*1
AR;
BANK,
Rock,
Little
UNION NATIONAL
Financial
Insurance
Katherine
Guaranty
Company
BARNHART,
for Herself and all Others
Situated
Similarly
90-291
Supreme delivered Opinion February *2 Cravath, Moore, and Brian Robert S. Swaine & by: Rifkind Fraser, Company. Insurance S. Guaranty Financial for appellant *3 Burks, Clark, Elizabeth W. J. by: Larry &
Friday, Eldredge Moore, Robben, H. for Union National Jeffrey appellants and Company. Insurance Guaranty Bank and Financial Pearson, Hirsch, P.A., Hirsch; E. E. Kent Kent and by: Evans, Chadwick, Marshall Dale for appellee. Evans & by: class Holt, Jr., This involves appeal Jack Chief Justice. (Union Bank The Union National certification. appellants, (Financial Bank) Guaranty Company and Financial Insurance Court’s Washington County Chancery the Guaranty), oppose and sanitation of “the consisting taxpayers certification of a class addition, In the of Arkansas.” City Fayetteville, of the ratepayers of the notice sent to the contest the form and content class. We affirm. 1985, the Northwest Arkansas Resource
In December finance issued revenue bonds to Recovery Authority (Authority) of the solid waste facility dispose construction of an incinerator Fork, Washington and West as well as of the cities of Fayetteville and, at to the public The bonds were later remarketed County. time, with the Authority entered into a contract Fayetteville the debts of the unconditionally guarantee in which it agreed Union Bank which included debt service on the bonds. Authority, is Guaranty and Financial is the trustee for the bonds Authority’s the insurer of the bonds. terminated for
The incinerator project subsequently referendum non-binding aby lack of a location and cost overruns electorate. Fayetteville vote 15, 1989, directors August city passed
On Fayetteville 3444, purpose which sanitation rates for Ordinance raised thereafter, was filed on debts. suit Authority’s Shortly paying of Fayetteville behalf of the and sanitation taxpayers ratepayers consti- alleging Authority the contract between the and city Const, 16, tuted of Ark. art. 13. “illegal exaction” violation § that the be declared null and plaintiffs requested agreement void, refunded, that the rates exacted under Ordinance 3444 be city enjoined collecting that the be from permanently any monies under ordinance.
Following a bout of over a suitable lengthy disagreement action, for the class Katherine Barnhart representative appellee was certified class as in accordance with ARCP representative, 20, 10, Rule in an order issued 1990. On August September 1990, the chancellor ordered notice in two by publication, Washington County newspapers, to the absent members.
Union Bank and Financial now Guaranty appeal, basing their arguments reversal on the of Rule 23. requirements They contend 1) Ms. Barnhart’s of the class is not fair to representation all 2) Ms. parties; Barnhart is not an adequate representative class, counsel; but a mere 3) Ms.Barnhart instrumentality is unqualified 4) serve as class the notice representative; prescribed by chancery court None of these inadequate. *4 arguments have merit. we
Initially, note the since appellees argue that Fay etteville’s contract is being challenged illegal as an exaction under Art. 16 a we to provision self-executing, have held be § rights to taxpayers’ bring such a suit cannot be limited by however, of Rule requirements 23. The was appellees’ complaint, brought suit, as a Rule 23 class action and the trial court consistently treated it as such. Since this issue was not developed level, at the trial we decline to address it.
I. FAIR AND REPRESENTATION ADEQUATE interrelated, Because they are two of the one and points appellants’ argument will be combined for of our purposes discussion. that, in class assertion
We with initial agree appellants’ suits, insure fairness both is to greatest required “the care action the defendants.” We of the class and to the absent members however, basic principle with their contention that this disagree, was not observed here. objections process by
The first focus their on the appellants role It is representative. assumed her as which Ms. Barnhart project the incinerator litigation concerning true that of different a number by long history, involving marked a by were filed Mr. initially successive actions plaintiffs. Two attorneys, one of Ms. Barnhart’s Cummings, currently Gordon were class action present which later dismissed. voluntarily Robson, was disqualified first Mr. Joe who later by was instituted Court. Washington County Quorum to his on the position due Mr. Robson’s counsel arose over Disagreement among plaintiff’s successor, Roudabush, was twice Mr. whose name proposed role of class agreed withdrawn before Ms. Barnhart to assume the of the “only assert that the function Appellants representative. in been to as counsels’ litigation successive this has serve plaintiffs argue to the action They ticket admission courtroom.” Barnhart, loose band of by has been not Ms. but “a propelled . who to be court. . .” lawyers want two of Model of Profes- Appellants cite violations Rules Conduct, a a being by lawyer sional one the solicitation of plaintiff see Rule 7.3, 1.8(e), and the other Rule which gain, pecuniary governs an to a client. provision of financial assistance attorney’s objection The latter rule was cited in support appellants’ an and his agreement attorneys, between Mr. Roudabush it not call client for whereby attorneys “the shall agreed upon do contend litigation.” (The costs or not expense and, fact, agreement Barnhart Ms. Barnhart Ms. applies one her attorneys, testified at her that she had deposition paid Froelich, retainer.) Mr. a further to the that the class
Appellants point representa- fact “nominees,” tives have counsel been described as by opposing entry that Mr. lien labeled “search attorney’s Froelich’s shows *5 for been filed “on and that have representative,” pleadings facts, behalf’ of All of these lawyers. the plaintiffs’ being show action argue, that Ms. Barnhart is a mere in an “pawn maintained counsel.” by forth
First,
put
that the evidence
we are not convinced
Ms. Barnhart
their assertion that
by
appellants supports
litigate
attorneys’ attempts
as
of her
recruited
actively
part
Furthermore,
conduct
egregious
absent more
their own interests.
of
rights
we
not believe the
of the class
do
attorneys,
on the part
them class status.
by denying
should be prejudiced
plaintiffs
R.
Anti-trust
22 Fed.
Litigation,
See In re Nissan Motor Corp.
Arkansas has not
(S.D.
1975).
specifically
Serv. 2d 63
Fla.
issue,
jurisdictions
few cases in other
addressed the
but the
of
attorney’s
which class action status was denied as the result
misconduct,
the law
questions regarding
also involved serious
or
the other
yer’s
meeting
require
deficiencies
competence,
ments for a class action. See
Breach Ethics or Other
Effect of
of
Misconduct
on Status
Class Action
Attorney
Plaintiffs’
of
Procedure,
Rule 23
Federal
Civil
16 A.L.R.
Rules
under
Fed. 883
of
it
(1973). When otherwise
that the
appears
representa
tive
will
the interests of
plaintiff
“fairly
adequately protect
class,”
more
allegations
attorney misconduct are
appropri
ately addressed to the state
committee. See Halverson
disciplinary
Mart, Inc.,
1972);
Convenient Food
Ms. Barnhart’s own established that she was testimony interested in joining the lawsuit before she was ever “proposed” as its class and that she representative voluntarily agreed this role. Ms. accept Barnhart testified at her which deposition, consideration, was submitted to the chancellor for that she had Robson, Mr. informed the initial “if there was representative, I could anything do to in his cause to let me know.” She later help told him that willing she would be to be named as a in the plaintiff class action suit. Ms. Barnhart stated that several such conversa- tions with Mr. Robson had occurred in the to her year prior joining lawsuit. She further testified that she had made Froelich, similar remarks to Mr. commencing approximately eight months before her for certification. deposition request
The chancellor is in the best to assess the position credibility heavily witnesses and where an issue turns upon we will defer to the trial Nat’l Bank v. credibility, court. First *6 (1990). Most Bank, S.W.2d 38 304 Ark. Mercantile to continuing jurisdiction the court 23(d) gives Rule importantly, in order to ensure that the and conditions additional terms require The represented. are and being fairly adequately class members towards this responsibility his disposition chancellor indicated take Ms. extension of time to when he granted with the certification before proceeding Barnhart’s deposition hearing. Ms. argument to that appellants’
We find no merit 23’s notions of fairness violates Rule Barnhart’s representation and adequacy. QUALIFICATION
II. and Ms. Barnhart’s qualifications next attack Appellants the class. ability adequately represent 23, in effect at the time of of Rule pertinent part decision, follows: the chancellor’s as provided Class Action. Where the (a) ques- Prerequisites many of a or interest of general tion is one common numerous, it is or where the are and persons, parties the court within a bring all before impracticable time, for the reasonable one or more sue or defend may benefit of all.
(b) Class Actions Maintainable. An action be may maintained a class action if the of subdivi- prerequisites as satisfied, (a) sion are and the court finds that the questions of law or common to the members of the class fact individual affecting only over predominate any questions members, a to other and that class action superior adjudication available methods for the fair and efficient the controversy. (a)
Subdivision amended to read: subsequently (a) to Class Action. One or more Prerequisites representative members of a class sue or be sued as may (1) on behalf of all if the class is so numerous parties only (2) members is there are joinder impracticable, of all class, (3) the claims of law or fact common to the questions are parties typical or defenses of the representative class, (4) claims or defenses of the the representative will the interests of parties fairly adequately protect the class.
The amended version
the language
tracks
of the federal rule.
*7
However,
rule,
cases under our old
we have held
analyzing
that
“the
of the
spirit
federal rule is to be found
our Rule 23 even if
not,”
all the words are
and that “both- set out the same basic
for a class action.” First
requirements
Nat’l Bank Mercantile
Bank,
199,
argued claims, i.e., that Ms. Barnhart’s the challenged contract and, therefore, constituted an illegal exaction sanitation ratepayers are entitled to a refund of the illegally monies, exacted are not of the typical class she purports represent. however, appellants argue, that some tax and rate paying members of the community oppose nullification of the and, thus, city’s contract Ms. Barnhart does not adequately represent their interests. This argument is meritless.
Appellants offered the affidavits and of six testimony Fayetteville residents who were of the opinion that a repudiation of the city’s contract with the would be harmful Authority to the and community who the class action. opposed case law Although supports the appellants’ contention that adequate representation bemay if jeopardized a representative’s interests are in conflict Labs, with members, other Inc., class see Payne v. Travenol 673 F.2d (5th Cir. 1982), what, six residents who with disagree otherwise, claim, is a potentially legitimate common to thousands of people, does not decertification. justify
It is further argued appellants that Ms. Barnhart is unqualified the class represent because she has not followed the and not discovery requests did with comply not proceedings, and, not pay she does real because lastly, in her deposition, candid purported the interests represent she taxes cannot property class members. as we arguments the latter three summarily
We dismiss record, do we find in the nor find them support do not sufficient rates does sanitation Ms. Barnhart pay them disqualifying. her representation this is sufficient for purposes sales taxes and at issue. Ms. Barnhart has not assertion that As for appellants’ must proceedings, representative followed the adequately action, interest in the some minimal level of simply “display assist in challenged, ability with the practices familiarity Gentry v. C & making litigation.” decision as to the conduct Co., 1984); see also First D Oil (W.D. Ark. 102 F.R.D. *8 Bank, at answers to her supra. Nat’l questions Ms. Barnhart’s she has more than hearing, and at the indicate deposition, in in involved the knowledge and interest the issues adequate understanding of the has articulated her litigation. clearly She matter, we have no willingness to the pursue lawsuit and of she the hesitancy holding adequate representative in that is an class she to represent. purports
III. NOTICE the chancellor’s prescribed the contend Finally, appellants members, was in notice to the absent class which publication Washington two County newspapers, inadequate. matter,
As the chancellor’s argues an initial Ms. Barnhart is and that the order with to notice not separate regard appealable standing no notice. challenge have to appellants Nesheim, Motor Co. v. Ford Credit We in explained 777, 253, 777 254, (1985) (reversed 285 Ark. 686 S.W.2d on Jacquelin, Eisen Carlisle & 479 grounds) other F.2d (citing v. (2nd sustaining that “an a class 1973)), 1005 Cir. since order the allegation action involves issues ‘fundamental to further case,’ from conduct . . . order is separable of also class action certifying merits the case. . .” and thus an order a Likewise, is reviewable on an order appeal. pre interlocutory to the further scribing notice the class action “fundamental
199
case,”
is appealable.
of the
conduct
the notice
challenge
standing
also have
Appellants
class, see
rights
due
asserting
process
are not
they
since
64,
685 S.W.2d
Ark.
Rogers,
Co.
Ford Motor Credit
v.Co.
Petroleum
Phillips
own. See
of their
(1985),
rights
but
Without a determination
Shutts,
As stated previously, version, decision. Under time of the chancellor’s at the that notice court order “may that the trial (d) subsection provided . . .” The amended as it direct. may be in such manner given, “in action version, any urge requires which us to apply, given members are to be sought,” relief is monetary which circumstances, including under the “the best notice practicable through who can be identified individual notice to all members on to what goes specify reasonable efforts.” The new rule notice. information is to be contained 10, In our curiam delivered December per opinion, 1990, we in the rule would become changes stated the expressly 1, effective rule is that all February 1991. The established statutes are to a having only prospective opera be construed as tion, legislature give unless the and intention of the purpose necessarily them a effect is declared or is retrospective expressly from the used. River States Pub. Co. v. implied language Gannett Comm’n, 304 Ark. Arkansas Jud. Disc. & Disabil. *9 (1990).
S.W.2d 292 are to be in the same applied Court rules manner. Id.
Here, once a in two local publication newspapers, weeks, week for three the absent class members of the notifying action, asserted, the remedies of the class the claims pendency counsel, sought, and information as to the class representative, trial, and time and location of the was more than under adequate Furthermore, 23(d). former Rule the chancellor noted its contin uing jurisdiction during to correct deficiencies as to notice any pendency of the litigation.
The chancellor’s orders affirmed. are 200 J.,
Glaze,
concurs.
Justice,
concurring.
majority
I concur.
Glaze,
Tom
Rule
Whether ARCP
following question:
does not decide the
23,
rule,
illegal
in
exaction suit.
action
is
an
applicable
class
494,
Cash,
v.
277 Ark.
644
City
This
in
Little Rock
court
In
this
in the affirmative.
(1982),
question
answered
S.W.2d 229
Cash,
case,
holding in
we
that
part
a
should review
proper
However,
view,
not
because this issue was
reverse it.
my
trial,
with the
reluctance
agree
majority’s
at
I
fully developed
in this
decide
issue
important
appeal.
this
Here,
Rule 23
action
this case as a
appellee brought
that,
however,
this
argues
suit.
she
because
forcefully
On appeal,
suit,
of Rule 23 need not
is an
exaction
all the
illegal
requirements
16, 13,
be
out
Ark. Const.
the state’s
met. She
art.
points
§
no terms
illegal
self-executing
imposes
exaction
is
provision,
Edmonds,
it.
bring
or
a citizen to
In Price
upon
conditions
held one
(1959),
only
Ark.
Without this on a not unduly lengthening concurrence point decided, I of Rule 23 to suggest application illegal that the except exaction suits makes little sense that the notice require- ment afforded under 23 does assure notice to all taxpayers, Rule thus lawsuit” guarding against by the so-called filed “friendly parties their or vested interests attempting protect private what is involving an action interests. Such basically public’s notice, however, a law can be afforded well-drafted rule or without also all the under Rule requiring impediments presented 23. from the Clearly, illegal type exaction differs proceeding class action under Rule 23 where the contemplated primary objective is a suit for damages.
While there is much to on say subject, majority this *10 a case issue in of this important to defer its consideration correct on argued appeal. trial and at developed where it is properly K. LILLY Robert E. JOHNSON Sandra 823 S.W.2d 91-251 of Arkansas Court Supreme 3, 1992 February delivered Opinion [Rehearing denied March 1992.] Firm, P.A., D’Auteuil, The Cortinez Law Mark D. by: appellant. Renard,
Wendy for appellee. Robert H. Dudley, Justice. This court has accepted appellate jurisdiction of this case whether Act 870 of to decide 1991, which enlarges the statute of limitation for enforcement of child can be to revive a support obligations, retroactively applied claim that had been barred. We hold that the chancellor erred