Opinion ID: 2539162
Heading Depth: 2
Heading Rank: 2

Heading: Class Certification for Subclass C

Text: The circuit judge found, based on the same findings and conclusions discussed earlier with respect to Subclass A, that all of the Rule 23(a) requirements were satisfied for Subclass C. [9] She found, however, that the Rule 23(b) criteria of predominance and superiority were not satisfied due to the tort claims brought. We agree.
With respect to Subclass C, the circuit judge made similar findings regarding predominance that were made for Subclass A. She specifically found that the apartments were red-tagged, the gas was disconnected from August 10 to August 14, air conditioning and heating units were disabled until December 12, and the apartments were constructed from the same basic building plans. The judge added these findings with respect to exposure: g. Each member of the class claims their respective exposure to carbon monoxide was a result of a faulty design of the mechanical closet where the heating ventilation and air conditioning (HVAC) for each apartment was located. h. There are cross-claims between certain defendants that must be adjudicated. These must be fully adjudicated in order to determine the liability, causation, and damages as they relate to the class members. i. [sic] Simpson Solutions, Simpson Partnership, Deer Run, Fox Run, Affordable, Pinnacle, and Hardcastle have filed cross-claims against all other defendants. a. AWG has filed a cross-claim against all other defendants; and b. L & L has filed a cross-claim against all other defendants. i. The alleged common questions of design defect does not address every alleged exposure. Some Defendants allege that some of the alleged wrongful exposure may have been caused by operations, maintenance, tenant behavior, or using the HVAC closets for storage. j. The alleged wrongful exposure happened at different times and/or different levels with regard to individual class members. k. Defendants claim damages are diverse among class members. Class members' lifestyles affected their exposure such as whether or not they smoke, their past medical histories, what appliances they used and how often, and how much they used the HVAC units. The judge also found that [t]he tort of outrage is intensely individualized and is not easily determined by a class action suit. While it is possible to bring outrage as a class action, the court finds that in this case, with this many defendants, the elements of outrage are highly individual and predominate over any common claim of Subclass C. With respect to the other tort claims, the judge held that [t]he common issues to Subclass C such as whether there was exposure do not predominate over the issues of proximate cause, comparative fault, notice, maintenance, and damages of individual class members. The cross-appellants urge that the circuit judge erred in finding that the predominance requirement was not met with respect to Subclass C. They specifically assert that the trial court applied the wrong test when deciding that Subclass C failed the Rule 23 test as to predominance and contend that a recent decision by this court has changed the standard for testing predominance. See Johnson's Sales Co. v. Harris, 370 Ark. 387, 260 S.W.3d 273 (2007). Cross-appellants contend that Johnson's Sales changed the law cited by the circuit judge, which was (1) that common claims must predominate over any questions only affecting individual members of the class, citing Mega Life & Ins. Co. v. Jacola, 330 Ark. 261, 954 S.W.2d 898 (1997); and (2) if the common issues predominate over individual claims, the trial court may certify the class to try common issues first, and then bifurcate the trial under Rule 23(d) to resolve individual issues, citing Fraley v. Williams Ford Tractor and Equip., 339 Ark. 322, 5 S.W.3d 423 (1999). For their contention that the predominance analysis has changed, the cross-appellants rely on the following language in Johnson's Sales: If a case involves preliminary, common issues of liability and wrongdoing that affect all class members, the predominance requirement is satisfied even if the circuit court must subsequently determine individual damages issues in bifurcated proceedings. 370 Ark. 387, 392, 260 S.W.3d 273, 277. They further cite another case for the well-settled proposition that the initial analysis is whether there is a common preliminary issue with the potential to wipe out the possibility of a claim for every class member. See Snowden, 366 Ark. 138, 233 S.W.3d 664. This language, say the cross-appellants, taken together, means that when a circuit court determines that there are common issues of liability affecting all class members, the predominance requirement is automatically satisfied. We disagree. We initially observe that the cross-appellants' interpretation of the Johnson's Sales opinion is wrong. This court did not change the standard for determining predominance in Johnson's Sales and certainly did not hold that where the judge finds common questions of liability, which apply to all class members, predominance is automatically satisfied. In point of fact, the paragraph in Johnson's Sales, which includes the language relied on by the cross-appellants, reads in its entirety as follows: 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[.] This court has explained that the starting point in examining the predominance issue is whether a common wrong has been alleged against the defendant. 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. Moreover, this court has recognized that a bifurcated process of certifying a class to resolve preliminary, common issues and then decertifying the class to resolve individual issues, such as damages, is consistent with Rule 23. Moreover, this court has repeatedly stated: [t]he predominance element can be satisfied if the preliminary, common issues may be resolved before any individual issues. In making this determination, we do not merely compare the number of individual versus common claims. Instead, we must decide if the issues common to all plaintiffs predominate over the individual issues, which can be resolved during the decertified stage of bifurcated proceedings. 370 Ark. at 392, 260 S.W.3d at 277 (internal citations omitted) (emphasis added). Hence, it is clear that this court has not changed its predominance requirements and that the standard is the same as that cited by the circuit judge. To repeat, the circuit judge must first decide that there are issues of liability common to the class and then determine whether those common issues predominate over individual questions. In the instant case, the circuit judge specifically found that individual issues predominated over any common questions of liability for Subclass C. The Johnson's Sales case is in agreement with this finding. Further, as the cross-appellees rightly note, proximate cause cannot be decided at a subsequent proceeding after liability has been determined for all Subclass C members because causation is a foundational element for determining liability in negligence claims. See, e.g., Jones v. McGraw, 374 Ark. 483, 486, 288 S.W.3d 623, 625-26 (2008) (the circuit judge erred in permitting the defendant to introduce proximate-cause evidence at a hearing on damages because proximate causation is an element of liability for medical malpractice, not an element of damages); Collier v. Citizens Coach Co., 231 Ark. 489, 330 S.W.2d 74 (1959) (negligence must proximately cause a given result in order to justify a finding of negligence); W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 41 (5th ed. 1984) (An essential element of the plaintiff's cause of action for negligence, or for that matter for any other tort, is that there be some reasonable connection between the act or omission of the defendant and the damage which the plaintiff has suffered. This connection usually is dealt with by the courts in terms of what is called `proximate cause,' or `legal cause.'). The critical distinction between Subclass A and Subclass C is that proximate causation is a foundational element of the torts of strict liability, negligence, wrongful death, and outrage. Therefore, the plaintiffs cannot establish the defendants' liability without addressing the individualized issues of proximate causation, which involve the extent of exposure to carbon monoxide and how that exposure caused damage to the putative-class members. In Subclass A, the issues of Simpson's liability for breach of contract due to defectively designed apartment units and for fraudulent concealment in not revealing the defect to renters can be resolved at a preliminary stage. Furthermore, the damages prayed for by putative-class members were for the rental payments that had been made. Thus, the Subclass A claims do not involve the individual variances associated with personal exposure to carbon monoxide, including class members' lifestyles and medical histories, and the resulting injuries to putative-class members caused by the alleged negligence of the defendants/appellants/cross-appellees. In this respect, the Subclass C claims are more akin to those made in Baker, where we affirmed the denial of class certification. We affirm on this point.
The circuit judge's order found that the superiority requirement is not satisfied in this case with respect to Subclass C. The number and the nature of the individual inquiries that would be required of the class will make a class action inefficient and difficult to manage. This case involves issues of defect, unreasonable danger, duty, breach of duty, comparative fault, modification of equipment, proximate cause, statute of limitations, contribution indemnity, vicarious liability, and damages. There exist viable alternatives to class litigation in this case with respect to Subclass C that are superior alternatives. Arkansas Rule of Civil Procedure 20 permits cases that assert a common question of law or fact to be joined permissively, without a showing of predominance. Separately filed actions can be consolidated for trial if they are sufficiently similar. Ark. R. Civ. P. 42(a). The cross-appellants maintain that the circuit judge erred because she erroneously found that proximate cause and degree of exposure would be involved in the class action. As already discussed, this argument must fail because, in the context of the tort claims brought by Subclass C, proximate cause and damages are foundational elements in determining liability. The cross-appellants also urge that the circuit judge erred in finding that there are superior alternative methods to class certification because the alternatives do not require a showing of predominance. Cross-appellants, in connection with this argument, maintain that the circuit judge erred in finding that a decision on liability, apart from causation and damages, is not a predominating issue. However, this court has already concluded that the circuit judge did not abuse her discretion in concluding that individual issues do predominate in the claims of Subclass C. This court defers to the circuit judge with respect to a decision of whether a class action is the superior method for resolving multiple claims because the judge must take into consideration, among other things, whether she believes she can effectively manage the class. See Bryant, 374 Ark. at 50, 285 S.W.3d at 643. Here, the judge held that certifying Subclass C would result in unmanageable litigation. We find no abuse of discretion on this point, and we affirm. Affirmed on direct appeal and cross-appeal; motions to dismiss cross-appeal denied.