses. As such, without addressing the merits of Plaintiff‟s RISA claims 

themselves, Plaintiff has sufficiently pled her case under the CFA to survive the motion to 

dismiss at this early stage in the proceedings.

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TCCWNA also provides a private right of action, against any party that offers or enters 

into a written contract that contains “any provision that violates any clearly established legal 

right of a consumer or responsibility of a seller, lessor, creditor, lender or bailee as established by 

State or Federal law . . . .” N.J.S.A. 56:12-15, 56:12-17. It contains a near identical provision to 

the CFA instructing that it should be applied in conjunction with other statutes or common law. 

Compare N.J.S.A. 56:12-18 (TCCWNA) with N.J.S.A. 56:8-2.13 (CFA). In United Consumer 

Financial Services v. Carbo, 982 A.2d 7 (N.J. Super. Ct. App. Div. 2009), the Superior Court of 

New Jersey, Appellate Division, the highest state court to address directly a RISA claim 

submitted under the TCCWNA, found that a defendant‟s violation of RISA subjected them to 

liability under the TCCWNA.

In Carbo, the defendant entered into a retail installment contract which charged a $20 fee 

if a check was “dishonored for any reason.” Id. at 21. The court found that this conflicted with 

RISA‟s allowing a return check fee of $20 only if the check was dishonored for insufficient 

funds. Id. at 22. The court then held that this violation of RISA amounted to the violation of a 

“clearly established right” and recognized the defendant as liable under TCCWNA. The court 

elaborated that “[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 23 

(internal quotation marks omitted). Therefore, by alleging RISA violations under TCCWNA, 

Plaintiff has stated a claim that survives the motion to dismiss.

IV. CONCLUSION

It has been clearly established in the state courts of New Jersey that RISA claims may be 

asserted under the CFA and TCCWNA. Accordingly, Defendant‟s motion to dismiss on those 

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grounds must be denied. In addition, Plaintiff‟s Complaint adequately states claims under the 

CFA to survive the motion to dismiss. The motion to dismiss is therefore denied. An 

appropriate order will issue.

/s/ JOEL A. PISANO 

United States District Judge

Dated: August 25, 2011 

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