Opinion ID: 2092103
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Heading Rank: 2

Heading: Representative PartiesDo They Fairly and Adequately Protect the Class Interests?

Text: In a class action, the interests of a number of persons not present before the court are conclusively determined on the strength of the case made by the representative parties. Therefore, it is imperative that the named parties demonstrate the ability to protect the interests of the class by establishing that: (2) the representative parties do not have a conflict of interest in the maintenance of the class action; and (3) the representative parties have or can acquire adequate financial resources, considering R.C.P. 42.17, to assure that the interests of the class will not be harmed. Iowa R.Civ.P. 42.3(b). In addition, the purported representatives must establish that they are in fact members of the purported class. In this case, the defendants claim that the plaintiffs have failed to establish these required criteria. A. Class Membership and Conflicts of Interest. Under the federal rules, a class representative must be a member of the class sought to be represented. At least one commentator has suggested that this prerequisite is central to the concept of due process for absent class members. 1 Newburg on Class Actions § 1120, Note .01, at 195. It is also said to be inherent in the real party in interest requirement. See 7 Wright & Miller, supra § 1761, at 584-85. We conclude that, while class membership is not expressly required by the Iowa Class Actions Rule, it is implicit in them. See, Note, The Iowa Uniform Class Actions Rule: Intended Effect and Probable Results, 66 Iowa L. Rev. at 1258-59. Prior to adoption of our present rules, membership in the class was a requirement. See Lucas v. Pioneer, Inc., 256 N.W.2d 167 (Iowa 1977) (refused to allow named plaintiffs to assert claims against defendants from whom plaintiffs had not purchased seed). Defendants assert that one of the named plaintiffs, Mike Moley, is not a member of the class he seeks to represent because he did not make the transition from BC/BS to EDSF, but, in fact, obtained new and independent employment. Furthermore, Moley, according to defendants, had been dissatisfied with his employment at BC/BS long before the forced transition. On this basis, they claim that Moley's injuries and interests are not coextensive with those of the class members, and he should, therefore, be dismissed as a named plaintiff. Defendants also claim that a number of conflicts of interest exist between other named plaintiffs and the remaining class members. They claim that there is an obvious split between the 101 employees who have subsequently left employment with EDSF, and the 38 who remain. In addition, defendants contend that a conflict exists because of the possibility that some of the employees who have been transferred may have no complaint with either of the defendants but have willingly accepted employment with EDSF in lieu of severance pay. Further, the defendants claim that the overzealousness of some of the named plaintiffs, coupled with their involuntary termination from EDSF, preclude them from being adequate representatives of the majority of the class. This argument misses the crux of the plaintiffs' case. The cause of action presented here focuses on the forced transition of the BC/BS employees to employment with the subsequent employer. All of the class members were dismissed and simultaneously offered positions with EDSF. In this underlying event lies the crux of plaintiffs' claims against defendants. Not every disagreement between a representative and other class members will stand in the way of a class action suit. See 1 Newburg on Class Actions § 1120F, at 203. The conflict must be fundamental, going to the specific issues and controversies. Id. The issues in this case, i.e., the alleged violation of the employment manual; the third-party beneficiary claims; the unjust enrichment claims; and the claimed violation of the Wage Collection Act, focus on the dismissal and failure to pay severance benefits. The plaintiffs have no conflict with each other with regard to those issues. As one court has noted, not every difference in view creates the antagonism which will defeat the bringing of a class action for the antagonism must relate to the subject matter of the suit. The fact that some members of an alleged class do not favor the bringing of a lawsuit, or may feel that the representative party may have ulterior motives for bringing the suit, will not defeat the bringing of a class action. Jacobi v. Bache & Co., 16 Fed.R.Serv.2d 71, 73 (S.D.N.Y.1972) (citing First American Corp. v. Foster, 51 F.R.D. 248, 250 (N.D.Ga.1970); accord Mersay v. First Republic Corp. of America, 43 F.R.D. 465, 468 (S.D.N.Y.1968). We do not find that these plaintiffs have conflicts which render them inadequate representatives of the class members. B. Lack of Adequate Financial Resources. Iowa Rule of Civil Procedure 42.3(b)(3) requires as a prerequisite to certification as a class action that: [T]he representative parties have or can acquire adequate financial resources, considering R.C.P. 42.17, to assure that the interests of the class will not be harmed. We have examined the record with regard to the ability of the representative parties to adequately finance the prosecution of this suit, and, while it might constitute a financial strain on some, even requiring encumbering the homes of some, we cannot conclude that the potential lack of adequate financing for a proper prosecution of this case would present a problem sufficient to deny certification. We do not believe the trial court abused its discretion in making a similar finding.