Court Opinion

ID: 3017470
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:17:21.301984+00
Date Added: 2024-06-11T11:47:05.248161
License: Public Domain

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                                        No. 95-3694
                                      ---------------

Vickie Fogie, Joan Leonard, and           *
Angela Adams, on behalf of themselves     *
and all others similarly situated,                              *
                                     *
           Plaintiffs/Appellees,          *
                                     *
v.                                   * Appeal                  from     the    United     States
District Court
                                     * for the                 District of Minnesota.
THORN Americas, Inc. (formerly known      *
as Rent-A-Center, Inc.) a Kansas                                *
corporation, and THORN EMI North     *
America Holdings, Inc., a Delaware        *
Corporation,                              *
                                     *
           Defendants/Appellants.         *

                                     ---------------
                                Submitted: April 8, 1996

                                    Filed: September 6, 1996
                             ---------------
Before McMILLIAN and FAGG, Circuit Judges and BURNS*, District Judge.
                             ---------------

BURNS, Senior District Judge.
       Appellants THORN Americas, Inc. and THORN EMI North America Holdings,
Inc. appeal the district court*s1 order granting summary judgment for the
plaintiff class and permanently enjoining appellants from entering into
usurious     “rent-to-own”       consumer      credit     sales     contracts.          We   have
jurisdiction pursuant to 28 U.S.C. § 1292(a)(1).                    We affirm.

        The Honorable Michael J. Davis, United States District Judge for the District of Minnesota.
        1

      *The Honorable James M. Burns, Senior United States District Judge for the District of
Oregon, sitting by designation.
I.       BACKGROUND
          Appellant THORN Americas, Inc. operates a chain of stores that offer
a variety of        household goods for sale or lease.            Appellant THORN EMI North
America Holdings, Inc. owns all of the stock of THORN Americas, Inc.
Appellants operate their stores under the business name “Rent-A-Center” and
are collectively called “RAC” in this opinion.                    Appellees are individual
members of a certified class who entered into rent-to-own transactions with
RAC on or after August 1, 1990.
          RAC leases household goods to its customers for a weekly or monthly
rental term.          At the end of the initial weekly or monthly rental period,
the customer may renew the agreement for another term.                       The lease may be
renewed at the end of each rental term.               Full payment of the rental fee is
required at the beginning of each term.
          RAC uses a standard form contract for each renewable lease agreement.
RAC entered into thousands of such contracts with members of the plaintiff
class.         The renewable lease agreements between RAC and the members of the
plaintiff         class   are   known    interchangeably        as   “the    rental     purchase
contracts” or “the rent-to-own contracts”.
          The standard rental purchase contract allows a class member to
acquire ownership of an item by renewing the lease for a specified number
of consecutive rental periods.            In the standard form contract, this method
of acquiring title is called “renewing the agreement to ownership”.                          Items
                                                                               2
may also be purchased for cash on an immediate sale basis.                         However, the
vast majority, if not all of RAC’s business is conducted through rental
purchase contracts.
          The cash price of an item is set at 55% of the total payments
necessary to purchase the item by renewing the agreement to ownership.                         The
cash price of an item is prominently displayed on the item and is included
in the standard form rental purchase contract.                 The difference between the
total payments needed for renewal to ownership and the cash price is called
the “cost of lease services”.3              The rental purchase contracts state the
cost of lease services amount.

         The plaintiff class did not assert any claim against appellants based on immediate sales of
           2

goods for cash.

    We use the definition of “cost of lease services” employed in RAC’s form contracts rather than
     3

the definition employed by the district court.
        Appellees have successfully contended that the difference between the
cash price and the total of payments to acquire title by renewing the
agreement to ownership, i.e. the amount known as the cost of lease
services, is actually entirely interest.      Based on that central contention,
the class members brought this action alleging that the rent-to-own
contracts violated several state and federal statutes, including the
Minnesota Consumer Credit Sales Act (CCSA), Minn. Stat. §§ 325G.15-.16, the
Minnesota General Usury Statute, Minn. Stat. §§ 334.01-.03; and the federal
Racketeer Influenced and Corrupt Organization statute (RICO), 18 U.S.C. §
1961.
        The district court certified two questions to the Minnesota Supreme
Court:
              1.    Are   rent-to-own   contracts   consumer
              credit sales under Minn. Stat. § 325G.15?
              2.   Does the usury statute, Minn. Stat. §
              334.01, apply to rent-to-own contracts?
        On June 24, 1994, the Minnesota Supreme Court issued its opinions in
Miller v. Colortyme, Inc., 518 N.W.2d 544 (Minn. 1994) and      Fogie v. Rent-
A-Center, Inc., 518 N.W.2d 544 (Minn. 1994).          The Court answered both
certified questions in the affirmative.
        The plaintiff class then brought its motion for partial summary
judgment seeking declaratory and injunctive relief.       On September 28, 1995,
the district court issued its order enjoining appellants from entering into
credit sales transactions within the State of Minnesota which bear interest
in excess of the maximum rate permitted under Minnesota law.       The district
court*s order also declared the rental purchase contracts to be consumer
credit sales contracts subject to the Minnesota General Usury Statute.       It
declared that the rental purchase contracts constitute “unlawful debt” as
defined under RICO.        Finally, the district court declared the rental
purchase contracts void ab initio and set forth a formula and procedure for
determining money damages.
II.   Scope of Review
        We must resolve issues relating to the jurisdiction of this court at
the outset.    We have jurisdiction to review the district court*s issuance

                                         3
of the injunction under 28 U.S.C. §

                                      4
1292(a)(1) which provides for appeal of interlocutory orders granting or
refusing to grant injunctions.       Our jurisdiction under section 1292(a)(1)
also extends to the remainder of the appealed order to the extent the
injunction is “interdependent with” the remainder of the appealed order.
In re Federal Skywalk Cases, 680 F.2d 1175, 1180 (8th Cir.), cert. denied,
459 U.S. 988 (1982); Union Nat. Bank of Little Rock v. Federal Nat. Mortg.
Ass’n, 860 F.2d 847, 852 (8th Cir. 1988).                 Under this standard, we have
jurisdiction to review all portions of the order that are dependent on the
resolution of the issues necessarily resolved in reviewing the injunction
order.   Union Nat. Bank v. Federal Nat. Mortg. Ass’n, 860 F.2d at 852.                 In
other words, in addition to the injunction order, we may review other
issues only if they are “inextricably bound up” with the injunction.
Marathon Oil Co. v. United States, 807 F.2d 759, 764 (9th Cir. 1986), cert.
denied, 480 U.S. 940 (1987).         We need not undertake a review of issues
whose resolution is not necessary to effectively review the injunction.
Mille Lacs Band of Chippewa Indians v. State of Minn., 48 F.3d 373, 375
(8th Cir. 1995).
     We must determine the extent to which each issue RAC has appealed is
relevant to, or interdependent with, or inextricably bound up with the
injunctive relief granted in this case.
     First,   the   propriety   of    the       summary    judgment   in   favor   of   the
plaintiff class on its usury claim is properly before us on appeal, because
the district court’s determination that the rental purchase agreements are
usurious   is the very basis of the injunction.                   Second, the issues
surrounding the time-price doctrine and appellants’ constitutional claims
are properly before us because the district court’s rejection of these
defenses was a necessary predicate to entry of the injunction.
     The remaining issues are more problematic.              RAC asks us to review the
district court’s finding that the rental purchase agreements satisfy the
“unlawful debt” element of RICO.      The district court retained jurisdiction
to make determinations on the remaining elements of the RICO claim.                In the
interest of avoiding piecemeal appeals, it would be appropriate to review
the RICO claim in its entirety after a final judgment has been rendered.
 Gardner v. Westinghouse Broadcasting Co., 437 U.S. 478, 480, 98 S. Ct.
5
2451, 2453 (1978).   Furthermore, it is not necessary to determine whether
the rental purchase contracts satisfy the “unlawful debt” element

                                     6
of the RICO claim in order to effectively review the injunction order.
Accordingly, we decline to exercise jurisdiction to review this ruling.
Mille Lacs Band, 48 F.3d at 375; Union Nat. Bank v. Federal Nat. Mortg.
Ass’n, 860 F.2d at 852; Marathon Oil Co. v. United States, 807 F.2d at 764.
       For the same reasons, we decline to review the district court’s order
establishing the formula for calculating money damages and the procedure
by which class members are to assert claims for money damages.                          The
district court retained jurisdiction to determine damages in this case.
It is appropriate to avoid piecemeal appeals by deferring review of these
issues   until    final     money    judgments     have   been   entered.     Gardner   v.
Westinghouse Broadcasting Co., 437 U.S. at 480, 98 S.Ct. at 2453.                        In
addition, we do not find it necessary to resolve these issues in order to
effectively review the injunctive relief granted here.                   Issues regarding
the proper method for calculating damages are not                 inextricably bound up
with the injunction issued here.             Mille Lacs Band, 48 F.3d at 375; Union
Nat. Bank v. Federal Nat. Mortg. Ass’n, 860 F.2d at 852; Marathon Oil Co.
v. United States, 807 F.2d at 764.
III.   Standards of Review
       We review a grant of summary judgment de novo.                  Hardin v. Hussmann
Corp., 45 F.3d 262, 264 (8th Cir. 1995).             We will affirm if the evidence,
when   viewed    in   the    light    most   favorable     to    the   non-moving    party,
demonstrates that there is no genuine issue as to any material fact and the
moving party is entitled to judgment as a matter of law.                 Id.; Bashara v.
Black Hills Corp., 26 F.3d 820, 823 (8th Cir. 1994).
       Our review of the grant or denial of a permanent injunction is
confined to the determination of whether the district court abused its
discretion.     International Ass*n of Machinists and Aerospace Workers v. Soo
Line R. Co., 850 F.2d 368, 374 (8th Cir. 1988) (en banc), cert. denied, 489
U.S. 1010, 109 S. Ct. 1118 (1989).                 Abuse of discretion occurs if the
district   court      reaches   its    conclusion     by    applying     erroneous    legal
principles or relying on clearly erroneous factual findings.                Id., 850 F.2d
at 374; United States v. Yacoubian, 24 F.3d 1, 3 (9th Cir. 1995).

                                              7
IV.   Discussion
      A.   Summary Judgment on Usury Claim
      The district court held that RAC’s rent to own contracts are usurious
as a matter of law.    Under the state general usury statute, four elements
must be proven to establish a violation: 1) a loan of money or forbearance
of debt; 2) an agreement between the parties that the principal shall be
repayable absolutely; 3) the exaction of a greater amount of interest than
is allowed by law, and 4) the presence of an intention to evade the law at
the inception of the transaction.      Miller v. Colortyme, 518 N.W.2d 544,
549-50 (Minn. 1994); Citizen’s National Bank of Willmar v. Taylor, 368 N.W.
2d 913, 918 (Minn. 1985).
      1.   Constitutional Challenges
      The district court held that, under Minnesota law as set forth in
Miller v. Colortyme and Fogie v. Rent-A-Center, the first two elements of
usury are satisfied by operation of the CCSA and the general usury statute.
518 N.W.2d at 549; 518 N.W.2d 544.    RAC argues that, by applying the CCSA
and the usury statute to it’s rental purchase transactions in this manner,
the district court violated RAC’s constitutional rights.
      First, RAC contends the Miller interpretation renders the CCSA and
the usury statute unconstitutionally vague, depriving RAC of the “fair
notice” required by the Due Process Clause.      RAC also contends that the
district court retroactively applied the Miller decision in violation of
the Ex Post Facto and Due Process Clauses.     We reject both contentions.
      a.   Vagueness
      The Supreme Court enunciated standards for evaluating claims of
vagueness in Grayned v. City of Rockford, 408 U.S. 104, 108-109, 92 S. Ct.
2294, 2298-99 (1972).    First, the prohibitions of a statute must be defined
clearly enough that a person of ordinary intelligence has a reasonable
opportunity to know what is prohibited.     Second, the statute must provide
standards that are clear enough that those charged with applying the
statute are not required to make basic policy decisions on a subjective or
arbitrary basis.   Id.
      These standards are not to be applied mechanically.           Criminal
enactments are to be examined under a stricter vagueness test while

                                       8
economic regulation is subject to a more tolerant

                                   9
examination.      Village of Hoffman Estates v. Flipside, Hoffman Estates,
Inc., 455 U.S. 489, 498-99, 102 S. Ct. 1186, 1193 (1982).            We reject RAC’s
contention that the strict test applicable to criminal statutes governs
here.     The statutes implicated in this case are primarily economic
regulations which cover a narrow subject area and regulate the conduct of
business enterprises.      The punitive aspects of the usury statute impose
only civil penalties.       Under Village of Hoffman, we conclude that the
broader, more tolerant test of vagueness is required here. 455 U.S. at
498-99, 102 S.Ct. at 1193.
        Applying these standards, we hold that the Miller decision of the
Minnesota Supreme Court         does not render the CCSA or the general usury
statute unconstitutionally vague.         The CCSA defines “Sale of Goods” in
terms that clearly encompass terminable leases including RAC’s rental
purchase agreements.     Minn. Stat. 325G.15 subd. 5.         The CCSA incorporates
this definition of “Sale of Goods” into its definition of “Consumer Credit
Sales”.       Minn. Stat. 325G.15 subd. 2.         Any lease that constitutes a
consumer credit sale under the CCSA is deemed a sale for all purposes.
Minn. Stat. 325G.16 subd. 4.
        RAC   contends   that    their   rental    purchase    agreements,   though
statutorily defined as “sales”, cannot be “consumer credit sales” because
the seller does not extend credit and the buyer does not incur debt.           This
construction is untenable because it would render section 325G.15 subd. 5
entirely meaningless and unnecessary.         Moreover, the terms of RAC’s rental
purchase agreements provide for buyers to acquire possession of goods while
deferring payment over time.        These are the     essential attributes of an
ordinary credit sale. It is clear that the legislature intended for CCSA
consumer protections governing ordinary credit sales to also govern rental
purchase agreements having the same essential attributes.          Accordingly, the
construction proposed by RAC would render subdivision 5 meaningless and
would also frustrate the legislative intent and hinder the consumer
protection objectives of the statute.
        These statutory provisions give sufficient notice to those engaged
in the rent-to-own industry that their rental purchase contracts fall
within the CCSA and are subject to usury laws.        They also provide standards

                                         10
by which the courts can apply the statutes without engaging in subjective
or arbitrary policy making decisions.   Accordingly, the statutes pass the
vagueness

                                   11
test enunciated in Grayed v. City of Rockford and Village of Hoffman
Estates.
       b.    Retroactive Application of Miller v. Colortyme
       Two elements are necessary for a statute to be ex post facto in
violation of the Constitution4:                it must apply to events that occurred
before its enactment; and it must disadvantage the offender affected by it.
Miller v. Florida, 482 U.S. 423, 430, 107 S. Ct. 2446, 2451 (1987); Weaver
v. Graham, 450 U.S. 24, 29, 101 S. Ct. 960, 964 (1981).                      The CCSA, the RPAA,
and the general usury statute existed in their present form when the
parties entered into the rental purchase contracts at issue in this case.
Accordingly, the statutes themselves are not subject to ex post facto
analysis.
       A judicial decision which meets both elements also violates the ex
post facto clause and cannot be applied retroactively.                         Bouie v. City of
Columbia, 378 U.S. 347, 353-54; 84 S. Ct. 1697, 1702-1703 (1964).                                  This
occurs when a judicial decision unforeseeably enlarges a statute to cover
conduct that was not offensive before the judicial pronouncement.                           Id.    If
the judicial construction is “unexpected and indefensible by reference to
the law which had been expressed prior to the conduct in issue” it violates
the ex post facto clause and must not be given retroactive effect.                            Bouie
v. City of Columbia, 378 U.S. at 354, 84 S.Ct. at 1703.
       RAC contends the Minnesota Supreme Court’s decision in Miller v.
Colortyme changed the substantive elements of a usury claim by making it
unnecessary for plaintiffs to prove the first two elements, the extension
of credit and the absolute obligation to repay it.                         In RAC’s view, the
Miller decision acts as an ex post facto law and must not be applied
retroactively.
       The Miller decision did not change the elements of a usury claim.
It is a judicial interpretation of the statutory scheme that existed long
before the present contracts were made.                      The judicial construction in
Miller is not “unexpected or indefensible by reference to” the statutory

  4
   We assume without deciding that the third critical element, that the statute be a criminal or penal
law, is satisfied in this case.

                                                 12
framework already in place.   On the contrary, the judicial construction of
those statutes is reasonable and foreseeable, gives full meaning to the
statutory language, operates in the

                                      13
manner clearly intended by the legislature, and furthers the consumer
protection objectives of the statutes.                     In addition, Miller does not
overrule any prior contrary ruling of the Minnesota Supreme Court upon
which RAC might justifiably have relied.
       In short, Miller did not change existing law- it simply stated a
reasonable and correct interpretation of the law which differs from the
erroneous view RAC had chosen to follow.
       For the reasons stated above, RAC’s constitutional challenges to the
Miller v. Colortyme decision must be rejected.                       The district court was
correct in ruling in accordance with Miller, that the first two elements
of the usury claim in this case are established by operation of the CCSA
and the usury statute.
       2.    Factual Challenges
       RAC contends the plaintiff class failed to carry its burden of
proving the third and fourth elements of their usury claim: exaction of
interest at an illegal rate and the intent to evade the usury law when the
contract was made.           We view the evidence in the light most favorable to
RAC.    Bashara v. Black Hills Corp., 26 F.3d at 823.
       a.    Amount of Interest Charged
       The plaintiff class urged the district court to find that the
difference between the total payments needed to purchase an item by
renewing the contract to ownership and the cash price was entirely
interest.     It cannot be disputed that this amount, described in the rental
purchase agreements as the “cost of lease services”, is 82% of the cash
price in each contract.             Adjusting this figure for the duration of the
various contracts among the plaintiff class members produces annual
percentage rates ranging between 46% for the longest contract and 746% for
the shortest.       Obviously, these rates far exceed the legal limit under the
usury statute,        Minn. Stat. § 334.01.5
       RAC contends that the cost of lease services cannot be entirely

  5
   The general usury statute permits a maximum interest rate of six percent per annum unless the rate
is contracted for in writing, in which case a rate of eight percent may be charged. Minn. Stat. §
334.01.

                                                 14
interest because it includes the value of services such as delivery,
maintenance, repair, and contract options.   If the case had gone to trial,
RAC intended to present evidence to show the value of these additional

                                    15
services.
        The   district      court     found     no   evidence      that    the    members      of   the
plaintiff class agreed to pay for any additional services.                          The court also
found that, even if the “cost of lease services” figure included both
interest and the value of additional services, no reasonable fact finder
could conclude that the portion attributable to the value of additional
services was great enough so that the interest portion was below the
statutory usury rate.             A close review of the record discloses that the
district court was correct in both findings.
        It is proper to exclude from the interest calculation “a certain sum,
agreed to be paid the lender for services and expenses in connection with
the loan” if the charge is reasonable and bona fide.                          Hobart v. Michaud,
219 N.W. 878, 879 (Minn. 1928); Daley v. Minnesota Loan and Inv. Co., 45
N.W. 1100, 1101 (Minn. 1890).                However, if the fee is not related to any
separate expenses but is compensation for the use of the money loaned, it
must be considered interest.               Vanderweyst v. First State Bank of Benson,
425 N.W.2d 803, 811 (Minn.), cert. denied, 488 U.S. 943 (1988).
        RAC contends the plaintiff class members agreed to pay the value of
additional services because they each agreed to the general “cost of lease
services” term in the written contracts.                      RAC’s expert claimed that the
value of each of the following services should be excluded from the
interest calculation: delivery, maintenance, repair and replacement.                                RAC
contends it is not required to itemize the additional services covered by
the term “cost of lease services”.6
        The undisputed evidence shows that the parties contemplated each of
the services identified by RAC’s expert would be provided without charge.
In the express written terms of each of the contracts, the delivery charge
indicated is “$0.00".           In its published advertisements, RAC announced that
delivery, repair, service, set up, and “loaners” were free services.                                 We

   6
     We believe the RPAA requires full disclosure of the service charges associated with a rental
purchase contract. Minn. Stat. § 325F.86-.87. However, compliance with the RPAA is not the issue.
Itemization of charges is relevant to the usury analysis only if it tends to prove or disprove that “cost
of lease services” is truly a service charge rather than interest.

                                                   16
are convinced that no fact finder could view this evidence and reasonably
conclude that the plaintiff

                                   17
class members knowingly agreed to pay for these services as “cost of lease
services”.
     RAC’s expert also identified certain “contract options” including the
right to continue renting; the right to stop renting; and, the right to
obtain ownership over time by the two methods described in the contracts.
RAC contends the value of these “options” should be excluded from “cost of
lease services” in calculating the interest charged by RAC.
     The     Minnesota   Supreme    Court,      after    fully   considering   the    very
contracts at issue here, including the rights described now by RAC as
“options”, ruled that these contracts are consumer credit sales contracts.
Fogie v. Rent-A-Center, 518 N.W.2d at 544.                Describing the contract’s
terms as “options” does not change its nature.              These so-called “options”
are simply the rights enjoyed by any consumer credit sale purchaser.                   The
compensation paid for the right to acquire ownership by paying the purchase
price over time in a consumer credit sale is interest.                     Likewise, the
compensation      collected   by   the   seller    for    the    risks   associated   with
collecting the purchase price over time is interest.                 Simply calling the
rights and risks associated with credit sales “options” does not entitle
the seller to additional compensation in excess of the usury rate.
     Accordingly, by process of elimination, we must conclude that the
“cost of lease services” term in the rental purchase contracts is interest.
To the extent the value of any additional service or option is included,
we agree with the district court that no fact finder could reasonably
conclude such value is sufficient to reduce the 46% to 746% range of annual
percentage rates charged by RAC to a nonusurious level.
     The district court properly found              that the third element of the
usury claim has been established.
             b.    Intent
     RAC contends that summary judgment is improer because the plaintiff
class failed to prove the fourth element, intent to evade the usury law.
“Intent” for the purposes of usury law consists in the intent to take more
interest than allowed by law; it is not necessary that the person taking
the interest knows he is violating the usury law.                  Trapp v. Hancuh, 530
N.W.2d 879, 885 (Minn. 1995); Citizen’s Nat. Bank of Willmar v. Taylor,

                                           18
368 N.W.2d 913, 919 (Minn. 1985).   If the evidence shows a direct contract
whereby the lender exacts excessive

                                      19
interest, the intent to evade the law is presumed.     Fred G. Clark Co. v.
E.C. Warner Co., 247 N.W.225, 239 (Minn. 1933).
     In this case the contracts provide for RAC to exact interest in
excess of the usury rate and there is no claim by RAC that it did not
intend to collect less money than is stated in the contracts.    Accordingly,
as a matter of law, RAC had the requisite intent under the usury statute.
Miller v. Colortyme, 518 N.W.2d at 550.
     RAC contends that it should be relieved of the presumption of intent
because it reasonably relied in good faith on the existing law.   Washington
Federal Sav. & Loan Ass’n of Stillwater v. Baker, 374 N.W.2d 786, 788
(Minn. App. 1985).     We reject this argument for the same reasons we
rejected RAC’s constitutional challenges.   RAC’s reliance on a strained and
erroneous construction of the statutory scheme is not the kind of good
faith reliance that brings this exception into play.
     3.    Time-Price Doctrine
     RAC contends that the plaintiff class is not entitled to judgment as
a matter of law because their rental purchase contracts fall within the
time-price doctrine.   This doctrine was based on the central premise that
there can be no usury without a loan or forbearance of money and that the
sale of property in a time-price transaction involves no loan.       Dunn v.
Midland Loan Finance Corporation, 289 N.W. 411, 413 (Minn. 1939); St. Paul
Bank for Cooperatives v. Ohman, 402 N.W.2d 235, 238 (Minn. 1987).        The
time-price doctrine was judicially created and is not an exception to usury
law, but recognizes transactions which are outside the scope of usury law.
St. Paul Bank v. Ohman, 402 N.W.2d at 238.
     RAC’s argument is foreclosed by the rulings of the Minnesota Supreme
Court.    In Fogie v. Rent-A-Center, Inc., the Court ruled in no uncertain
terms that the usury statute, Minn. Stat. § 334.01 applies to rent-to-own
contracts. 518 N.W.2d at 544.   Accordingly, RAC cannot now argue that its
rental purchase agreements are transactions which fall outside the scope
of the usury law.   Furthermore, the loan or forbearance element of usury,
missing in time-price transactions, is satisfied in rental purchase
agreements by operation of statute.   Miller v. Colortyme, Inc., 518 N.W.2d
at 549.      In addition, the Minnesota Supreme Court has been

                                      20
unwilling to expand the time-price doctrine unless justified by economic
needs and social attitudes making the protections of the usury statute
unnecessary.       Rathbun v. W.T. Grant Company, 219 N.W.2d 641, 647 (Minn.
1974).    We find no such justification here.
     “We are bound to apply state law as we are able to discern it from
the rulings of the state’s courts.”        Boner v. Eminence R-1 School Dist. 55
F.3d 1339, 1341 (8th Cir. 1995), quoting Jackson v. Anchor Packing Co., 994
F.2d 1295, 1310 (8th Cir. 1993).        Under the applicable state case law, it
is clear that RAC’s rental purchase contracts do not fall within the time-
price doctrine and are subject to the usury statute.
     B.     Injunction Order
     We review the district court’s grant of a permanent injunction for
an abuse of discretion.         United States v. Green Acres Enterprises, Inc.,
86 F.3d 130, 132 (8th Cir. 1996); Soo Line R. Co., 850 F.2d at 374.            Abuse
of discretion occurs if the district court reaches its conclusion by
applying erroneous legal principles or relying on clearly erroneous factual
findings.    Id.
     The    Eigth     Circuit   balances   four   factors   to   determine   whether
injunctive relief is warranted:       (1) the threat of irreparable harm to the
movant; (2) the state of balance between this harm and the harm to be
suffered by the nonmoving party if the injunction is granted; (3) the
probability that the movant will succeed on the merits; and (4) the public
interest.    Dataphase Systems, Inc. v. C L Systems, Inc., 640 F.2d 109, 113
(8th Cir. 1981)(en banc).           The standard is the same for a permanent
injunction except that the movant must show actual success on the merits.
Amoco Production Co. v. Village of Gambell, Alaska, 480 U.S. 531, 546 n.12
(1987).    The district court did not make explicit findings with respect to
these four factors.        However, by prevailing on its usury claim             the
plaintiff class has demonstrated that the four factors of this test
overwhelmingly militate in favor of an injunction.
     As demonstrated in this opinion, the plaintiff class has shown actual
success on the merits.     In addition, public interest overwhelmingly favors
enjoining these contracts.        The public policy of Minnesota is revealed in
its consumer protection statutory scheme including the usury statute, the

                                           21
CCSA and the RPAA.   The actions enjoined here violate the letter and spirit
of this statutory scheme and are clearly against the public interest.    To
balance against this, the only

                                     22
harm to RAC is the loss of the usurious portion of its income.
      RAC contends that the plaintiff class has failed to show irreparable
injury because the district court has established a formula for calculating
money damages.    However, this formula only compensates for past damages and
only reaches class members who have been identified.       Estimating future
losses of similarly situated individuals if RAC continues its practices is
virtually impossible, as is identifying those potential victims of their
practices.   Giving due weight to each of the four factors, we are satisfied
that there has been no abuse of discretion by the district court.
V.   Conclusion
      Based on the foregoing, the district court’s order granting summary
judgment for the plaintiff class and enjoining RAC from entering into
usurious credit sales transactions is AFFIRMED.

A true copy.

      Attest:

             CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

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