Opinion ID: 1909099
Heading Depth: 1
Heading Rank: 1

Heading: A. The Wallace Action

Text: On November 12, 1996, Larry Wallace filed a complaint containing class allegations (the Wallace Action) in the Circuit Court of St. Clair County, against the Water Works and Sewer Board of the City of Birmingham, and the Board's directors (collectively, the Birmingham Water Works Board). The complaint was filed on behalf of the customers of the Birmingham Water Works Board. The complaint alleged that certain disbursements of public funds held by the Birmingham Water Works Board were not expressly authorized by law and that these disbursements had wrongfully inflated customers' water bills. Specifically, the complaint alleged conversion, fraudulent suppression, and breach of fiduciary duty. The complaint sought monetary relief in the form of restitution, compensatory damages, and punitive damages, and it sought equitable relief in the form of an accounting and an injunction to eliminate similar illegal expenditures in the future. On April 18, 1997, the St. Clair Circuit Court held the first of two hearings concerning the certification of the class. On July 11, at the second hearing, the Birmingham Water Works Board argued that this action was not appropriate for class certification because, it asserted, it would have compulsory counterclaims against thousands of the class members for nonpayment of their water and sewer bills. On September 15, the trial court entered a three-page order certifying the class as a Rule 23(b)(3), Ala. R. Civ. P., class that includes all rate payers of the Water Works Board of the City of Birmingham for the period beginning January 1, 1993 up through and inclusive of the date of this order. The trial court further stated in its order that the Birmingham Water Works Board could not file counterclaims against the class members alleging nonpayment of the water and sewer bills because, it held, the counterclaims were permissive counterclaims, and because the counterclaims would engender confusion and disruption in the administration of the class action.