*1 WORTH, ROGERS, Clarence et al. CITY of et al. J. 01-1048 89 S.W.3d Court Arkansas
Supreme delivered November Opinion *4 P.A., The Law Firm, Evans; Evans Marshall Dale by:’ Hirsch Firm, P.A., Hirsch, Law E. Kent for by: appellants.
Matthews, Rhoads, McClure, Campbell, & Thompson Fryauf, P.A., Matthews; Green; Clark; David R. by: Robin & Clark Jim for Spence,by: GeorgeSpence, appellees. This is an action to Article pursuant Hannah,
Jim Justice. 13, of Section the Arkansas Constitution to protect inhabitants of Benton County, City School Rogers, Rogers District No. Bentonville School District No. and Siloam School District No. 21 from the Springs enforcement of an illegal Worth, ah, exaction. Clarence et an order of Appellants appeal J. class under certification Ark. R. P.—Civ. App. 2(a)(9). Appel- lants that trial court erred allege citizens to permitting class, out from the that the trial court erred in failing prohibit and class, communication solicitation that the trial court erred in for motion recusal. The denying Appellees agree that the of Rule 23 are not opt-out provisions to the applicable seek, relief which injunctive is the “roll back” Appellants of mil- rates for ad valorem lage tax. The relief Appellees allege a refund sought by of ad valoremtaxes to Appellants requesting *5 in the amount taxpayers the noted overcharged units by taxing should be to out allowed under Rule 23. subject opt Appellees trial erred in attorneys the court restricting asserting
cross-appeal, out the class. of from statements about opting making public 13, 16, that, of the Article Section under terms of We hold Constitution, suit to an the the Arkansas parties town affected of the by include all citizens city, county, to the constitu- all citizens are exaction. Because parties illegal class, Ark. out as under to developed created tionally 23, We not in an suit. R. Civ. P. applicable the affected citizens must further that communication with hold exaction be unfettered to determine whether any alleged illegal therefore, not to suit have been voluntarily subject may paid, 16, 13. under Article Section the denial of their motion also to
Appellants attempt appeal an before from to recuse. The us is an interlocutory appeal appeal classas allowed under Ark. R. order a motion a granting certify The the denial of motion to issue of 2(a)(9). P.—Civ. App. In recuse not be heard on this interlocutory any appeal. event, the here the issue of recusal is the issue is moot because Mandamus, alternative, or in of a Petition for Writ of subject Prohibition, Writ before this for which is pending presently court.
Facts 1997, 25, On filed a lawsuit in Benton April Appellants units, Benton City County taxing including County, alleging District School District No. Siloam School Rogers, Rogers No. and Bentonville School District No. were required make for “roll rates for ad valorem calculations back” of millage Constitution, taxes Amendment 59 of the Arkansas and that under had done so. On filed a May Appellants separate had action that the noted units not “rolled back” taxing alleging after rates for ad valoremtaxes a millage required countywide suits dated These two were consolidated an order reappraisal. filed motion to dismiss the consoli- 1998. January Appellees action, dated which was treated as a motion for summary judg- ment. The motion was This court reversed that decision granted. and remanded the case for further v. Worth City proceedings
189
Thereafter,
341 Ark.
Appellants the trial court deter- requesting mine so, if a “roll back” is and if required, are Appellants that the trial court order requesting a refund of ad valoremtaxes to in the amount taxpayers units, the noted overcharged by taxing cost, less and a reasonable and expenses, fee as adequate attorney’s determined the trial court. 22, 2001, On the trial court entered a class certification June
order. It an members, choice provides to the class opt-out as set out in a Notice attached to the certification order. It also prohib- its counsel for the from Appellees class members contacting making statements about public out and not opting out. opting
Standard Review
This court reviews class certification under an abuse-
of-discretion standard.
v.
322
Cheqnet
Ark.
Montgomery,
911
S.W.2d 956
An
abuse of discretion can be shown by
bias or
proving
Scott,
prejudice.
v.
Massongill
Ark.
County of
281,
S.W.2d 509 (1996). Outs
Opt
that the trial
Appellants
court erred in
allege
allowing
outs. We hold that in
opt
case,
an illegal-exaction
taxpayers may
out of the suit. The
opt
out as
right
under
opt
developed
Rule 23 does not
apply
suits. Under
Ark. R.
Civ. P.
classmembers
out of a class
action if
are
they
not satisfied with the
or remedies asserted.
complaint
USA Check
Rock,
Cashers
Island,
Little
Inc. v.
GreyhoundLeasing
If,
a forum state wishes
in a classaction created under Rule
*7
a claim for money
of an absent
concerning
bind the
plaintiff
rights
law,
minimal
at
the State must
or similar relief
provide
damages
includes,
least,
at the
that an absent
due
which
process,
procedural
or herself
an
to remove himself
be provided
opportunity
plaintiff
and
an
out”
from the class
returning
“opt
“request
by executing
Shutts,
v.
form to the court.
PetroleumCo.
for exclusion”
Phillips
Rule 23 creates a suit involving
claims,
claims, and the class-action suit
of
often small
many
prised
such
created to avoid the
such claims
problems
typically present,
wholesale
numerous
as
involving
joinders,
procedural complexities
intervention,
be inef
and
numbers of lawsuits which would
large
Pearson,
Ark.
ficient and
BNL
340
unmanageable.
Equity Corp.
351,
court further noted in BNL
However, an case is a class illegal-exaction although action, under Rule 23. It is cre it is not a classaction established 16, 13, Article Section of the Arkansas ated our Constitution. by Constitution provides: citizen of or town institute suit
Any any county, city interested, and all the inhabi- protect behalf of himself others exactions any tants thereof the enforcement of against illegal whatever.
191
16,
Art.
13.
law makes an illegal-
Ark. Const.
Our common
§
of the Arkansas Consti-
exaction suit under Article
Section
Barker, 341 Ark.
a class action as a matter of law. Frank v.
tution
Cash,
Ark.
Little Rock v.
(2000);
20 S.W.3d
City claim is
its
An
(1982).
S.W.2d
illegal-exaction
Villines,
Hamilton v.
nature in
form of a classaction.
tutionally taxpayers, brought benefit of all taxpayers.
Unlike a class action created under Rule
an
a number
suit does not bind
claims of
together
in order to more
the claims. Because
persons
effectively litigate
issue,
individual claims that
be
are not at
might
compromised
concerns about
are not
outs
A
allowing opt
present.
taxpayer
*8
filed,
either
in the
suit
dr in no
participates
illegal-exaction
already
lawsuit on the
exaction.
the terms of the Arkansas Con
illegal
By
stitution,
13,
Article
Section
inhabitant of the area
every
affected
exaction is a member
the class.
of
by
alleged illegal
citizen who
an inhabitant
the affected
is
area is
Every
regarded
a
to the
and
as
lawsuit
is bound
party
illegal-exaction
by
judg
Cash,
ment.
Dist. No.
Ruraldale Consol. Sch.
supra; Rigsby
180 Ark.
As this court stated in
(1929).
S.W.2d
Farrar,
McCarroll v.
199 Ark.
An out to 23 is not in an Rule opt pursuant possible each lawsuit. The Arkansas Constitution makes illegal-exaction a in an is What is at issue case taxpayer party. illegal-exaction whether the violated Article Section 13. governmental entity case, hand, a On the other what is at issue in class-action typical action, such as a tort class is the of the various members of rights lawsuit, the class the defendant. Under an against illegal-exaction All the reasons for Rule 23 outs are not allowing opt present. exaction are as a matter of law. Whatever illegal taxpayers parties and amount be at issue will has occurred whatever of money may to be unaffected a decision of a citizen to or not participate in the suit. The exaction is either ille- participate Thus, or it not. while desire not to in the gal, participate typical suit, tort classaction will a classmember from such a it will except not one from a suit based exaction. Nor will except upon illegal the desire to retain counsel to obtain a better outcome separate out, for an allow out. If citizens were able to would opt they because, not be able to their suits as dis- prosecute individually above, cussed would be res precluded by judicata.
A suit exaction An Rule 23. illegal long predates suit is one for benefit of brought “necessarily all . . . and as well be in the name taxpayers might prosecuted Moore, one as of another.” Laman v. [taxpayer] Laman, S.W.2d 971 In Laman was granted permission Laman, intervene and be added as a The plaintiff. supra. original that the for plaintiff objected, arguing only proper proceeding Laman was for him to and action. bring separate independent Id. This court stated:
The objection was should have been overruled. The suit was a resident brought by taxpayer prevent unlawful alleged and, expenditure funds to the belonging city, by including another resident and of the as a taxpayer city did party plaintiff, the nature or of the change purpose suit. The suit as origi- nally was for the benefit of brought necessarily all of the taxpayers . . city.
Laman,
Any judgment benefit of all As noted a taxpayers. who previously, person opted out in an suit would have no illegal-exaction to right proceed alone because he or she would be foreclosed res What judicata. occurred, is at issue is whether an exaction not whether a illegal citizen has been What is in given an wronged. sought illegal- exaction case is return of taxes collected. Relief wrongfully may be an order that the Cash, taxes be refunded. A supra. personal Id.; also, Laman, is not entered. see there judgment While supra. lawsuit, is no to in out an it is well settled illegal-exaction that of taxes cannot be recovered in voluntary an payment illegal- 588, 12 340 Ark. S.W.3d Elzea v. exaction suit. Perry, (2000). 13, 16, our is self- Section of Constitution
Article
or
no
act
legislation
enabling
supplemental
executing
requires
344 Ark.
effective.
v.
to make its
Chapman Bevilacqua,
provisions
724,
v.
207 Ark.
378 (2001);
Grady,
S.W.3d
Samples
13 is self-
Even
Article
Section
S.W.2d 875 (1944).
though
has stated that the
may regulate
this court
legislature
executing,
as the constitutional
in
cases so long
illegal-exaction
procedure
13, are not
in Article
Section
abridged.
set out
guarantees
Weiss,
Cash,
Rule 23
act as a
illegal-
may
procedural guide
Notice is
in an
exaction cases as to notice.
illegal-exac
required
suit,
at
is
In an
what
is first
issue
tion suit.
exaction
an
exaction has occurred. If an
whether
illegal
illegal
found,
then determine whether the taxes were
the trial court must
It
whether
were
collected under
voluntarily paid.
protest
an ille
taxes are not
is settled law
voluntarily
subject
paid
Faucher,
Communication Both the and the assert error in Appellants Appellees the trial court’s decision contact with the classmembers. regarding noted, As while an already lawsuit has some attrib utes make Rule 23 type procedure helpful managing case, it not a is classaction. Because there typical is no out, the concerns about communication are not Com present. munication. in an case will not affect numerosity, or superiority, because the typicality1, issue is not adequacy, whether similar, such, individual claims are and as be they may considered claim, There but one together. which is whether the tax constitutes an exaction. Because we follow the illegal com mon-law rule taxes, prohibiting recovery voluntarily paid contact with citizens should occur to determine whether the taxes were paid The concern involuntarily is whether voluntarily. coercion is used. being also the denial
Appellants of their attempt appeal motion to recuse. The before us is an appeal interlocutory appeal from an order a motion to a classas granting allowed under certify are illegal- not considered in an Numerosity, superiority, typicality, adequacy go exaction suit. Those issues to the of whether a class can be certified. In an question illegal-exaction suit, the suit is a class action as a matter of law. Frank, supra. *11 Ark. R. In P.—Civ. an from an order 2(a)(9). App. grant- appeal class, a for motion certification as a issues be ing that only may considered on are those issues whether the appeal regarding judge abused her his or discretion in the class Ark. under R. certifying #14, Civ. P. 23. Ark. State Educ. Bd. V. Sch. Dist. Magnolia Of S.W.2d The issue of the denial of motion recuse not be on heard this interlocutory appeal.
We reverse and remand the case to the trial further court for action consistent with this on issues how the classwill opinion be handled. in
Affirmed and reversed in part part. and Imber, JJ., concurring. Glaze Imber, Justice, concurring.
Clinton I Annabelle with the conclusions but write agree majority’s sepa- because this rately case us with the presents opportunity clarify to what extent the notice a Rule serve as rule 23(c) provisions in an lawsuit. Rule procedure in 23(c) provides pertinent part:
(c) Notice. In class action in which relief any monetary restitution, for and sought, including actions the court damages shall direct to the members of the best notice class practicable circumstances, under all individual notice to mem- including bers who can be identified notice through reasonable effort. The it; (1) shall: describe the action and the members’ rights (2) each advise member that the court will exclude the member from date; if the the class member so (3) advise requests by specified not, each member that the whether favorable will judgment, or exclusion; all include (4) members who do not state request any member does who exclusion if the request may, desires, member in the participate either in litigation, person counsel. through
Ark. P. R. Civ. 23(c) (2002). in It and Members’ Describe the Action Rights Notice Shall
(1) in an The first of notice applies requirement of the nature members should be notified lawsuit because all class in it. This does not of the action and their change simply rights 13 of the virtue of Article section because the class arises by *12 Arkansas Constitution. Will Exclude Notice Advise Each Member That the Court Shall
(2)
the
the Member So
the Member
Class
Requests
If
from
Date
aby Specified
does not
to an
The second
directly apply
illegal-
requirement
that
lawsuit. The
concludes
exaction
majority correctly
taxpayers
However,
this court
cannot
out of an
suit.
illegal-exaction
opt
rule,
i.e.
the common-law
voluntary-payment
recognizes
one
on demand that is not
enforcea-
money
legally
pays
“[w]hen
duress,
ble,
fraud,
mis-
the
is deemed
Absent
voluntary.
payment
coercion,
extortion,
fact,
cannot be
take of
voluntary payments
Inc.,
Co.,
v.
Ark.
recovered.”
Adams
Douglas
Trucking
We have
46 S.W.3d
consistently applied
exaction:
the
rule to cases of illegal
voluntary-payment
the
[voluntary-
The
common-law
reasoning underlying
budget annually
rule is that
entities
governmental
payment]
revenues within each tax
When
ordinarily
year.
gov-
spend
that it
be
to refund those
ernment
is on notice
required
taxes, it can make allowance for a
refund. See Mertz v.
possible
Hercules,
(1995)
320 Ark.
Oxford case, law- In the instant or in case of an any illegal-exaction suit, declare that he or has the taxes in can she taxpayer paid and waives to a refund. Because voluntarily any right question unit is not to refund taxes voluntarily paid, taxing required have been due to the would not be refund would taxpayer the event that the included in the common fund in plaintiffs pre- Therefore, in the action. while it would be incorrect to tell a vail lawsuit, that he or she can out of an it taxpayer opt illegal-exaction would be inform a of the to waive a proper taxpayer right refund. Advise Each That Shall Member Whether
(3) Judgment, Notice Not, IncludeAll Favorableor Will Members Who
Do Not Exclusion Request The third of notice to an requirement applies lawsuit, the reference to all members “who do not although exclusion” irrelevant. As has been mentioned in request already connection with Rule there is no out of an 23(c)(2), Thus, suit. the notice Rule 23(c)(2) required must advise each member that the will include all mem- judgment class, words, bers none of whom out. In other all may opt *13 class members have to know that the action will be bind- right on them. This is even more in an ing important iEegal-exaction because, out, case as the classmembers would majority points be foreclosed the doctrine of res from individual judicata filing suits later to assert their for the same exaction. rights aEeged iEegal Notice That Shall State Member Who Does Not
(4) Any Request Desires, Exclusion the Member in the May, Participate Litigation, If Either Person Counsel Through The fourth notice also to an requirement applies iEegal-exac- tion lawsuit because the need to classmembers be informed of the to intervene and in the if conclude litigation participate their are not the named class rights being adequately protected by or class counsel. Once reference to representatives again, any member “who exclusion” irrelevant in the does request context of an case. iEegal-exaction in this J., joins opinion.
Glaze,