Court Opinion

ID: 5109417
Source: CourtListenerOpinion
Date Created: 2021-10-02 12:29:05.703512+00
Date Added: 2024-06-11T08:21:26.515444
License: Public Domain

BROWN, J., dissenting in part and concurring in part. This proposed class action involves 65,-000 putative members. The contention of the class representatives in their class-action complaint is that the early termination fee imposed by Alltel Corporation on its cellular phone customers is a deceptive trade practice. Among the allegations made by the class representatives as reasons for this conclusion are: (d) the early termination fee is an illegal penalty; [[Image here]] (f) there is no legitimate basis for imposing the early termination fee; [[Image here]] (o) the fee is not a valid liquidated damages provision because it is not reasonably related to any action or anticipated losses sustained by the Defendants; [[Image here]] (s) the early termination fee is unreasonable. The complaint also contained a claim for unjust enrichment, and alleged that: 36. The early termination fee does not reflect any actual expense or loss incurred by the Defendants when a customer decides to cancel cellular service. 37. The early termination fee is not a valid liquidated damages provision because it bears no reasonable relationship to the anticipated or actual losses that the Defendants sustain as a result of customer [sic] who cancel or transfer service. [[Image here]] 39. The early termination fee is void as a penalty. In both counts, the class representatives premise liability on the unreasonableness or illegitimacy of the fee and the fact that it is not tied to Alltel’s anticipated losses. The trial judge, in denying class certification, focused on the lack of a common amount of loss sustained by Alltel that would apply to all of the 65,000 putative class members. With respect to each of the proposed members, the judge foresaw the need to determine whether the termination fee was reasonable and legitimate. He concluded that the issues were individualized and that class certification, as a result, would present an untenable and unmanageable situation. The majority holds that the judge abused his discretion in this conclusion. According to the majority, “In this case, Appellant alleges that the common wrong giving rise to this litigation is that the Appellees engaged in an unfair and deceptive business practice of imposing the early termination fee.” The majority goes forward and holds that there must be a determination by the trial judge on this and the other common issues alleged. The majority appears to be telling the trial judge that collecting the fee may well be a common issue of wrongdoing for the class. My problem with the opinion is that it then forecloses an analysis by the judge on remand into the elements of the claim necessary to prove that the fee is either reasonable or a penalty. The elements of an underlying claim are important, as the majority acknowledges, see Williamson v. Sanofi Winthrop Pharm., Inc., 347 Ark. 89, 60 S.W.3d 428 (2001), but again the majority concludes that the necessary analysis of whether the fee is tied to Alltel losses would be merit based. Apart from the fact that the fee-is-penalty allegation is conclusory, the trial judge, understandably, felt constrained to look at the elements of the class claim to determine if a penalty in fact was being assessed and a deceptive trade practice was being perpetrated. Again, this goes back to the complaint where allegations are made that the fee is unreasonable in light of the anticipated losses Alltel will experience by early termination. In short, I am hard-pressed to understand what the trial judge is supposed to do on remand. It seems his hands are tied in making the necessary analysis for common wrongdoing and predominance. If the majority forecloses an analysis on anticipated Alltel losses as the basis for the fee, the bald allegation that the fee is a penalty will stand as the common and predominant issue. I further disagree with the majority’s decision to strike the testimony of Dr. Hausman, Alltel’s expert witness, on how early termination fees work. In a case of this complexity, it is important for the trial judge to be educated on what is involved. It occurs to me that a basic tutorial on early termination fees was important for the trial judge in the instant case. Striking that testimony eliminates important background information. Nor do I believe the case of Williams v. First Unum Life Ins. Co., 358 Ark. 224, 188 S.W.3d 908 (2004), is authority for striking Dr. Hausman’s testimony. The Unwn ease involved an attorney testifying as an expert as to the law and whether the term “mental illness” was ambiguous. This court made it clear that attorneys are advocates, not experts, and that a legal opinion from an attorney invaded the province of the fact-finder and the province of the judge who instructs on what the law is. That situation does not pertain to the instant case. I do, however, believe the trial judge bled over into the merits when he concluded, “Thus, there are potential intraclass conflicts of interest .... ” and “The court is convinced that at least some of the proposed class members have suffered no damages.” Those findings are impermissible at this stage of the litigation. This court has very rarely reversed the denial of class certification on abuse-of-discretion grounds and ordered a grant of certification. See, e.g., Fraley v. Williams Ford Tractor and Equipment Co., 339 Ark. 322, 5 S.W.3d 423 (1999); Summons v. Mo. Pac. R.R., 306 Ark. 116, 813 S.W.2d 240 (1991). We come perilously close to doing so in this case. I would reverse and remand for the limited purpose of having the judge reevaluate his opinion in light of any objectionable merits-based determinations. I am convinced, though, that the majority opinion unduly limits the judge’s analysis and discretion in doing the reevaluation.