Opinion ID: 2175343
Heading Depth: 1
Heading Rank: 3

Heading: Must the class members and their causes of action be joinable under sec. 263.04 or sec. 260.10, Stats., before a class action may be maintained under sec. 260.12?

Text: Defendant argues that before a class action may be maintained, two separate requirements must be satisfied: First, the claims of members of the proposed class must be joinable under sec. 263.04 or sec. 260.10, Stats., and second, the case must meet the conditions contained in sec. 260.12, that the class members be numerous and that their claims present a question of common or general interest. Defendant asserts that since each class member has a separate cause of action and seeks separate relief, joinder would be improper under sec. 263.04, and that, therefore, no class action can be maintained. On the other hand, plaintiffs argue that ability to maintain a class action hinges solely on meeting the requirements of sec. 260.12, Stats. They admit that the individual monetary claims would not be properly joinable under sec. 263.04, and assert that additional qualification under sec. 263.04 is not only unnecessary, but contrary to the basic policy served by the class action doctrine: The avoidance of a multiplicity of suits that involve similar questions of law and fact but which are nevertheless not joinable under restrictive interpretations of joinder statutes.
At the outset it must be noted that the class members' claims could not be joined since the members assert separate causes of action that would not affect all the parties to the action. Viewed under the single occurrence test, [1] each class member has a separate cause of action. The complaint does allege the existence of only one group insurance program providing identical benefits (except as to amount of coverage) to each retired nonunion salaried employee. The complaint also alleges that defendant changed the program at the same time and in the same way with respect to all these retired employees. However, the complaint alleges that the benefits of the insurance program devolved upon these employees as part of their separate employment contracts. Thus, when defendant changed the program, in effect it allegedly breached 5,000 separate contracts thereby creating 5,000 similar, but nevertheless legally distinct, causes of action. Since each cause of action affects only one retired employee, the causes of action may not be joined. For similar reasons, the retired employees could not avail themselves of the party joinder provision [2] of sec. 260.10, Stats., which provides: All persons having an interest in the subject of the action or in obtaining the relief demanded may be joined as plaintiffs. There is no one subject of the action here. The retired employees do not seek to divide a common fund or determine ownership rights to property in which they all claim an interest. Nor do they have an interest in obtaining the relief demanded, since they each seek a separate damages recovery. [3]
Since neither the class members nor their claims may be joined under secs. 260.10 or 263.04, Stats., the issue is crucial whether compliance with these statutes is a necessary prerequisite to maintenance of a class action under sec. 260.12. We conclude that it is not. [4] In a long unbroken line of cases, this court has considered the propriety of maintenance of class actions only in terms of the criteria contained in sec. 260.12, Stats., never once even referring to secs. 263.04 or 260.10. [5] In each of these cases the class action was held proper. Pipkorn v. Brown Deer is the leading recent case on the subject. [6] After tracing the development of the class action doctrine from its origins in the old equity or chancery practice, this court upheld the right of a few beneficiaries of a water trust to defend an action affecting the trust assets on behalf of all similarly situated beneficiaries. The issue before the court was whether the amended complaint pleads a class suit on the part of defendants within sec. 260.12, Stats. [7] No question of joinder under secs. 263.04 or 260.11 (permissive joinder of defendants) was raised or decided. This court's treatment of class actions as governed only by sec. 260.12, Stats., is consistent with the familiar rule of statutory construction that where two statutes deal with the same subject matter, the more specific controls. [8] Here, secs. 263.04, 260.10, 260.11, and 260.12 all pertain to joinder of causes of action or parties. However, since sec. 260.12 on its face applies to particular actions involving numerous parties, class actions, its provisions govern rather than those of the other more general joinder statutes.
Unable to rely on any recent cases, defendant tries to garner support from several old cases and a treatise for its argument that compliance with joinder statutes is a prerequisite to maintaining a class action. 1. Pomeroy's treatise. Defendant quotes of a portion of sec. 289 of Pomeroy's treatise, Code Remedies, in which the author discusses the proper construction to be given the Field Code class action provision (sec. 260.12, Stats.) in light of the prior equity practice that Pipkorn indicated sec. 260.12 was designed to continue: [9] . . . The test would be to suppose an action in which all the numerous persons were actually made plaintiffs or defendants, and if it could be maintained in that form, then one might sue or be sued on behalf of the others; but if such an actual joinder would be improper, then the suit by or against one as a representative would be improper, notwithstanding the permission contained in this section of the statute. [10] Defendant assumes erroneously that the reference to joinder pertains to joinder under statutory joinder provisions. As Pomeroy makes clear, however, in other sections of Code Remedies, and in another treatise, Equity Jurisprudence, courts of equity followed very flexible joinder rules, and were not constrained by the more narrow legal rules. For example, in sec. 162 of Code Remedies he states: . . . The persons that can be made co-plaintiffs in an equity suit may be roughly separated into two general classes: (1) Those whose rights, claims, and interests, as against the defendant, are joint,not necessarily joint in the strict, technical sense of the common law, but in a broader and popular sense,that is, those whose interests, claims, and rights, whether legal or equitable, are concurrent, arising out of the same events, having the same general nature, and entitled to the same sort of relief. . . . (2) In the second class are found all those persons who are collaterally interested in the subject-matter of the controversy; whose interests and claims, although antagonistic to the defendant, and to that extent, therefore, in harmony with those of the real plaintiff, are still several and distinct in their nature, arising from different facts and circumstances, and demanding perhaps a different relief. [11] The first category mentioned by Pomeroy includes those plaintiffs who might have been joinable under permissive joinder statutes; the persons mentioned in the second category, however, clearly could not have been so joined. As Pomeroy further points out in Equity Jurisprudence, the need for a court of equity to take jurisdiction over a controversy involving a great many parties and causes of action was particularly strong where restrictive legal rules prohibited joinder, but where, despite these rules, the issues involved could be conveniently tried together. [12] Rigid adherence to the joinder rules would have defeated the very purpose for the assumption of equitable jurisdiction. [13] Thus, we conclude that defendant's reliance on Pomeroy is misplaced. 2. Cases requiring class members to be necessary parties. Defendant also argues that the 1865 decision of Barnes v. Beloit [14] requires this court to consider compliance with joinder statutes a prerequisite to maintenance of a class action. In Barnes, two plaintiffs sued on behalf of a class of landowners to restrain the sale of their property to satisfy allegedly illegal special assessments. The court held that no class action could be maintained unless the class members were necessary parties and, therefore, subject to compulsory joinder. This decision, even more restrictive than defendant's argument that permissive joinder statutes must be complied with, is typical of a number of older cases. [15] Linden Land Co. v. Milwaukee Electric Ry. & Light Co. [16] probably represents the high-water mark of this line of cases, and also goes the farthest in explaining their rationale. Plaintiffs sued on behalf of all persons owning land abutting on Milwaukee streets, to enjoin the city council from permitting the construction and operation of a street car system. The court held that since the landowners were proper ( i.e., subject to permissive joinder) but not necessary parties no class action could be maintained. The court's holding was basically grounded in the antiquated notion that the res judicata effects of a class action judgment could extend only to absent class members qualifying as necessary parties: . . . They may join in one action if they choose, but they are not compelled to; and it follows logically from this that, if they do not join, no one owner is bound by the result of another's separate action. The theory of the action, where one properly sues for all, is that the result is conclusive on all who are similarly situated and whom the plaintiff rightfully represents; and such must be the theory, or else the plaintiff does not represent all, and the statement that he does is not only false but absurd. It is palpably evident that the principle cannot apply to abutters, because, as said before, they may join or not, as they choose. If one can rightfully refuse to join, his rights manifestly cannot be litigated or determined in the action, and hence he cannot be bound by the result, and by no legal fiction can it be said that he has been represented in the action. [17] Whatever vitality it had in 1900, the court's view that class action judgments can bind only necessary parties has no validity today. As the United States Supreme Court indicated in Hansberry v. Lee [18] (cited with approval in Pipkorn v. Brown Deer ), [19] class members may be bound by the judgment where they participate in the litigation, where their interests are joint, or where they otherwise stand in legal privity, but also simply where they are in fact adequately represented by parties who are present. They need not be necessary parties, and actually regardless of the legal relationship of class members, courts should always carefully scrutinize the litigation to ensure that the representation by the named parties is in fact adequate. [20] Thus, since the restrictive theory of res judicata underlying these necessary party class action cases has been discredited, they should no longer be considered good law. In addition, viewed from an historical perspective, these cases represent only one of the two distinct branches of decisions that comprise the class action doctrine and should, therefore, not be viewed as the exclusive law on the subject. As Professor G. W. Foster has recently noted: The class suit emerged as an identifiable remedy during the seventeenth and eighteenth centuries out of two somewhat dissimilar lines of cases in equity which may be lumped approximately under the headings of `necessity' and of `convenience'. [21] Concerning class representation grounded on necessity Professor Foster writes: In the necessity cases, class representation was established as an exception to the broad equitable rule requiring joinder of all parties necessary to a just result in the case. . . . . . . The `class' or `representative' suit evolved as a device for excusing the joinder of `necessary' parties by permitting the parties before the court to represent absentees whose joinder would have been impossible or might have imposed undue burdens because of the sheer numbers involved. [22] Concerning class representation grounded on convenience, Professor Foster comments: The other line of equity cases centered not on the necessity for joining parties but the convenience and sometimesas in the case of the Bill of Peacethe justice of avoiding repetitious litigation by permitting one suit to resolve questions common to many suits. [23] Finally, as plaintiffs point out, these necessary party class action cases can be distinguished on the ground that they involve actions to enjoin local governments from collecting tax, [24] a type of litigation discouraged by courts, even in the absence of a class action. [25] Since the case at bar is a private action for damages, the necessary party cases should arguably have no applicability. 3. Cases dismissing causes of action for misjoinder. Defendant last relies on the cases of Hawarden v. Youghiogheny & Lehigh Coal Co. [26] and Tyre v. Krug [27] where this court severed and dismissed for misjoinder causes of action for damages in class actions seeking injunctive relief. Defendant contends that these cases mean that joinder statutes must be complied with before a class action may be maintained. This contention may be disposed of quickly. In both Hawarden and Tyre a single plaintiff sought injunctive relief for each member of a class, but damages only for himself. Dismissal of the damages action for misjoinder was proper, since it was not even purported to be a class action. The court was not presented with, nor did it rule on, a question as to the propriety of a class action where damages were sought by each member of the class. We conclude that ability to maintain a class action hinges solely upon meeting the criteria of sec. 260.12, Stats., and not those of any other joinder statutes.