Darla Legg and Jason T. Legg, on Behalf of Themselves and All Persons Similarly Situated v. West Bank
2016 Iowa Sup. LEXIS 4
| Iowa | 2016Background
- Plaintiffs Darla and Jason Legg sought class certification over West Bank’s practice of charging one-time nonsufficient fund (NSF) fees after changing transaction sequencing from low-to-high to high-to-low on July 1, 2006.
- Claims included usury, unjust enrichment, and breach of an implied/express duty of good faith arising from the sequencing practice.
- District court certified multiple subclasses (usury and sequencing); West Bank appealed interlocutorily.
- This opinion narrows certification after the court’s companion decision (Legg v. West Bank) resolved several summary-judgment issues against the plaintiffs.
- The Supreme Court affirms certification only for the good-faith sequencing claim and vacates certification as to other claims (including usury and unjust enrichment).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the class satisfies numerosity and commonality under Iowa R. Civ. P. 1.261 | Leggs: Class is large; sequencing and liability questions are common to all members | West Bank: Individual issues (dates, amounts, payments) will predominate and defeat commonality | Numerosity conceded; commonality met for the good-faith sequencing claim because shared liability questions dominate despite individualized damages |
| Whether a class action is the fair and efficient method under Iowa R. Civ. P. 1.262(2)(b) | Leggs: Individual suits are impracticable and inefficient; class needed given small individual damages and complex litigation | West Bank: Individual remedies suffice; class management and individualized issues make class inappropriate | Court: Certification for the sequencing good-faith claim is fair and efficient; factors (including risk of inconsistent adjudications and complexity) favor class treatment |
| Adequacy of class representatives and counsel under Rule 1.262(2)(c) | Leggs: Representatives and counsel are experienced, will advance costs, and have no conflicts | West Bank: Leggs are inadequate because they are no longer customers, suggesting possible conflicts | Court: No special circumstances showing inadequacy or conflict; representatives and counsel are adequate |
| Scope of certification given related summary-judgment rulings | Leggs: Class should include all claims tied to sequencing and fees | West Bank: Certification should be denied or limited due to prior summary-judgment dispositions and statutory inapplicability | Court: Limits certification to the good-faith sequencing subclass only; other claims (e.g., usury, unjust enrichment) excluded per companion opinion |
Key Cases Cited
- Vos v. Farm Bureau Life Ins. Co., 667 N.W.2d 36 (Iowa 2003) (district court has broad discretion over class certification)
- Kragnes v. City of Des Moines, 810 N.W.2d 492 (Iowa 2012) (abuse-of-discretion standard and justification for class actions in complex, small-claim contexts)
- Anderson Contracting, Inc. v. DSM Copolymers, Inc., 776 N.W.2d 846 (Iowa 2009) (abuse-of-discretion requires clearly unreasonable grounds)
- Luttenegger v. Conseco Fin. Servicing Corp., 671 N.W.2d 425 (Iowa 2003) (predominance/common nucleus of operative facts standard for class certification)
- City of Dubuque v. Iowa Trust, 519 N.W.2d 786 (Iowa 1994) (numerosity presumption for classes of forty or more)
- Vignaroli v. Blue Cross of Iowa, 360 N.W.2d 741 (Iowa 1985) (individual damage variations do not necessarily defeat class certification)
- Stone v. Pirelli Armstrong Tire Corp., 497 N.W.2d 843 (Iowa 1993) (special circumstances required to deny certification for inadequate representatives)