                         Ohunene O. Lawal GLINTON, et al., Plaintiffs-Appellants,

                                                        v.

                     AND R, INC., a Georgia Corporation, et al., Defendants-Appellees.

        Michael Darby, and those persons similarly situated with Mr. Darby, Plaintiff-Appellant,

                                                        v.

 Cobb Center Pawn and Jewelry Brokers, Inc., a Georgia corporation, N.Y. Diamond Corporation, et al.,
Defendants-Appellees.

              Susan Walker, and all persons similarly situated with Walker, Plaintiff-Appellant,

                                                        v.

                       Mike Horton; Cash Express, Inc., et al., Defendants-Appellees.

                                     Nos. 98-8405, 98-8406 and 98-8872.

                                       United States Court of Appeals,

                                                Eleventh Circuit.

                                                 April 29, 1999.

Appeals from the United States District Court for the Northern District of Georgia. (Nos. 1:97-CV-3012-
TWT, 1:97-3013-CV-TWT and 1:97-CV-3015-TWT), Thomas W. Thrash, Judge.

Before HULL and MARCUS, Circuit Judges, and RONEY, Senior Circuit Judge.

        PER CURIAM:

        CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH
        CIRCUIT TO THE SUPREME COURT OF GEORGIA PURSUANT TO O.C.G.A. § 15-2-9 (1994).

        TO THE SUPREME COURT OF GEORGIA AND ITS HONORABLE JUSTICES:

        This case involves an unanswered question of Georgia law that is determinative of this appeal. We

therefore certify questions for resolution by the Georgia Supreme Court.

        In this consolidated action, three plaintiffs appeal the dismissal of their suits alleging that transactions

they entered with pawnbrokers violated Georgia's criminal usury statute, O.C.G.A. § 7-4-18, and the

Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962 et seq. The facts are

undisputed.
                                          1. Plaintiff Susan Walker

        Between December 1996 and July 1997, Walker received cash in a series of title pawn transactions

with Cash Express of Newnan, Inc. in exchange for pledging to Cash Express the title to her 1985 Cadillac

Eldorado. The rate of interest on the title loans was 20% per month. Walker alleges she has paid

approximately $1,700.00 in interest on approximately $1,100.00 in principal received since January 1997.

Cash Express maintains that as of July 13, 1997, Walker was indebted in the amount of $675.00 and is

accruing interest charges at a rate of 216% per annum.

                                          2. Plaintiff Michael Darby

        In December 1996, defendant Cobb Center Pawn loaned $750.00 to Darby. To secure the loan, Cobb

Center took possession of the title to Darby's truck which was valued at approximately $8,000.00. In May

of 1997, Cobb Center again loaned money to the plaintiff and used the same vehicle title as collateral. The

total of interest and charges on both loans was 25 percent per month or 300 percent annually. While the

plaintiff paid off the initial loan in a timely fashion, he defaulted on the second loan, and Cobb Center took

possession of the truck pursuant to their agreement.

                                        3. Plaintiff Ohunene Glinton

        Glinton alleged that on or about June 17, 1997, And R, Inc., d/b/a Atlanta Title Loans loaned her

$2,000.00 at an interest rate charge of 25% per month. In her amended complaint, Glinton added another

plaintiff, Phyllis Guthrie, who asserts that she engaged in an identical loan transaction with another pawnshop

known as Instant Cash Loans, Inc., d/b/a Atlanta Title Loans, which loaned Guthrie $4,000 in exchange for

title to her Mercury Cougar as collateral. The plaintiffs alleged that Guthrie was also charged an interest rate

charge of 25 percent per month or 300 percent annually.

        Plaintiffs filed complaints against numerous pawn shop entities, their owners and operators as well

as other defendants including the Pawn Brokers Association of Georgia alleging the transactions violated

Georgia's criminal usury statute, O.C.G.A. § 7-4-18(a), and the Racketeer Influenced and Corrupt



                                                       2
Organizations Act (RICO), 18 U.S.C. § 1962(b).1 Plaintiffs contended that defendants' conduct violated §

1962(b) in that they knowingly collected unlawful debts with interest rates in excess of the rates allowed by

the Georgia usury statute. Plaintiffs asserted that defendants conspired in violation of 18 U.S.C. § 1962(d)

in the unlawful collection of those debts, and sought treble damages in accordance with 18 U.S.C. § 1964 as

well as a return of an amount equal to the difference between the value of the vehicle or money taken by the

defendants and the principal amount of the loan. Plaintiffs also sought class certification.

         Defendants moved to dismiss the complaints contending that the transactions complied with Georgia's

pawnbroker statute, O.C.G.A. § 44-12-130 et seq. Defendants argued that the usury statute and the

pawnbroker statute are in conflict and that the pawnbroker statute is controlling because it was enacted more

recently and specifically applies to the subject transactions. Because they complied with the pawnbroker

statute with respect to the interest charged to the plaintiffs, defendants contended that plaintiffs' claims failed

to state a claim for relief.

         Plaintiffs argued that the pawnbroker statute and the usury statute should be read together to impose

a maximum rate of interest of five percent per month. Plaintiffs argued that the charge of 25 percent interest

in connection with each transaction violated the usury statute's prohibition against charging more than five

percent interest per month on a loan transaction.

         The district court, concluding that the two statutes conflict and cannot be harmonized and that the

pawnbroker statute governs the subject transactions, granted defendants' motions and dismissed the cases.

         On appeal, plaintiffs contend the district court erred by holding that the two statutes cannot be

harmonized and read to prohibit interest rates greater than 5% per month on pawn transactions.

         The Georgia usury statute provides in pertinent part that:




   1
    Darby also alleged defendants' repossession of his vehicle amounted to conversion because of the
alleged violation of the usury statute, and Walker additionally alleged violations of the Truth in Lending
Act, TILA, 15 U.S.C. § 1601 et seq, claims that appear to have been abandoned on appeal.

                                                        3
        Any person, company, or corporation who shall reserve, charge or take for any loan or advance of
        money, or forbearance to enforce the collection of any sum or money, any rate of interest greater than
        5 percent per month, either directly or indirectly, by way of commission for advances, discount,
        exchange, or the purchase of salary or wages; by notarial or other fees; or by any contract,
        contrivance, or device whatsoever shall be guilty of a misdemeanor; provided, however, that
        regularly licensed pawnbrokers, where personal property is taken into their actual physical possession
        and stored by them, may charge, in addition to said rate of interest, not exceeding 25 cents at the time
        the property is first taken possession of by them for the storage of said property.

O.C.G.A. § 7-4-18(a)(1997).

        Georgia's pawnbroker statute provides in relevant part that:

        (4)(A) During the first 90 days of any pawn transaction or extension or continuation of the pawn
        transaction, a pawnbroker may charge for each 30-day period interest and pawnshop charges which
        together equal no more than 25 percent of the principal amount advanced, with a minimum charge
        of up to $10.00 per 30-day period.

                (B) On any pawn transaction which is continued or extended beyond 90 days, a pawnbroker
        may charge for each 30 day period interest and pawnshop charges which together equal no more than
        12.5 percent of the principal amount advanced, with a minimum charge of up to $5.00 per 30 day
        period.

O.C.G.A. § 44-12-131(a)(4)(A), (B)(Supp.1998).

        Under O.C.G.A. § 44-12-130(2)(Supp.1998), a "pawnbroker" is "any person engaged in whole or

in part in the business of lending money on the security of pledged goods." A "pawn transaction" is defined,

in pertinent part, as any loan on the security of pledged goods, which include tangible personal property such

as a motor vehicle certificate of title. O.C.G.A. § 44-12-130(3),(5)(Supp.1998).

        Neither the Georgia Supreme Court nor the Georgia Court of Appeals has examined the apparent

conflict between these two statutes, and the Georgia superior court cases interpreting these provisions reach

contrary conclusions.

        In Bekele v. Georgia Cash America, Inc., Civil Action No. E-23710 (Superior Court of Fulton

County, Dec.6, 1994), the court held that the two statutes were in direct conflict, and that the pawnbroker

statute was controlling because it was more recently enacted and specifically applied to pawnbrokers. By

contrast, in Blakeney v. Jerry's Pawn Shop, Inc., Civil Action No. 96-A-7660-4 (Superior Court of Gwinnett

County, Aug. 27, 1997), and McWhorter v. Pawn Your Auto, Inc., Civil Action No. 93-A-0754-3 (Superior


                                                      4
Court of Gwinnett County, Feb. 11, 1994), the court held that the statutes should be read together to authorize

pawnbrokers to charge up to 5% per month in interest plus an additional 20% per month during the first 90

days (and 7.5% per month thereafter) in "pawnshop charges," which must be expenses actually incurred by

the pawnbroker in servicing the pawn transaction.

        In the only reported decision addressing this issue, the latter interpretation was adopted by a

bankruptcy court in Fryer v. Easy Money Title Pawn, Inc., 183 B.R. 322 (Bkrtcy.S.D.Ga. 1995), recon.

denied, 183 B.R. 654 (Bankr.S.D.Ga.1995). In addition to the consolidated cases on appeal here, a recent

Northern District of Georgia case also agreed with the holding in Bekele and rejected Fryer, determining that

the statutes were in conflict, and that the pawnbroker statute controlled in pawn transactions. See Precious

Maines v. Davis, Civil Action No. 1:98-CV-1376-MHZ (N.D.Ga. Nov. 20, 1998).

        There is no dispute as to whether the subject transactions are "pawn transactions." Nor do plaintiffs

allege defendants failed to comply with the pawnbroker statute. Plaintiffs' case hinges on whether these two

facially contradictory statutes can be read together to impose a 5% cap on the rate of interest that can be

charged in pawn transactions. Because this appeal depends solely on resolution of this question of Georgia

law, we certify the following questions to the Supreme Court of Georgia:

        CAN THE STATUTORY SCHEME REGULATING PAWNBROKERS, § 44-12-130-138 BE
        READ HARMONIOUSLY WITH THE CRIMINAL USURY STATUTE, O.C.G.A. § 7-14-18, SO
        THAT BOTH APPLY TO "PAWN TRANSACTIONS" AS DEFINED IN O.C.G.A. § 44-12-130(3),
        OR ARE SUCH TRANSACTIONS MEANT TO BE GOVERNED EXCLUSIVELY BY O.C.G.A.
        § 44-12-130-138.

        IS THE PERMISSIBLE RATE OF INTEREST AND FEES CHARGED IN "PAWN
        TRANSACTIONS" AS DEFINED IN O.C.G.A. § 44-12-130(3) GOVERNED SOLELY BY
        O.C.G.A. § 44-12-131, OR DOES THE CRIMINAL USURY STATUTE, O.C.G.A. § 7-14-18,
        APPLY TO MODIFY ALLOWABLE CHARGES SO THAT THE INTEREST CHARGED IN
        THESE TRANSACTIONS VIOLATES GEORGIA LAW.

        The phrasing used in this certified question should not restrict the Supreme Court's consideration of

the problem posed by the case. This extends to the Supreme Court's restatement of the issues and the manner




                                                      5
in which the answer is given. In order to assist the court's consideration of the case, the entire record, along

with the briefs of the parties, shall be transmitted to the court.

        QUESTIONS CERTIFIED.




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