Opinion ID: 3173000
Heading Depth: 1
Heading Rank: 1

Heading: Commonality, Predominance, and Superiority

Text: Lambert first takes issue with the circuit court’s findings on commonality and predominance. He claims that commonality is lacking because a fundamental analysis of the parties’ intent to form each contract is required on an individual basis in regard to both whether the rate of each contract was usurious and whether a deceptive trade practice occurred. Lambert further asserts that testimony as to each class member’s understanding of the terms of his or her respective contract will be required, thereby resulting in a lack of superiority. He submits that each class member’s claim is unique, requiring testimony and a unique analysis, which he asserts destroys both requirements of predominance and superiority. Likewise, he claims, commonality is destroyed because there is no common pattern to address each class member’s claim. The Harrises respond that Lambert engaged in a common course of conduct when he negotiated, processed, and financed all of his contracts in substantially the same manner, on 3 Cite as 2016 Ark. 24 substantially the same terms, for all members of the proposed class. They maintain that this common course of conduct gave rise to the repetitive, similar claims by each class member. The Harrises further contend that the common questions found by the circuit court predominate and that class certification is certainly the more efficient manner to handle the class members’ cases, thereby meeting the requirement of superiority. Rule 23 of the Arkansas Rules of Civil Procedure governs class actions and provides, in pertinent part: (a) Prerequisites to Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties and their counsel will fairly and adequately protect the interests of the class. (b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. At an early practicable time after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. For purposes of this subdivision, “practicable” means reasonably capable of being accomplished. An order under this section may be altered or amended at any time before the court enters final judgment. An order certifying a class action must define the class and the class claims, issues, or defenses. Ark. R. Civ. P. 23(a), (b). Our law is well settled that the six requirements for class-action certification are (1) numerosity, (2) commonality, (3) typicality, (4) adequacy, (5) predominance, and (6) superiority. See Campbell v. Asbury Auto., Inc., 2011 Ark. 157, 381 S.W.3d 21. This court will not reverse a circuit court’s ruling on class certification absent an 4 Cite as 2016 Ark. 24 abuse of discretion. See id. In reviewing a circuit court’s class-certification order, “this court focuses on the evidence in the record to determine whether it supports the trial court’s conclusion regarding certification.” Id. at 14–15, 381 S.W.3d at 33 (quoting Gen. Motors Corp. v. Bryant, 374 Ark. 38, 42, 285 S.W.3d 634, 638 (2008)). We have held that “neither the trial court nor the appellate court may delve into the merits of the underlying claim in determining whether the elements of Rule 23 have been satisfied.” Id. at 15, 381 S.W.3d at 33 (quoting Bryant, 374 Ark. at 42, 285 S.W.3d at 638). Our court has said on this point that “a trial court may not consider whether the plaintiffs will ultimately prevail, or even whether they have a cause of action.” Id. at 15, 381 S.W.3d at 33 (quoting Bryant, 374 Ark. at 42, 285 S.W.3d at 638). We therefore view the propriety of a class action as a procedural question. See id. Turning to Lambert’s contention that commonality is lacking, Rule 23(a)(2) requires the circuit court to make a determination that “there are questions of law or fact common to the class.” Ark. R. Civ. P. 23(a)(2). This court’s case law establishes that this requirement be case specific. See Johnson’s Sales Co. v. Harris, 370 Ark. 387, 260 S.W.3d 273 (2007). Rule 23(a)(2) does not require that all questions of law or fact be common; rather, the standard is that there need be only a single issue common to all members of the class. See id. Moreover, when the party opposing the class has engaged in some course of conduct that affects a group of persons and gives rise to a cause of action, one or more of the elements of that cause of action will be common to all of the persons affected. See id. Here, the circuit court found that Lambert used the same master contract containing similar contract language in his 5 Cite as 2016 Ark. 24 transactions with each member of the proposed class. Moreover, each member claims that, by using these contracts, Lambert charged interest in usurious amounts and, by doing so, engaged in deceptive trade practices. With respect to predominance, Rule 23(b) requires that “the questions of law or fact common to the members of the class predominate over any questions affecting only individual members.” Ark. R. Civ. P. 23(b). Predominance is a more stringent requirement than commonality. See GGNSC Arkadelphia, LLC v. Lamb, 2015 Ark. 253, 465 S.W.3d 826. We have explained that the starting point in examining the predominance issue is whether a common wrong has been alleged against the defendant. See id. If a case involves preliminary, common issues of liability and wrongdoing that affect all class members, the predominance requirement of Rule 23 is satisfied, even if the circuit court must subsequently determine individual damages issues in bifurcated proceedings. See id. Lambert, however, argues that individual questions exist, which are so pervasive in nature that they destroy commonality and predominance. We disagree. The mere fact that individual issues and defenses may be raised by Lambert regarding the recovery of individual members cannot defeat class certification when there are common questions concerning Lambert’s alleged wrongdoing that must be resolved for all class members. See Nat’l Cash, Inc. v. Loveless, 361 Ark. 112, 205 S.W.3d 127 (2005). The common issues regarding usury and deceptive trade practices can be addressed before individual issues are resolved. To that end, we cannot say that the circuit court abused its discretion in concluding that the commonality and predominance requirements were satisfied. 6 Cite as 2016 Ark. 24 The next question, then, is whether the requirement of superiority is lacking. This court has repeatedly held that the superiority requirement is satisfied if class certification is the more efficient way to handle the case, and it is fair to both sides. See FirstPlus Home Loan Owner 1997-1 v. Bryant, 372 Ark. 466, 277 S.W.3d 576 (2008). Real efficiency can be had if common, predominating questions of law or fact are first decided, with cases then splintering for the trial of individual issues, if necessary. See id. When a circuit court is determining whether class-action status is the superior method for adjudication of a matter, it may be necessary for the circuit court to evaluate the manageability of the class. See id. Lambert appears to take the position that there is no one set of operative facts common to all class members and superiority is therefore lacking. Yet, as already set forth, there are common issues presented in the instant case that predominate over any possible individual issues. In addition, attached to the circuit court’s order of certification is a chart of sixty-nine potential class members already identified by the Harrises. As we have previously observed when examining superiority, the avoidance of multiple suits lies at the heart of any class action. See Campbell, 2011 Ark. 157, 381 S.W.3d 21. And finally, we have held that proceeding as a class action is fair to both sides. See id. Based on the record before us, there was no abuse of discretion on the part of the circuit court in finding that the requirement of superiority had been met.