All Aboard? Missouri Statute Risks Failing to Protect Consumers from Hidden Fees and Deceptive Practices of Prominent Companies.

AuthorSchroeder, Ethan E.

    At some point, every consumer has bought something and then found themselves surprised by the hidden fees and countless documents that must be signed as part of the purchase. It may even lead to some level of buyer's remorse. However, it is not often that buyer's remorse gives rise to a class action lawsuit brought by over 100,000 consumers against an affiliate of one of Missouri's largest private corporations. (1) Consumers, such as Robert and Janet McKeage, are often forced to choose between holding retailers accountable for their deceitful practices or paying increased transaction costs when dealing with Missouri retailers. With some of Missouri's bordering states having more comprehensive unauthorized practice of law statutes and punishments, (2) Missouri's General Assembly should reevaluate the state's own laws in light of a movement toward enhanced consumer protection laws. Sections 484.010 and 484.020 of the Missouri Revised Statutes define what conduct constitutes the practice of law, who is authorized to practice law, and what punishments are levied against anyone engaging in the unauthorized practice of law. (3) If the General Assembly does not act, retailers, such as TMBC, LLC, may be enticed to continue deceitful business practices such as profiting off of unlawful charges and hidden fees.

    This Note analyzes the application of Missouri's prohibitions on the unauthorized practice of law to retailer-consumer transactions and how Missouri might look to amend its statutes to balance consumer protection with the need for efficiency in retail transactions. Part II details the facts and holding from McKeage v. TMBC, LLC. Part III examines Missouri's unauthorized practice of law statute and compares it to similar statutes in states like Arkansas and Kansas. Additionally, it focuses on the Eighth Circuit's analysis of what actions constitute the unauthorized practice of law in Missouri--most notably, the applicability of the statute to retailer-consumer transactions. Part IV explains the decision in McKeage v. TMBC, LLC. And finally, Part V discusses how lenient penalties under Missouri's unauthorized practice of law statute increase the risk that retailers will employ unethical business practices as a means to further deceive consumers.


    TMBC, LLC ("TMBC"), a corporation headquartered in Springfield, Missouri, sells boats and trailers through dealerships across the nation, many of which are located within Bass Pro Shops. (4) In 2008, Robert and Janet McKeage bought a boat, motor, and trailer from the TMBC dealership in St. Charles, Missouri. (5) The purchase was memorialized in a standard form contract used by TMBC nationwide. (6) As part of the transaction, TMBC charged the McKeages a $75 "document fee." (7) This fee covered the cost of preparing documents such as the form sale contract itself, a bill of sale, a power of attorney form, and title, license, and registration documents. (8)

    Claiming the boat was defective and wishing to rescind the sale, the McKeages filed suit against TMBC in the Circuit Court for St. Charles County, Missouri. (9) The McKeages alleged that TMBC's practice of charging a "document fee" constituted unauthorized law business in violation of sections 484.010 and 484.020 of the Missouri Revised Statutes. (10) Per the contract's choice-of-law provision, the case was transferred to Greene County, Missouri, where the McKeages requested that the state court certify a nationwide class action to include other TMBC customers who were charged a "document fee" and whose sale contract contained a Missouri choice of law provision. (11) The court determined that the class consisted of approximately 100,000 TMBC customers. (12)

    Following certification of the class, TMBC removed the action to federal district court under the Class Action Fairness Act of 2005. (13) The parties filed cross-motions for summary judgment. (14) TMBC alleged that charging a document fee did not constitute the unauthorized practice of law because TMBC's employees exercised no legal judgment while filling out documents. (15) TMBC also argued that customers who signed contracts with TMBC outside of Missouri should not be subject to Missouri law. (16) Finally, TMBC argued that damages should not be calculated based on the entire document fee because portions of the fee went to services that did not constitute unauthorized law business under sections 484.010 and 484.020. (17)

    The district court rejected TMBC's arguments and granted the McKeages' motion for summary judgment. (18) According to the district court, TMBC engaged in the unauthorized practice of law when it charged a document fee, Missouri law applied to transactions that occurred outside Missouri, and the damages award should be based on the entire "document fee." (19) The district court then awarded treble damages under section 484.020. (20) Based on the number of members in the class, the damages, including treble damages, were calculated to be $21,735,754. (21)

    On appeal to the Eighth Circuit, TMBC contended three issues. (22) First, TMBC argued that the court should not have certified the class because individualized proof of Missouri choice of law provisions in each customer's contract was required. (23) Second, TMBC argued that the district court misinterpreted Missouri case law regarding unauthorized law business in granting summary judgment to the class. (24) Finally, TMBC alleged that the district court erred in applying Missouri law to conduct that occurred outside of Missouri. (25)

    The McKeages filed a cross-appeal challenging the district court's award of attorneys' fees. (26) Specifically, they argued that the district court should have enforced the fee-shifting provision in TMBC's standard form contract and that the fee award should have been based on the entire common fund rather than the un-trebled damages. (27)

    Reviewing the lower court's judgment de novo, the Eighth Circuit held that (1) the district court properly certified the nationwide class action based on the requirements of Federal Rule of Civil Procedure 23, (28) (2) the "document fee" charged by TMBC was a legal document and the document's preparation constituted unauthorized law business under section 484.020, (29) and (3) Missouri law could be applied to sales that occurred outside of Missouri. (30)


    Missouri's unauthorized practice of law statute is similar to that of its neighboring states, such as Arkansas and Kansas. Some differences in penalties, however, impact the deterrence effect of each state's statute, and such differences may incentivize companies to include choice of law provisions in their contracts to take advantage of lower risk.

    1. Missouri's Unauthorized Practice of Law Statutes

      The Missouri General Assembly determined that the unauthorized practice of law is a danger to Missourians. (31) Missouri law prohibits an unlicensed individual from engaging in the "practice of law" or "law business." (32) The unauthorized practice of law is punishable as a misdemeanor and subject to a fine of up to $100 and liability for damages equal to treble the amount charged for the services the offender provides. (33) Although the "practice of law" includes acts committed both in and out of court, "law business," in particular, implies that a nonlawyer has "held himself out" in a business, "by repeated acts" or "by the exaction of a consideration," in which he acts in the same capacity as a lawyer. (34) Missouri's unauthorized practice of law statutes are "primarily intended to protect the public from the rendition of certain services, deemed to require special fitness and training on the part of those performing the same, by persons not lawfully held to possess the requisite qualifications." (35) In applying these statutes, Missouri courts have attempted to create a "workable balance" between protecting the public and maintaining the efficiency required for a competitive marketplace. (36) This balance between efficiency and consumer protection has grown particularly contentious in recent years as standard form contracts become more prevalent.

      In Eisel v. Midwest BankCentre, the Supreme Court of Missouri illustrated the analysis required under sections 484.020 and 484.010 to determine whether preparation of standard form documents constitutes the "practice of law." (37) In Eisel, bank employees prepared several pre-printed, standard documents when processing mortgage loans. (38) These forms included documents such as a deed of trust and a promissory note, which the Supreme Court of Missouri has concluded constitute legal documents because their preparation requires the exercise of legal judgment or discretion. (39) By analogy, the Eisel court held that the bank's practice of charging a fee for completing the pre-printed forms was unauthorized law business because the "charging of a separate additional charge tends to [place emphasis on] conveyancing and legal drafting as a business rather than on the business of being a [banker]." (40)

      In subsequent cases, Missouri courts have clarified the analysis of Eisel. Missouri courts now hold that "charging a separate fee for the completion of legal forms by non-lawyers constitutes the unauthorized practice of law business." (41) Determining whether a particular form is legal in nature requires the court to "balance the protection of the public against a desire to avoid unnecessary inconvenience and expense." (42) A key factor in this inquiry is the level of legal judgment or discretion required to prepare the form. (43) However, once it is determined that a particular document is legal in nature, the act of charging a fee for the preparation or completion of that document constitutes unauthorized law business, even where a non-lawyer does not exercise any legal judgment in completing the form. (44) In McKeage, it was undisputed that TMBC could have hired attorneys to prepare...

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