IN THE SUPREME COURT OF IOWA

No. 14–0691

Filed January 22, 2016

Amended April 5, 2016

DARLA LEGG and JASON T. LEGG, on Behalf of Themselves and All 

Persons Similarly Situated,

Appellees,

vs.

WEST BANK,

Appellant.

_______________________________________________________________________

Appeal from the Iowa District Court for Polk County, Bradley 

McCall, Judge.

Defendant moves for interlocutory appeal from a district court 

ruling certifying class action status. DECISION OF DISTRICT COURT 

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

Wade R. Hauser III, Jason M. Craig, Lindsay A. Vaught, and 

Michael J. Streit of Ahlers & Cooney, P.C., Des Moines, for appellant.

Ann E. Brown-Graff, Brad J. Brady, and Matthew L. Preston of 

Brady Preston Brown PC, Cedar Rapids, for appellees.
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ZAGER, Justice.

In this interlocutory appeal, we are asked to determine whether the 

district court properly certified a class action based on the plaintiffs’ 

usury and sequencing claims involving one-time nonsufficient fund (NSF) 

fees charged by the bank. This case is a companion case to another 

opinion we file today, Legg v. West Bank, 873 N.W.2d 763, 765 (Iowa 

2016). Because we concluded in that case that the district court erred in 

denying the bank’s motions for summary judgment except as to the 

good-faith claim involving the sequencing of overdrafts, we likewise find 

that the district court erred in certifying the class action on all claims 

except for the good-faith claim based on sequencing.

I. Background Facts and Proceedings.

Because the background facts and proceedings are the same in 

both cases, we incorporate them here by reference.

II. Standard of Review.

“Our review of the district court’s ruling granting or denying 

certification of a class action is limited because the district court enjoys 

broad discretion in the certification of class action lawsuits.” Vos v. Farm 

Bureau Life Ins. Co., 667 N.W.2d 36, 44 (Iowa 2003). We reverse a 

district court’s ruling granting certification only if we find the decision 

was based upon an abuse of discretion. Kragnes v. City of Des Moines, 

810 N.W.2d 492, 498 (Iowa 2012). An abuse of discretion is found only 

when the district court’s grounds for certifying a class action are clearly 

unreasonable. Anderson Contracting, Inc. v. DSM Copolymers, Inc., 776 

N.W.2d 846, 848 (Iowa 2009). “Our class-action rules are remedial in 

nature and should be liberally construed to favor the maintenance of 
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class actions.” Id. (quoting Comes v. Microsoft Corp., 696 N.W.2d 318, 

320 (Iowa 2005)).

III. Class Action Status.

West Bank challenged the district court’s certification of class 

action status on both the usury and sequencing subclasses. It raised 

challenges to class action status under both the Iowa Consumer Credit 

Code (ICCC) and the Iowa Rules of Civil Procedure. One of the challenges 

West Bank made to the usury subclass arose under Iowa Code section 

537.5201 (2009), part of the ICCC. Because we found in the companion 

case that the usury claims could not proceed under the ICCC, we 

likewise choose not to address the arguments against class action status 

that arise under the ICCC in this opinion.

Iowa Rules of Civil Procedure 1.261 and 1.262 govern the 

commencement of a class action and the certification of a class. Rule 

1.261 provides that:

One or more members of a class may sue or be sued as 

representative parties on behalf of all in a class action if both 

of the following occur:

1.261(1) The class is so numerous or so constituted 

that joinder of all members, whether or not otherwise 

required or permitted, is impracticable.

1.261(2) There is a question of law or fact common to 

the class.

Iowa R. Civ. P. 1.261.

Our rules require the class to be “either so numerous or 

constituted in such a way that joinder is impracticable and there is a 

question of law or fact common to the class.” Anderson Contracting, 776 

N.W.2d at 848. We have “adopted the general rule . . . that if the class is 
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large, numbers alone are dispositive to show impracticability.” City of 

Dubuque v. Iowa Trust, 519 N.W.2d 786, 792 (Iowa 1994). A class with 

forty or more members is within the range where impracticability is 

presumed. Id. As noted by the district court in its ruling, West Bank 

has conceded numerosity is satisfied.

The second prong under rule 1.261 requires a “question of law or 

fact common to the class,” sometimes referred to as “predominance.” 

Iowa R. Civ. P. 1.261. Predominance or commonality asks whether the 

class members have common issues that predominate over individual 

issues. Anderson Contracting, 776 N.W.2d at 852. The test for 

predominance or commonality

is a pragmatic one, which is in keeping with the basic 

objectives of the [class action rule]. When common 

questions represent a significant aspect of the case and they 

can be resolved for all members of the class in a single 

adjudication, there is a clear justification for handling the 

dispute on a representative rather than an individual basis. . 

. . [C]ourts have held that a [class action] can be brought . . . 

even though there is not a complete identity of facts relating 

to all class members, as long as a “common nucleus of 

operative facts” is present. . . .

The common questions need not be dispositive of the 

entire action. In other words, “predominate” should not be 

automatically equated with “determinative” or “significant.” 

Therefore, when one or more of the central issues in the 

action are common to the class and can be said to 

predominate, the [class] action will be considered proper . . . .

Typically, this situation arises in antitrust or securities fraud 

cases. . . . [I]n these actions the courts generally hold that if 

defendant’s activities present a “common course of conduct” 

so that the issue of statutory liability is common to the 

class, the fact that damages . . . may vary for each party 

does not require that the class action be terminated.

Luttenegger v. Conseco Fin. Servicing Corp., 671 N.W.2d 425, 437 (Iowa 

2003) (emphasis omitted) (quoting 7AA Charles Alan Wright, Arthur R. 
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Miller, & Mary Kay Kane, Federal Practice and Procedure § 1778, at 121–

25 (2d ed. 1986) (footnotes omitted)).

The Leggs argue the sequencing subclass has overarching issues of 

law that are identical. The sequencing subclass has questions of law 

regarding high-to-low sequencing and whether the sequencing resulted 

in unjust enrichment or violated an implied or express duty of good faith. 

The Leggs further assert that West Bank’s finance charges and 

sequencing protocol were identical for all customers during the same 

time period. Because we conclude that the district court erred in 

denying the bank’s motion for summary judgment on the unjust 

enrichment claims, we only address the good-faith claims based on 

sequencing. We conclude that the district court did not abuse its 

discretion in finding commonality was met for the good-faith sequencing 

subclass.

West Bank argued that individual issues would predominate 

because the plaintiffs would have to prove the date of the overdraft, the 

amount of the overdraft, the amount of the NSF fee, and the date on 

which the NSF fee was paid for each class member. Therefore, West 

Bank claims ascertaining the damage claims of each individual class 

member would be onerous and make management of the claims as a 

class action impossible. This court has previously held that the mere 

fact that there may be damage issues unique to different class members 

does not preclude class certification where there are common issues of 

liability. See, e.g., Vignaroli v. Blue Cross of Iowa, 360 N.W.2d 741, 745 

(Iowa 1985). We conclude common issues predominate in the case at bar

because the members of the sequencing subclass share common issues 

of liability with regard to high-to-low sequencing. We find no abuse of 
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discretion by the district court in finding that the commonality 

requirement was met.

Once the requirements of rule 1.261 are met, rule 1.262 covers the 

certification of class actions:

The court may certify an action as a class action if it finds all 

of the following:

a. The requirements of rule 1.261 have been satisfied.

b. A class action should be permitted for the fair and 

efficient adjudication of the controversy.

c. The representative parties fairly and adequately will 

protect the interests of the class.

Iowa R. Civ. P. 1.262(2). As discussed above, the requirements of rule 

1.261 have been met. We now turn to a discussion of the other two 

sections.

“Rule 1.263(1) sets forth a number of factors that the district court 

is to consider and weigh in determining whether the prerequisite of rule 

1.262(2)(b) . . . has been met.” Luttenegger, 671 N.W.2d at 437. The 

relevant factors are:

a. Whether a joint or common interest exists among 

members of the class.

b. Whether the prosecution of separate actions by or 

against individual members of the class would create a risk 

of inconsistent or varying adjudications with respect to 

individual members of the class that would establish 

incompatible standards of conduct for a party opposing the 

class.

c. Whether adjudications with respect to individual 

members of the class as a practical matter would be 

dispositive of the interests of other members not parties to 

the adjudication or substantially impair or impede their 

ability to protect their interests.
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d. Whether a party opposing the class has acted or 

refused to act on grounds generally applicable to the class, 

thereby making final injunctive relief or corresponding 

declaratory relief appropriate with respect to the class as a

whole.

e. Whether common questions of law or fact 

predominate over any questions affecting only individual 

members.

f. Whether other means of adjudicating the claims and 

defenses are impracticable or inefficient.

g. Whether a class action offers the most appropriate 

means of adjudicating the claims and defenses.

h. Whether members who are not representative 

parties have a substantial interest in individually controlling 

the prosecution or defense of separate actions.

i. Whether the class action involves a claim that is or 

has been the subject of a class action, a government action, 

or other proceeding.

j. Whether it is desirable to bring the class action in 

another forum.

k. Whether management of the class action poses 

unusual difficulties.

l. Whether any conflict of laws issues involved pose 

unusual difficulties.

m. Whether the claims of individual class members 

are insufficient in the amounts or interests involved, in view 

of the complexities of the issues and the expenses of the 

litigation, to afford significant relief to the members of the 

class.

Iowa R. Civ. P. 1.263(1)(a)–(m).

Courts are allowed to “give appropriate weight” to the factors. Id.

r. 1.263(1). No specific weight is to be given to any one factor; rather, the 

trial court has broad discretion in weighing the above-listed factors.

Vignaroli, 360 N.W.2d at 744. The district court concluded that a class 
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action would permit a “fair and efficient adjudication of the controversy.” 

In Kragnes, this court noted:

The litigation of this case has resulted in two Supreme 

Court opinions, a forty-nine page district court decision after 

a fourteen-day bench trial involving the testimony of twentyeight witnesses, including eight experts—three for the City 

and five for Kragnes. The record fills five bankers’ boxes. 

However, Kragnes’s claim standing alone would likely fall 

within the jurisdictional limit of the small claims court. We 

think this case demonstrates the very necessity and 

importance of class action litigation both for the plaintiffs 

and for the City. The likelihood of a plaintiff bringing such a 

complex suit requiring substantial resources to litigate in 

small claims is highly unlikely. And if she, and scores of 

thousands of others like her, did bring their claims 

individually, it could easily overwhelm the legal department 

of the City and the resources of the Polk County district 

court, and would likely result in inconsistent adjudications.

Kragnes, 810 N.W.2d at 503. Similarly, the district court found in regard 

to West Bank that “West Bank’s claim that individual customers have 

adequate remedies to pursue their claims without the benefit of class 

representation is undermined by the zealous nature with which West 

Bank has defended this action, including three summary judgment 

motions and an interlocutory appeal to the Iowa Supreme Court.” 

This supports subsection (m) of the pertinent rule. See Iowa R. 

Civ. P. 1.263(1)(m) (“Whether the claims of individual class members are 

insufficient in the amounts or interests involved, in view of the 

complexities of the issues and the expenses of the litigation, to afford 

significant relief to the members of the class.”). It also supports 

subsection (b) of the same rule. Id. r. 1.263(1)(b) (“Whether the 

prosecution of separate actions by or against individual members of the 

class would create a risk of inconsistent or varying adjudications with 

respect to individual members of the class.”). The district court also 
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addressed at length subsection (e), concluding that common questions of 

law predominate over any individual claims. Id. r. 1.263(1)(e) (“Whether 

common questions of law or fact predominate over any questions 

affecting only individual members.”). The district court did not abuse its 

discretion in finding that certification on the good-faith sequencing claim

was “permitted for the fair and efficient adjudication of the controversy.” 

Id. r. 1.262(2)(b).

The last question is whether the class representatives “fairly and 

adequately will protect the interests of the class.” Id. r. 1.262(2)(c). Rule 

1.263(2) lists factors for courts to consider in determining whether the 

class representatives will fairly and adequately protect the interests of 

the class:

a. The attorney for the representative parties will 

adequately represent the interests of the class.

b. The representative parties do not have a conflict of 

interest in the maintenance of the class action.

c. The representative parties have or can acquire 

adequate financial resources, considering rule 1.276, to 

ensure that the interests of the class will not be harmed.

Id. r. 1.263(2). The district court determined that all of these factors 

were met.

West Bank argues that the Leggs are not adequate representatives 

and that they have a conflict of interest because they are no longer 

customers of West Bank. The district court found that the Leggs were 

suitable representatives for the class action because they have “a 

personal interest in the litigation and have alleged that they were 

injuriously affected by the actions of West Bank.” The court found that 
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their injuries were sufficiently tied to the claims being asserted by the 

class. 

When a court denies a class certification based on a representative 

being inadequate, “there are usually special circumstances or a 

combination of factors involved.” Stone v. Pirelli Armstrong Tire Corp., 

497 N.W.2d 843, 847 (Iowa 1993). Though not an exhaustive list, special 

circumstances this court has found in the past include when other 

members of the class lack confidence in the representative and when the 

representatives lack credibility. Id. The district court did not find, nor 

did West Bank advance, any special circumstances that would make the 

Leggs inadequate as representatives. The district court did not abuse its 

discretion in finding that this prong was met.

The district court also found that the attorneys for the Leggs would 

adequately represent the class. The district court found that the record 

before it 

reflects that the attorneys for the Plaintiffs are skilled, 

competent, and well qualified to represent the interests of 

the class. At oral argument they expressed an ongoing 

willingness to advance the costs necessary to pursue the 

claims of the class.

There is nothing in the record to suggest this is not true. The district 

court did not abuse its discretion in determining that the attorneys for 

the Leggs could adequately represent the class on the good-faith 

sequencing claim.

IV. Conclusion.

We conclude that the district court did not abuse its discretion in 

granting the Motion for Certification of Class Action filed in this matter. 

However, based on our opinion in Legg v. West Bank, 873 N.W.2d 763
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(Iowa 2016), the class action certification will only apply to the good-faith 

sequencing claim. Therefore, the class shall be as follows:

Sequencing Class: All West Bank customers who were 

charged additional NSF fees between July 1, 2006, and 

September 30, 2010, as a result of West Bank changing the 

sequencing order for Bank Card Transactions from low-tohigh sequencing to high-to-low sequencing on July 1, 2006.

DECISION OF DISTRICT COURT AFFIRMED IN PART, 

REVERSED IN PART, AND REMANDED.