Opinion ID: 1303959
Heading Depth: 1
Heading Rank: 2

Heading: propriety of the permanent injunction

Text: United First asserts that the district court acted prematurely in imposing the permanent injunction against United First and in favor of the class prior to certification and notice to the class, as well as in advance of a motion or hearing, without benefit of a hearing, [1] and without issuing findings of fact and conclusions of law. Alternatively, argues United First, the district court erred by imposing the injunction where there was no evidence that United First would continue to enforce the due-on-sale provision after this Court issued its decision of O'Boskey I. Both of United First's arguments are premised on its erroneous conception that the merits and remedy were not decided in the district court's decisions of September 1 and November 25, 1981. At that time, United First pointed to no procedural error, and suggested no reason opposing the remedy imposed either to the district court or this Court on appeal. At the time it certified the class in 1984, the only question for the district court concerning the injunction already decided upon was whether there was reason not to impose it. The district court was well within its discretion in determining that the injunction should inure to the benefit of the class. As United First notes, in class actions the rules of procedure contemplate that ordinarily the class will be determined and given notice early in the proceedings and prior to deciding the merits. See I.R.C.P. 23(c) (1980); see also Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78, 94 S.Ct. 2140, 2152-53, 40 L.Ed.2d 732 (1974); In re Consolidated Pretrial Proceedings in Air West Securities Litigation, 73 F.R.D. 12, 14-15 (N.D.Cal. 1976). [2] Otherwise, potential class members could await the determination of the merits prior to deciding whether to participate in the class and be bound by the judgment. Id. While such is ordinarily the case, where the defendant precipitates or acquiesces to a decision on the merits prior to deciding the class questions, that defendant may not later complain of prematurity. As the Alaska court explained: While some courts have indeed required that class certification precede a determination of the merits, it is apparent that any right to such a procedure can be waived, either expressly or impliedly. We have no difficulty finding a waiver under the facts of this case. The plaintiffs diligently sought adjudication of the class action issues by twice moving for certification. The defendants initiated summary judgment proceedings while plaintiffs' second motion for certification of the class action was pending. Under these circumstances, the trial court did not err in ruling on the merits and then certifying the class. State v. Alex, 646 P.2d 203, 213-14 (Alaska 1982) (footnotes omitted); accord, e.g., Katz v. Carte Blanche Corp., 496 F.2d 747, 762 (3d Cir.1974); Air West, supra, 73 F.R.D. at 16; California Employment Development Department v. Superior Court, 30 Cal.3d 256, 178 Cal. Rptr. 612, 636 P.2d 575, 577 & 579 (1981); Civil Service Employees Insurance Co. v. Superior Court, 22 Cal.3d 362, 149 Cal. Rptr. 360, 584 P.2d 497, 503-04 (1978). The class action defendant who chooses to submit an issue on its merits to a trial court assumes the risk that an unfavorable judgment will benefit the class ultimately determined. Civil Service, supra, 584 P.2d at 504, 149 Cal. Rptr. at 367; see Twin Lakes Improvement Association v. East Greenacres Irrigation Dist., 90 Idaho 281, 287, 409 P.2d 390, 396 (1965) (The trial court was correct in finding that this was a class action, the effect of which would be enforceable against or on behalf of those having similar rights.) Indeed, the advantages to the defendant may at times outweigh the risks, as notes the California court: As the decisions recognize, there are many reasons why a defendant may be willing, indeed even eager, to forego class notification prior to adjudication of some, or even all, of the principal legal issues in a case. In some cases, for example, a defendant may decide that the sending of notice itself will be detrimental to its interests, sullying its reputation or perhaps leading some class members to be less willing to continue an ongoing relationship with the defendant. In other cases, a defendant may want to avoid discovery or other litigation expenses entailed in notification which may be eliminated if the plaintiff's claim is rejected on the merits at an early stage of the proceeding. Civil Service, supra, 584 P.2d at 503-04, 149 Cal. Rptr. at 366-67. The plaintiffs filed the instant case as a class action and sought declaratory and injunctive relief. As the district court observed, United First quickly moved for summary judgment on the merits well in advance of sufficient discovery to decide the class questions. R., Vol. 2, pp. 130-31 (decision of September 1, 1981). Nevertheless, the district court declared: [T]here are areas involved in this case that seem appropriate for class treatment. Id. at 131. The district court proceeded to hold that the due-on-sale provision could not be invoked absent a showing of impaired security  a holding affirmed in O'Boskey I. In its clarifying decision of November 25, 1981, the district court unambiguously established that the class ultimately established would be entitled to injunctive relief, R., Vol. 2, p. 125, the relief sought in the original complaint. At this point, hearings had taken place, the district court had made findings and rendered conclusions on the merits and the remedy. United First appealed only on the issue of the enforceability of the due-on-sale clause. After a long pendency on appeal and subsequent discovery pertaining to the class, in late 1984 and early 1985 the district court established the class, ordered notice, and extended the injunction to the class. The merits and remedy were long ago determined. United First had run the risk and now suffered the consequences of an adverse decision inuring to the class. It had appealed without raising any protestations over procedure. United First was and is far too late in objecting to the injunction and standing on its procedural rights. Consequently, following this Court's decision in O'Boskey I, the only possible question for the district court concerning the propriety of the injunction was not whether it should not be imposed as the district court had decided in November of 1981. The decision of whether to impose injunctive relief is within the discretion of the district court. Harris v. Cassia County, 106 Idaho 513, 517, 681 P.2d 988, 992 (1984). As then Chief Justice Donaldson further observed for the Court: The court which is to exercise the discretion is the trial court and not the appellate court, and an appellate court will not interfere absent a manifest abuse of discretion. Id. Citing our Harris decision among others, United First argues that because it had decided not to enforce the due-on-sale clause absent impairment of security, there was no further threat of injury necessitating an injunction. Without such a threat, says United First, the district court abused its discretion in imposing the injunction. It is true that injunctions should issue only where irreparable injury is actually threatened. See Cazier v. Economy Cash Stores, Inc., 71 Idaho 178, 187, 228 P.2d 436, 441 (1951); Wright & Miller, Federal Practice and Procedure: Civil § 2942 (1973). Where the conduct causing injury has been discontinued, the dispute is moot and the injunction should be denied. Wright & Miller, supra, § 2942, p. 371. However, as the United States Supreme Court observed, the trial court must be convinced that there is no reasonable expectation that the wrong will be repeated. United States v. W.T. Grant Co., 345 U.S. 629, 633, 73 S.Ct. 894, 897, 97 L.Ed. 1303 (1953) ( quoting United States v. Aluminum Company of America, 148 F.2d 416, 448 (2d Cir.1945)). Further, the burden on the defendant to make this showing is a heavy one. Id.; see also, United States v. Concentrated Phosphate Export Assoc., Inc., 393 U.S. 199, 203, 89 S.Ct. 361, 364, 21 L.Ed.2d 344 (1968) (The test for mootness in cases such as this is a stringent one.). The reason for so burdening the defendant lies in inevitable questions concerning the motive of the defendant's voluntary cessation. The Supreme Court warned: It is the duty of the courts to beware of efforts to defeat injunctive relief by protestations of repentance and reform, especially when abandonment seems timed to anticipate suit, and there is probability of resumption. United States v. Oregon State Medical Society, 343 U.S. 326, 333, 72 S.Ct. 690, 696, 96 L.Ed. 978 (1952). To accept such protestation and cessation on face value would leave the defendant free to return to his [or her] old ways. W.T. Grant, supra, 345 U.S. at 632, 73 S.Ct. at 897. Thus, the power of the district court to grant injunctive relief survives discontinuance of the illegal conduct. Id. at 633, 73 S.Ct. at 897; accord, City of Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283, 289 n. 10, 102 S.Ct. 1070, 1074-75 n. 10, 71 L.Ed.2d 152 (1982); Concentrated Phosphate, supra, 393 U.S. at 203, 89 S.Ct. at 364. In this case, the district court clearly was well within its discretion when it remained unconvinced that United First's alleged cessation eliminated any reasonable expectation of repetition of the wrong. Despite the district court's adverse decision of September 1, 1981, United First had continued to enforce the due-on-sale clause absent impairment of security while its appeal pended. After the district court's decision was affirmed in O'Boskey I, United First continued to resist the certification of and notice to the class, and gave no indication that it would not continue to enforce the clause against the potential class members. In an attempt to avoid notice to the class and imposition of the injunction in favor of the class, United First moved that it be enjoined from enforcing the clause against the named plaintiffs only and moved for dismissal. Finally, on November 26, 1984, after the district court had rendered its decision certifying the class, ordering notice to class members, and extending the injunction in favor of the class, United First filed the affidavit of Glaisyer attesting to having changed its policy as of the decision of O'Boskey I in March of 1984. A better example of an eleventh hour protestation of repentance and reform is difficult to imagine. The district court was unswayed from its findings of August 3, 1984: Since the defendant has apparently taken no action to notify borrowers of the Supreme Court ruling there are potentially numerous persons who have rights that may not receive the benefits of those rights if this action is dismissed or otherwise terminated. United First Federal apparently has no intentions of notifying its borrowers of the effect of the decision in this case. Dickinson deposition, p. 57. Regardless of the fact that a class has not been certified at present it seems clear that there is a class entitled to injunctive relief and that had a stay not been entered pending appeal to the Supreme Court the class would have been certified some years ago. To allow the defendant to secure dismissal of this action at this point, after securing a stay of proceedings, smacks of unfairness. While Rule 23(e), I.R.C.P. is not controlling, the policy inherent in that rule would be defeated if the plaintiffs' action were dismissed. Persons entitled to injunctive relief might well be left in the dark as to their rights, and it would be naive to assume that the defendant would give the type of notice necessary to inform those persons of their rights. R., Vol. 2, pp. 119-20 (emphasis added). Based on United First's past and continued conduct, the district court believed potential class members would not receive the benefits of their rights absent notice and an injunction. [3] There was no manifest abuse of discretion in this conclusion.