Christine Seney v. Rent-a-Center, Inc.
738 F.3d 631
4th Cir.2013Background
- Seneys entered into a Rental-Purchase Agreement with Rent-A-Center for a bed and mattress, with a two-week rental term and options to renew or purchase; RAC retained title until purchase or six-month renewal; RAC provided its own service warranty within the lease and a binding arbitration clause for contract disputes; bedbug infestation began after delivery and escalated despite partial remediation; Seneys sued in Maryland state court alleging breach of warranty under the Magnuson-Moss Warranty Act (MMWA), removed to federal court, and arbitration was compelled; FTC regulations interpreting the MMWA limit binding arbitration in written warranties but do not clearly apply to leases or rental agreements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FTC regs ban binding arbitration in MMWA warranties apply to a lease | Seneys argue pre-dispute binding arbitration is banned | RAC contends FTC ban does not apply to leases; regulations cover written warranties | FTC ban does not apply to RAC lease warranty |
| Whether the Seneys’ contract with RAC fell within the FTC definition of a written warranty | Seneys rely on written warranty via RAC’s service warranty | Contract lacks sale; not a written warranty under FTC rule | Contract not a written warranty; FTC ban inapplicable |
| Whether the arbitration clause should be enforced given the above regulatory interpretation | Regulatory ban prohibits binding arbitration as part of warranty | Arbitration clause enforceable because no written warranty under FTC rule | Binding arbitration clause enforceable; district court affirmed |
Key Cases Cited
- Davis v. So. Energy Homes, Inc., 305 F.3d 1268 (11th Cir. 2002) (pre-dispute ban; arbitration rules under MMWA regulations)
- Walton v. Rose Mobile Homes, LLC, 298 F.3d 470 (5th Cir. 2002) (post-dispute arbitration, regulatory interpretation context)
- Shearson/American Express, Inc. v. McMahon, 482 U.S. 220 (1987) (federal arbitration policy; presumption of arbitrability when statute silent)
- Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90 (1991) (court may consider antecedent issues dispositive of the dispute)
- Peabody Holding Co. v. United Mine Workers of Am., Int'l Union, 665 F.3d 96 (4th Cir. 2012) (standard for review of arbitration-compel orders)