Opinion ID: 1615159
Heading Depth: 2
Heading Rank: 2

Heading: Predominance of Relief in the Patterson Settlement

Text: Given the varying injuries and interests of the class members, it should come as no surprise that the Patterson settlement provides both injunctive and monetary relief. See Allison, 151 F.3d at 413 (Monetary remedies are more often related directly to the disparate merits of individual claims. . . . As a result, a class seeking substantial monetary remedies will more likely consist of members with divergent interests.). [C]lose scrutiny is necessary if money damages are to be included in any mandatory class in order to protect the individual interests at stake. . . . Coleman v. General Motors Acceptance Corp., 296 F.3d 443, 448 (6th Cir. 2002). This Court has observed that [a]s a general rule, certification of a class pursuant to Rule 23(b)(2) is improper if the primary relief sought is money damages, Compass Bank v. Snow, 823 So.2d 667, 678 (Ala.2001); it is also true that the fact that a Rule 23(b)(1) or (b)(2) suit may ultimately result in a monetary recovery from a defendant does not prevent certification under those subdivisions. First Alabama Bank of Montgomery, N.A. v. Martin, 425 So.2d 415, 423 (Ala.1982). The United States Court of Appeals for the Fifth Circuit observed in Allison that there is little discussion by appellate courts as to what it means for a particular form of relief to be `predominant.' The Advisory Committee Notes make no effort to define or explain the concept. Interpreting the term literally, predominant means `controlling, dominating, [or] prevailing.' Webster's Third New International Dictionary 1786 (1993). But how that translates into a workable formula for comparing different types of remedies is not at all clear. 151 F.3d at 411-12. Despite the difficulty, the Allison court devised a standard for determining which kind of reliefinjunctive or monetarypredominates in a putative class action certified under Rule 23(b)(2), a standard this Court adopted in Snow, 823 So.2d at 678, and reaffirmed in Funliner of Alabama, L.L.C. v. Pickard, 873 So.2d 198, 208-09 (Ala.2003). The Allison court concluded: [M]onetary relief predominates in (b)(2) class actions unless it is incidental to requested injunctive or declaratory relief. By incidental, we mean damages that flow directly from liability to the class as a whole on the claims forming the basis of the injunctive or declaratory relief. See Fed.R.Civ.P. 23(b)(2) (referring only to relief appropriate `with respect to the class as a whole'). Ideally, incidental damages should be only those to which class members automatically would be entitled once liability to the class (or subclass) as a whole is established. That is, the recovery of incidental damages should typically be concomitant with, not merely consequential to, class-wide injunctive or declaratory relief. Moreover, such damages should at least be capable of computation by means of objective standards and not dependent in any significant way on the intangible, subjective differences of each class member's circumstances. Liability for incidental damages should not require additional hearings to resolve the disparate merits of each individual's case; it should neither introduce new and substantial legal or factual issues, nor entail complex individualized determinations. Thus, incidental damages will, by definition, be more in the nature of a group remedy, consistent with the forms of relief intended for (b)(2) class actions. Allison, 151 F.3d at 415 (some citations omitted). In other words, there are at least three factors to consider in determining whether damages are incidental for purpose of class certification: (1) whether such damages are of a kind to which class members would be automatically entitled; (2) whether such damages can be computed by objective standards, and not standards reliant upon intangible, subjective differences of each class member's circumstances; and (3) whether such damages would require additional hearings to determine. 32B Am.Jur.2d Federal Courts § 1710 (2007). In their briefs on appeal, the parties dispute whether various upgrades in pest-control services and various discounts constitute injunctive or monetary relief. See generally Adams v. Robertson, 676 So.2d 1265 (Ala.1995). In this case, however, we find dispositive the extent to which the settlement requires individualized determinations of damage. As the United States Court of Appeals for the Sixth Circuit has explained, a critical factor in determining whether injunctive relief predominates in a Rule 23(b)(2) class . . . is whether the compensatory relief requested requires individualized damages determination or is susceptible to calculation on a classwide basis. Coleman, 296 F.3d at 448. If nothing else, the mechanisms provided in the Patterson settlement for customers to file their termite-damage claims distinguishes this case from Adams and demonstrates that the termite-repair plan constitutes monetary relief. The customer who has a claim for termite damage must submit a properly supported claim[] to the plan administrator, who will process the claim within 90 days. The plan administrator is necessary because the amount of the claim for each customer will vary based on the extent of the termite damage sustained by each customer's structure. The individualized nature of each claim for termite damage indicates that the relief is monetary in nature and not class-wide injunctive relief. See, e.g., Holmes, 706 F.2d at 1156 (stating that `money damages are directly related to the disparate merits of individual claims and are not generally applicable to the claims of the class as a whole' (quoting Gerald E. Rosen, Title VII Classes and Due Process: To (b)(2) or Not to (b)(3), 26 Wayne L.Rev. 919, 923 (1980))). Moreover, if the customer disagrees with the plan administrator over the amount awarded for the termite damage, the Patterson settlement provides a system of hearings and appeals. Although this provision is certainly intended to help class members receive just compensation for termite-related property damage, the hearings and appeal system further reflect the individualized nature of the relief available under the termite-repair plan. As the Allison court observed: Liability for incidental damages should not require additional hearings to resolve the disparate merits of each individual's case; it should neither introduce new and substantial legal or factual issues, nor entail complex individualized determinations. 151 F.3d at 415. Though the Pattersons and Wayne's insist that the forfeiture of defenses by Wayne's in the settlement means that the appeals process does not concern liability, the fact that individual computations and additional hearings are required to effect the relief provided by the termite-repair plan militates against finding that the relief constitutes incidental damages suitable for Rule 23(b)(2) certification. One reason that members of classes certified under Rule 23(b)(2) typically do not have the right to opt out of the action is that [o]pting out of a(b)(2) suit for injunctive relief would have little practical value or effect. Even class members who opted out could not avoid the effects of the judgment. A(b)(2) injunction would enjoin all illegal action, and all class members would necessarily be affected by such broad relief. Holmes, 706 F.2d at 1157. Based on the test devised in Allison and adopted by this Court, the relief provided in the Patterson settlement as a whole is not of the nature contemplated for Rule 23(b)(2) class certification. [7] The members of the Patterson class as a whole are not automatically entitled to the damages available in the Patterson settlement. Instead, the damages available under the termite-repair plan are dependent upon the individual differences between the amount of termite damage sustained by each class member submitting a claim. The damages claims under the termite-repair plan will require additional hearings if the claimant and the plan administrator disagree on the amount to which the claimant is entitled.