*1 motions the administration and will not promotes justice action, of the to the we hold such unfairly prejudice any parties actions to be to class certification. appropriate prior case,
In the the trial court listed seven alternative present under Rule for dismissal grounds 12(b)(6) appellants’ amended We conclude that the alternative complaint. grounds dismissal were based on the trial court’s improper weighing merits of the claims. appellants’
Petition for denied. rehearing Thornton, J., concurs. CHANDLER,
LENDERS TITLE
COMPANY
Don
and On Behalf of All Other Persons
Situated
Individually
Similarly
04-41
Supreme 17,2004 delivered Opinion June *4 LLP, Clark, & Robert S. Eldredge William Friday, by: Shafer Waddell, Wood, Smith, A. & M. Jr.; Don Clay, by: Schnipper Schnipper, appellant. P.A.,
Nichols & H. and Todd Campbell, by: Gregory Campbell; Turner, for appellee. *5 L. Lenders Title Com- Corbin, Appellant Just ic ic e.e. of the order Garland appealed pany County
Donald Circuit Court Don Chandler’s lawsuit as a class certifying Appellee action, P. is the such to Ark. R. Civ. 23. This second pursuant we reversed the certification the first interlocutory appeal. appeal, insufficient, we on the that the trial court’s order was and ground factors remanded the matter to the trial court for further analysis Chandler, 339, 107 set Title out in Rule SeeLenders Co. remand, Pursuant to the trial court (Lenders S.W.3d 157 our (2003) 1). order, entered detailed a class a more certification as again granting action, of this is thus and this followed. Our appeal jurisdiction appeal reversal, to Ark. Ct. R. For Lenders 1—2(a)(7). argues pursuant Sup. that court lacked trial (1) trial subject-matter (2) jurisdiction; court abused its discretion in cannot classwhose members certifying 50,000 be identified review than without manual of more closing files; and the trial (3) court’s conclusions of law regarding predomi nance and are and to fail with this inadequate superiority comply court’s We mandate LendersI. affirm.
The and facts of this case were out at set procedural history I, in Lenders and we here. It suffice will them will length repeat to that in Chandler some sold Plot say January Springs to Everett Lawless. Lenders acted as the and settlement property transaction, escrow that re- Lenders agent. During charged ceived $50 each from Chandler and for Lawless document prepa- suit, ration. In October filed Chandler behalf of himself situated, Lenders, and others that similarly against alleging fees received are Lenders for documents document-preparation by Lenders, deeds, prepared documents such as including legal and notes. Chandler that mortgages, documents alleges legal and, thus, were not act of prepared by attorneys Lenders’ charging separate documents legal constitutes the unauthorized of law. Chandler asserts that practice Lenders’s actions violate the Arkansas Trade Practices Deceptive Act, Ark. Ann. Code 4-88-101 to -115 2001). Fie further (Repl. § asserts a cause of action for negligence, claiming by failing communicate him that the fee was unlawful and charged illegal, fee, such an unlawful and Lenders breached charging illegal the standard care owed Chandler and others situ- similarly ated.
In March filed Chandler a motion for class certifica- 4, 2002, tion. A was held on hearing which during June witnesses, from several and both presented testimony offered numerous exhibits. On issued parties court July its fact and conclusions of law on the class-certification findings
72 Thereafter, 21, order trial court entered an on the
criteria.
August
as a class action.
the case
certifying
court’s 2002 class-certification
trial
Lenders appealed
court,
and remanded for lack
and we reversed
order to this
I,
339, 107
Ark.
in the order. See
353
sufficient findings
remand,
submitted new
S.W.3d 157. On
proposed
parties
conclusions,
or
no
testimony
but
further
factual
and legal
findings
25, 2003, the trial court
On
evidence was received.
September
defined
a
the class action. The order
entered new order certifying
Lenders Title
the class
“All
who
Company
as
persons
paid
23,
transaction after October
document
in any
this certification order.
1997.” Lenders now
from
appeals
that
on
we note
Before addressing
points
appeal,
Ark. R.
a lawsuit
action is
the certification of
as class
governed by
the class-certification criteria
Civ. P. 23. The determination that
the broad discretion of
have been satisfied is matter within
court,
will
reverse the trial court’s decision
trial
and this court
Blue
Blue Shield
absent an
of that discretion. Arkansas
Cross&
abuse
Hicks,
269,
USA
Cashers
(2002);
v.
349 Ark.
I. Jurisdiction
first
For its
on
Lenders argues
point
appeal,
is void and
no effect because the trial court
certification order
without
determine whether Lenders’s
jurisdiction
practice
the blanks
standardized documents constitutes
filling
to decide
unauthorized
of law. It asserts
jurisdiction
practice
such an issue lies
with our
Court Committee
exclusively
Supreme
and
on the
Practice of Law. This issue was raised
Unauthorized
v.
in the
case of AmericanAbstract& Title Co.
rejected
companion
Rice,
in that
73 721 (2002); Inc. v. S.W.3d Tay-Tay, Young, Inc., 499 (2002). S.W.3d Loghry RogersGroup,
II. Class Identityof *7 For on the its second Lenders that trial argues point appeal, in court abused its discretion a classbecause the mem- certifying bers cannot be identified without a manual review of more than 50,000 of its real-estate files. Lenders that such a closing argues manual review is not an feasible of administratively way identify- Thus, the classmembers. it assertsthat trial court erred in ing class met the criterion In a of concluding numerosity. related Lenders contends that the class definition is argument, We overbroad. with both imprecise disagree arguments.
A. Numerosity
I,
As we
observed Lenders six criteria must be met
before suit
bemay
certified as a classaction under Rule 23: (1)
numerosity; (2)
(4)
commonality; (3)
(5)
typicality;
adequacy;
criterion,
and (6)
The first
predominance;
superiority.
numerosity,
that “the classis so numerous that
requires
of all members
joinder
Ark. R. Civ. P.
The exact size of the
impractical.”
23(a)(1).
class
of the class
proposed
members need not
identity
be
class;instead,
established to
certify
numerosity requirement
BPS,
Richardson,
be
common sense. See
Inc. v.
may
by
supported
834,
341 Ark.
In the
the trial court concluded that the
present
was met based
requirement
numerosity
facts that (1)
50,000
Lenders has closed more than
real estate transactions
2001;
between 1997 and
(2)
evidence showed that Lenders
not,”
or “more
routinely,
often than
a document1
charges
transactions;
case
the issues raised in this
in such
(3)
preparation
in which Lenders
in most of the closings
would be present
Chandler, namely
the act
(4)
complained
participated;
fee,
would
typical
of a
the charging
document-preparation
These
actions in other
findings support
Lenders’s
closings.
that the class met
numerosity requirement.
court’s conclusion
B. ClassDefinition
sufficiency
In a related
challenges
argument,
“All
who
out
the trial court:
the class definition set
persons
paid
fee in
trans-
a document
any
Lenders Title
Company
that this definition
Lenders asserts
action after October
1997.”
the trial court to
and thus
is too broad
impermissibly requires
determine
each individual case in order to
into the facts of
inquire
member. It also asserts that there is no
is a class
whether
person
members,
feasible
class
way
identifying
administratively
50,000
review of more than
that would
a manual
because
require
its
Lenders relies on this
files. To
of its closing
support
position,
*8
Ledbetter,
v.
355 Ark.
in State Farm Fire & Cas. Co.
court’s holdings
Co.,
28,
In
129 S.W.3d
as
those insureds of Defendant under Form
classwas defined
“[A]ll
a
claim or who have had an
FP7955 who have
damage
property
under said
a
claim
involves
damage
policy
unpaid property
lawor with the
added.)
(Emphasis
question
Plaintiff[.]”
fact
of
insurer,
Farm,
case,
that it
be
the
State
would
In that
argued
a
has a “common
whether or not policyholder
impossible
prove
Ledbetter,
fact” with
unless each of the homes
of law or
question
of the
foundation
class members is
damage
inspected
potential
Thus, an individual
to have resulted from water leakage.
alleged
home would have been
of each
necessary
policyholder’s
inspection
a
the class.
whether a
was member of
to determine
policyholder
the
certification on the
that the
This court reversed
class
ground
criteria for
class
definition
no
ascertaining
class
provided
objective
the trial court to delve into the
and also required
membership
in order to determine who is a class member.
merits
underlying
Thus,
that the class definition was too broad
this court concluded
be determined
because
members could not
potential
imprecise
the trial court’s
criteria without necessitating
by objective
inquiry
cause of action.
into the merits of
plaintiffs
plaintiffs
Kroger,
were
into
the classbe defined as
who
misled
persons
proposed
a
store because of
advertise-
at Kroger
double-coupon
shopping
that under such a
ments from 1990 through
Kroger argued
definition,
members of
it would be
virtually impossible
identify
This court
that in order to be
class.
holding
proposed
agreed,
a
under
certified as class action
Rule 23:
it
class
must
definite so that
description
sufficiently
[T]he
feasiblefor the
to determine whether a
administratively
court
a
individualis member
particular
class.Further-
proposed
more,
defined,
for a classto be
of the class
sufficiently
identity
membersmust be ascertainable referenceto
criteria.
objective
Moore,
Id. at
In the trial court defined the classin a present as all objective way who Lenders a precise, persons paid fee in transaction after October document-preparation any criteria, 1997. The class in this case is identifiable from objective namely payment document-preparation closing contrast, transaction with Lenders. In class in proposed Kroger could have included who claimed to have been anyone induced to there to take advertisement. shop advantage double-coupon were, fact, There were no criteria to if objective verify persons Moreover, Ledbetter, members of the class. unlike that in the class definition here the mere goes beyond tracking language Rule 23 that the members share “common of law or question Ledbetter, fact” with Chandler. unlike Additionally, identity *9 the class members in this case can be ascertained without an into the of investigation merits each individual’s claim.
We are not that it persuaded by is not argument feasible for Lenders to have to administratively review manually 50,000 each of the more than to files the class closing identify Instead, members. we with Chandler that agree Lenders should not to be allowed defeat class certification on its by relying and record inadequate The fact that filing system. Lenders cannot discover such information of a button on a by push computer does not render the class identification less any administratively feasible. feasible does not mean Administratively convenient. it undoubtedly would succeed on this point, Lenders to
Were for of bad records the purpose businesses to other keep encourage We thus affirm on this class actions. point. avoiding and III. Predominance Superiority trial court’s is that the made Lenders The final argument of law on criteria superiority conclusions predominance mandate in court’s with this fail comply are inadequate on the trial court Lenders asserts that remand I. Lenders Particularly, law on in its conclusion of predominance. made no change conclusion that the trial court’s Lenders also asserts post-remand is law inadequate. superiority 339, 107 I, this court set out S.W.3d
In Lenders 353 law in their fact and conclusions of trial court’s findings were Those entirety. concerning predominance superiority in a single contained paragraph: in the Plaintiffs complaint The issues raised common a action is the the classand class throughout
would predominate raisedin this case. with which to address issues method superior toto, the order in this at 161. After Id. at S.W.3d reviewing held that it was insufficient and gave following examples court its insufficiency: the trial court found to questions order does not statewhat
The or explain fact to the class.Nor doestheorder why of law or Likewise, over issues. thecommonissueswould individual predominate how is a in thiscase the method superior doesnotstate classaction why theorder Rather, merely order adjudicating conclusoryfashion, theclaims. for and that complaintpredominate statesthat thecommonissuesraised the theseissues.It does not classactionis the method superior addressing is Lenders that classaction address the made argument the class members of will because superior identifying potential closing-transactionanalysis. a closing-transaction-by require on this added). Lenders relies highlighted language Id. (emphasis the current certification order also its support argument do not insufficient. We agree. I, 23 does not stated in Rule
As require rather, the trial court must conduct court to rigorous analysis; a mean an to enable us conduct undertake analysis enough issue. Lenders misconstrues review of the certification ingful *10 77 as a directive this court for the trial court to language foregoing answer this court. It was not our questions specific posed intention create list for the trial court laundry things Rather, order, we were as a consider. simply emphasizing whole, short, In short of of Rule 23.” Id. requirements “[fell] we view the as of how foregoing language merely setting examples the trial court’s order could have been made We sufficient. now turn to Lenders’s elements of arguments regarding predomi- nance and superiority.
1. Predominance The criterion of that “the predominance requires of law or fact common to members of the class questions over individual predominate mem any questions affecting only Inc., BPS, bers.” Ark. R. Civ. P. also 23(b). See 341 Ark.
S.W.3d 403. The
for examination of this issue is
starting point
whether a common
or
law fact exists in the case
all
question
so,
class members. Id. If
the next issue is
whether
over individual
question
Id. When decid
predominates
questions.
whether common
over
ing
other
questions predominate
questions
members,
individual
this court
affecting only
does not merely
number
individual versus common claims. Id.
compare
Rather,
this court
if
decides
the issues
all
common to
class
issues,
members
over” the individual
“predominate
which can
resolved
the decertified
of a bifurcated
during
Id.
stage
proceeding.
Thus, the mere fact that individual
issues
defenses
bemay
raised
of individual members cannot defeat
regarding
recovery
class certification where there are common questions concerning
the defendant’s
that must be resolved for all
alleged wrongdoing
Cashers,
class members. USA Check
whether there are common of fact or law. The current questions certification order contains the six or of law following questions fact common class:
1. Does in of blanksin filling form pre-printed legal constitute practice of law?
78 Defendant of the violate practices
2. Do the admitted Trade Practices act? Deceptive disclose, degree with duty any Does the Defendant have 3. which of documents purport its role in preparation of specificity, have? may affect any rights party or otherwise convey legal cover fee routinely charged Does the document preparation or does it actually of documents non-legal only preparation of documents? legal for time in the spent preparation compensate are by by the Defendant covered provided 5. Which services fee, fees and by which are covered document preparation the closing by charges? are covered other which full- which time were attorneys employed 6. During periods the Defendant to oversee the time or part-time documents? legal court concluded that these common questions clearly
The trial the class. predominate throughout we light foregoing questions, its discretion in cannot trial court abused concluding say over individual issues. The that these common issues predominate second, first, and fourth ques common questions, particularly tions, threshold matters that must be are clearly preliminary, can be considered. Because decided before individual issues any issues, the fact that involve threshold these common questions certifi exist cannot be used to defeat class other individual issues this cation. thus affirm on criterion. We
2. Superiority
Lenders is that
The final criterion
challenged
“a
action is
which
class
finding
superiority,
requires
and efficient
methods
for the fair
to other available
superior
P.
See also
23(b).
Ark. R. Civ.
controversy.”
adjudication
Cashers,
Ark.
The a trial court found that class action was not the only fair most and efficient to the issues raised way adjudicate Chandler, but In fair efficient so the likely only way. ruling, trial court focused on the that fact the standard document- Lenders to each class member was a charged by $50, mere that individual cases would not be “illustrating clearly feasible.” The trial court find: went on to economically cases, Even if it were somehow feasibleto maintain individual issues and the repeated litigation liability possibilities of inconsistent results in a caselike this one outweigh allegation that there would a variance in the on as each proof damage claimant. if the on Alternatively, liability, Defendant prevails issuewould be laid restat the case. conclusion this SeeSummons R.R., v. Missouri (1991). Pacific The Court further finds that trial on the common is questions manageable to numerous individual in preferable casesfiled as as nine different many circuits.
Thus, the trial court found that a classaction is the method to superior these issues because try individual claims are (1) for small amounts that are not feasible for classmembers to a class litigate individually; (2) issues; action would inconsistent results on prevent (3) class action is more fair to both the individual class members and to Lenders; and a class action is (4) and the manageable preferred way handle such claims. Lenders that trial court’s argues on findings supe First, are flawed.
riority Lenders asserts that the finding regarding the economical of a class action in this case is feasibility negated by a section Act, of the Arkansas Trade Practices which Deceptive is who provides successful a claim litigant under bringing Act recover fees. See may Ark. Code Ann. attorney’s 4-88-113 (f) § However, We do not 2001). with this assertion. (Repl. disagree fees, alone, we do not view as availability attorney’s standing the trial court’s negating The trial court’s analysis superiority. of the four that issue but one findings on this was finding of a class favor of the concluded superiority court weighed action. trial court’s that claims that the finding
Lenders also results lead to inconsistent actually weighs individual cases may asserts Lenders mistakenly class certification. On this point, against to are those the trial court referred that the inconsistent results that each of the individual’s claims. We from the differences in arising view, it from the as we think do not with this apparent agree the trial court results envisioned by context the inconsistent cases to be arise the individual having are those that would from courts, different this juries. tried in different judges its on the the trial court’s conclusion finding supports respect, criterion superiority. action causes of asserted by Finally, argues Chandler, the Arkansas Trade violation namely Deceptive are for class actions
Practices Act and negligence, proper on each individual because each claim will turn what necessarily class believed transactions. closing member was told or during *13 Chandler cannot It that the conduct of by give asserts complained a class member rise to a cause of action for unless damages the that he or she would have objected demonstrates to factfinder to documents and for the services of its legal opted disclosed that it was not an if Lenders’s had attorney, agents In this to such documents. respect, complete legal permitted that is in the mind of the individual. Lenders the argues injury Baker, its Lenders relies on To support argument, wherein this court concluded that to a classaction court did not abuse discretion refusing certify its the individual issues that where case numerous “presented] [went] conduct, causation, to heart of the defendants’ injury, the as each that the defendants’ to will liability such plaintiff damages, Id. be at 992 have to resolved on basis.” case-by-case on decision S.W.2d at 801. Lenders also relies the Circuit’s Eighth cert, Bank, F.3d Cir.), Federal 953 (8th Glover Standard denied,537 the court reversed U.S. wherein (2002), appellate the of certification in an action order brought by mortgage on the fees the lender to broker borrowers to recover paid by fees. Circuit were referral The they illegal Eighth ground statements concluded that the was the by issue governed policy issued the Urban Development by Department Housing basis,1 determination on a which (HUD), case-by-case required such, that, as a class action was not appropriate. the certifi Neither these cases reversal of requires cation order in this case. The six of law or fact questions trial court found to be common to all of the class members may determined without a of each into merits case-by-case analysis individual’s For claims. first and third common example, whether the in of standardized questions, concerning filling legal so, and, forms constitutes of law if whether Lenders practice owed a to disclose that such were documents duty prepared by are issues of law that do non-lawyers, depend upon circumstances of an individual’s case. particular Similarly, fourth whether the question, regarding document-preparation for time routinelycharged compensates spent preparing documents, be answered without to the legal may resort having facts of each individual case. The fact that particular there bemay individual issues does not defeat the trial court’s regarding damages that a class action is finding superior.method addressing threshold issues that are predominant, the entire class. We thus affirm trial court’s ruling superiority. J.,
Thornton,
dissents.
For the reasons ar-
Thornton,
dissenting.
Ju
ce,ce,
Ray sti sti
in AmericanAbstract& Title Co. v.
my
Rice,
I dissent. respectfully *14 1 HUD two-pronged established a determining test for whether fees to a paid mortgage illegal broker were referral fees. The test a determination in necessarily required (1) goods, each individual case toas whether were facilities, services actually provided (2) and whether the was related to the compensation value paid; compensation reasonably goods, or services facilities, provided.