In this post — part of a in a series on the technique of storytelling in an appellate brief by using stock stories as a framework for the narrative argument — I’m going to discuss an example of storytelling in a winning appeal brief I filed with the Alabama Supreme Court. The Alabama Supreme Court’s opinion in the case is published at Austin, et al. v. Alabama Check Cashers Ass’n, et al., 936 So.2d 1014 (Ala. 2005).

I represented the Austins and other payday loan borrowers as intervenors in an action where the State Banking Dept. has been sued by and reached a consent agreement with the Alabama Check Cashers Association, which was actually a group of payday lenders seeking to evade application of Alabama’s usury law. After intervention was granted, I moved to set aside the consent order that had established a framework for the making payday loans and sought to have the court declare that the interest rate limitations of the Alabama Small Loan Act applied to the transactions. This was a question of first impression and the trial court ruled that the transactions at issue, disguised as check cashing transactions, were not loans and thus not subject to the Act.

Alabama Supreme Court Building

Alabama Supreme Court Building (Photo credit: jimmywayne)

On appeal to the Alabama Supreme Court, my job was to convince the court, without the benefit of true legislative history for the Act, that when it was enacted in 1959 it was intended to apply to transactions where a worker would write a $120 check in return for receipt of $100 and cashing of the check was deferred until the worker’s payday. I feared that on appeal my brief could turn into a boring discussion of the rules of statutory construction and I wanted to avoid creating a losing circumstance where a boring brief was asked to obtain a reversal of the trial court. I knew I was going to have to find a way to present the facts and issues in a compelling way to demonstrate how the payday lenders were exploiting consumers and to explain why the Small Loan Act was enacted to protect consumers from this very type of transaction.

Without knowing it at the time, I using the technique of storytelling in writing this brief. I can see now that I used the stock story of “the Quest,” for enactment of the Alabama Small Loan Act. I was able to piece together enough references to tell the story of how in Alabama, because of the actions of a few reform-minded persons acting over several decades, the Small Loan Act had come to be enacted. The story began with  background on the societal problem of wage earners dependent on usurious loans. My brief explained:

Historical context is important in understanding the intent of the Alabama Legislature in enacting the Small Loan Act in 1959. The lending environment for small loans in Alabama and elsewhere in the United States during the first-half of the 20th Century was  a dangerous one for consumers. The “loan shark” commonly preyed on the needy and necessitous.  To avoid the application of general state usury laws, which generally limited interest to less than 10%, the slick operator employed a wide variety of subterfuges to place a disguise over the lending transaction. For example, usurious loans were often disguised as an “assignment of wages” or “salary or wage buying and selling,” ….

I then discussed the work of the national organization the Russell Sage Foundation, beginning in the 1920’s, to get a Uniform Small Loan Act enacted across the country.

The first real attempt to find an answer to the nationwide problem of predatory lending practices was made the Russell Sage Foundation, which financed a report on wage buying and other lending subterfuges occurring in the early 1900’s, and eventually proposed a model usury bill known as the Uniform Small Loan Law. By the 1940’s, most states passed a version of the Uniform Small Loan Law with interest rates high enough (36 to 42% a.p.r.) to encourage reputable finance companies to make such small loans, then generally contemplated as loans of $300 or less.

I then moved the focus to Alabama, where I found materials describing the work of a early legislators, then the special committee of the State Bar Association,  and a rising politician named George Wallace, who had worked diligently to enact the Small Loan Act. These efforts were pitted against the powerful “loan shark lobby” in Montgomery. I relied heavily on quotations from the report of the Bar committee, such as the following, to describe the battle faced by reform efforts when the legislature weakened proposals made in 1927 and 1932 to adopt a meaningful small loan law.

[T]he variances between the Acts Nos. 268 and 339 and the Uniform Small Loan Acts bear the unmistakable marks of the loan sharks’ teeth. Anything which would hurt loan shark traffic, either by efficient state regulation or the legitimizing of reasonable, respectable, legal competition was painstakingly eliminated.

I described how another attempt, the Tucker Act, was defeated in the Alabama Legislature in 1939, and how finally,  after decades they finally succeeded in 1959 in having the Small Loan Act enacted as a broad consumer protection for low wage workers. I then described how just a few decades later that work was threatened by payday lenders.

The birth of the modern payday loan industry out of the roots of the old subterfuge called “wage buying” has been attributed to the creation of a business in Kentucky in 1993 called Check Into Cash. Since then, the cancer of 500% payday lending has spread nationwide, and it did not take long for a payday loan enterprise to show up in Alabama, making its usurious loans under the disguise of a check cashing business.  In 1994, the District Attorney of Franklin County, Alabama initiated an investigation of a payday loan business that was operating in the same manner as the Appellee payday lenders in this case.

English: Cash Money - 24 hour payday loan outl...

(Photo credit: Wikipedia)

The appeal brief went on to argue that Alabama’s Small Loan Act had to be interpreted based on the historical context of its enactment.

This controversy did not begin when the payday lenders entered into a consent order with the Banking Department in 1998. It began many decades ago, when wage borrowing was recognized as a scurrilous business and groups of reformers fought the “loan shark lobby”to eventually enact the Small Loan Act as protection for consumers by preventing usurious loans from being disguised by subterfuges such as the deferred presentment check cashing transaction now at issue. The case law and the State Bar Association committee reports clearly identify the purpose of the Small Loan Act as being aimed directly at transactions of the type now before this Honorable Court. This Court should honor the efforts of these reformers by recognizing the purpose of their efforts was to regulate transactions of the very type now before this Court.

While if I had written the appeal brief now, instead of 2002, I would have used some of the writing techniques I have learned to make the story of “the Quest” even more dramatic, but as written, the brief was certainly more interesting than if it had concentrated on a pure statutory construction approach. By telling a story of the efforts of a group of underdog consumer protection advocates against the powerful loan shark lobby, the brief placed the reader in a position to root for the reform effort and, once emotionally invested in the achievement of the enactment of the Small Loan Act, it was more than likely the reader would not want that victory to be “undone” by a holding that the payday loans at issue were not loans at all.

Thus, the lesson to take from this post is to consider, before writing your brief, if there is a story presented by the litigation you are involved in. If so, is it a compelling story that portrays your client favorably. If so, try finding a stock story that fits and blend your story into the stock story. It may help you win your next appeal.

Advertisements