Court Opinion

ID: 9890525
Source: CourtListenerOpinion
Date Created: 2023-10-13 14:07:26.874599+00
Date Added: 2024-06-11T13:26:22.872637
License: Public Domain

RENDERED: OCTOBER 6, 2023; 10:00 A.M.
                       NOT TO BE PUBLISHED

              Commonwealth of Kentucky
                         Court of Appeals

                             NO. 2023-CA-0051-ME

AT&T CORP. AND BELLSOUTH
TELECOMMUNICATIONS, LLC                                             APPELLANT

                APPEAL FROM FRANKLIN CIRCUIT COURT
v.              HONORABLE THOMAS D. WINGATE, JUDGE
                        ACTION NO. 16-CI-00986

DONNA FELTNER, ON BEHALF
OF HERSELF AND A CLASS OF
SIMILARLY SITUATED
INDIVIDUALS                                                           APPELLEE

                               OPINION
                 AFFIRMING IN PART, VACATING IN PART,
                          AND REMANDING

                                  ** ** ** ** **

BEFORE: CETRULO, KAREM, AND MCNEILL, JUDGES.

KAREM, JUDGE: AT&T Corp. and BellSouth Telecommunications LLC

(collectively “AT&T”) appeal from a Franklin Circuit Court order granting the

appellee Donna Feltner’s petition for class certification. The underlying case
involves AT&T’s application of weed killer around its service terminals. The

circuit court had granted a previous petition for class certification which was

vacated by a panel of this Court on the grounds that Feltner had improperly sought

a “fail-safe” class. See AT&T Corp. v. Feltner, No. 2020-CA-1500-ME, 2021 WL

2753980 (Ky. App. Jul. 2, 2021). Upon remand, Feltner amended her complaint to

alter the description of the putative class and filed a second petition for class

certification, which the circuit court granted. Upon careful review, we conclude

that the class certified by the circuit court is not improperly “fail-safe,” and affirm

that part of its order. The circuit court did not, however, make several findings

mandated by Kentucky Rules of Civil Procedure (“CR”) 23; therefore, we must

vacate the remainder of its order and remand for further proceedings.

              FACTUAL AND PROCEDURAL BACKGROUND

             The underlying facts of the case were set forth in our prior opinion:

                    As part of its vast telecommunications network,
             AT&T maintains several outdoor service terminals across
             the Commonwealth. AT&T’s telecommunications
             equipment is often located on property owned or leased
             by third parties. For AT&T to access and service its
             equipment, the company must possess easements on
             many of these properties. One such easement is . . .
             located [on] Feltner’s real property in New Castle,
             Kentucky.

                    The central issue in this case surrounds AT&T’s
             use of a pesticide known as “Rainbow Weed Killer.” To
             prevent its service terminals from being damaged and its
             technicians from being harmed by the overgrowth of

                                          -2-
weeds around the terminals, AT&T allowed its
technicians to apply Rainbow Weed Killer to the areas
around the equipment.

      In June of 2015, Feltner notified AT&T that
several plants in her garden on her property, which was
near AT&T’s service terminal, were dying. AT&T sent
Mark Bullock, an area manager in AT&T’s Corporate
Environment Health and Safety Field Support division, to
inspect the area. Bullock observed some distressed areas
surrounding AT&T’s telephone equipment, but he
noticed no areas of distress in Feltner’s garden.

        Feltner contacted the Kentucky Department of
Agriculture regarding the alleged damage to her property
from the pesticides applied by AT&T. Representatives
from the Department collected and analyzed soil samples
from Feltner’s property and determined that two active
ingredients in Rainbow Weed Killer were in fact present
in the soil. The Department’s inspector also observed
that the amount of Rainbow Weed Killer detected was
more than was appropriate for the tested area. As a result
of its investigation, the Department of Agriculture issued
two notices of violation to AT&T: one for failure to
obtain a license to use pesticides in violation of Kentucky
Revised Statutes (KRS) 217B.120(17), and one for
failure to use pesticides as directed on their warning label
in violation of KRS 217B.120(2).

       On September 15, 2016, Feltner filed a class action
lawsuit against AT&T, alleging that she and a class of
similarly situated individuals had suffered property
damage as a result of AT&T's use of Rainbow Weed
Killer. The five-count complaint included claims against
AT&T for nuisance, trespass, negligence, negligence per
se, and strict liability. Feltner then moved for class
certification, and by order entered on November 16,
2020, the circuit court granted Feltner’s class-
certification motion.

                            -3-
Feltner, 2021 WL 2753980, at *1 (footnote omitted).

             AT&T appealed. In its opinion rendered on July 2, 2021, a panel of

this Court vacated the circuit court’s order for certifying an improper “fail-safe”

class. Feltner thereafter filed an amended complaint with an amended definition of

the class with a second petition seeking class certification. The circuit court

granted her petition and this second appeal by AT&T followed.

                             STANDARD OF REVIEW

             This interlocutory appeal is permitted under CR 23.06, which states:

“An order granting or denying class action certification is appealable within 10

days after the order is entered.” Because this is an interlocutory appeal, our review

is limited solely to the issue of class certification; it cannot extend to evaluating the

merits of the underlying case. Hensley v. Haynes Trucking, LLC, 549 S.W.3d 430,

436 (Ky. 2018). “Merits questions may be considered to the extent – but only to

the extent – that they are relevant to determining whether the Rule 23 prerequisites

for class certification are satisfied.” Id. at 437 (emphasis in original) (citations

omitted). Consequently, “[t]he determination [of] whether there is a proper class

does not depend on the existence of a cause of action. A suit may be a proper class

action, conforming to Rule 23, and still be dismissed for failure to state a cause of

action.” Id. (citations omitted).

                                           -4-
             AT&T argues that (1) the circuit court failed to make several

statutorily mandated findings; (2) the findings it did make were inadequate; and (3)

it yet again certified an improper fail-safe class.

             We review the circuit court’s decision to grant class certification for

an abuse of discretion. Hensley, 549 S.W.3d at 444. “The test for abuse of

discretion is whether the trial [court’s] decision was arbitrary, unreasonable, unfair,

or unsupported by sound legal principles.” Commonwealth v. English, 993 S.W.2d

941, 945 (Ky. 1999).

                                     ANALYSIS

i. The class definition is not “fail-safe”

             Before addressing AT&T’s arguments regarding the adequacy of the

circuit court’s findings pursuant to CR 23, we must address the “initial, potentially

dispositive consideration,” which is whether the circuit court again improperly

approved a fail-safe class. Manning v. Liberty Tire Services of Ohio, LLC, 577

S.W.3d 102, 110 (Ky. App. 2019). “[T]he definition of the class is an essential

prerequisite to maintaining a class action.” Id. (citation omitted).

             “[T]he definition of a ‘fail-safe’ class is a class that cannot be defined

until the case is resolved on its merits. It bases its membership not on objective

criteria, but on the legal validity of each member’s claim. . . . By its very nature, a

fail-safe class includes only those who are entitled to relief.” Id. at 110-11

                                           -5-
(internal quotation marks and citations omitted). The reason for prohibiting such a

class is that “it would allow putative class members to seek a remedy but not be

bound by an adverse judgment – either those class members win or, by virtue of

losing, they are not in the class and are not bound.” Id. at 111 (internal quotation

marks and citations omitted). “Moreover, by [u]sing a future decision on the

merits to specify the scope of the class, a fail-safe class definition makes it

impossible to determine who [is] in the class until the case ends.” Campbell v.

National Railroad Passenger Corporation, 311 F. Supp. 3d 281, 313 (D.D.C.

2018) (internal quotation marks and citations omitted).

             In her original complaint, Feltner’s proposed class definition was

“[a]ll real property owners in the Commonwealth of Kentucky on whose real

property Defendants committed trespass, nuisance and/or negligent property

damage due to the unlawful use of Rainbow Weed Killer pesticides.” Feltner,

2021 WL 2753980, at *3. In the first appeal, this Court held that this was an

improper “fail-safe” class definition because membership was “predicated on the

ultimate finding that AT&T committed the torts of trespass, nuisance, and/or

negligent property damage.” Id. at *4. The class definition not only “afford[ed]

class membership and the ability to pursue such claims, it presuppose[ed] whether

those who pursue a claim are entitled to damages.” Id.

                                          -6-
             Feltner’s amended complaint defines the class as “[i]n the

Commonwealth of Kentucky, all owners whose real property contains Rainbow

Weed Killer pesticide as a result of Defendants’ application of the Rainbow Weed

Killer pesticide.”

             In its motion opposing class certification, AT&T acknowledged that

while the new definition was “no longer overtly framed in terms of a completed

tort by AT&T,” it nonetheless still required the court “to determine a core merits

component of each putative class member’s claim – whether AT&T contaminated

their properties – to determine who is in the class.” In its brief, AT&T expands on

this argument, contending that the definition is fail-safe because it requires a

showing of the proof of the essential elements of tort liability – injury and

causation – because the putative class member must own property on which

Rainbow Weed Killer is not only present, but is present as a result of AT&T’s

application of the herbicide.

             We look for guidance to Manning, in which a class action was

brought after a massive fire at a tire recycling facility deposited soot, ash, and other

particulate matter on surrounding neighborhoods. Air monitoring showed high

levels of harmful particulate matter in the area, exceeding health guidelines and a

Shelter-in-Place order was issued for persons living within a one-mile radius of the

fire. Manning, 577 S.W.3d at 108.

                                          -7-
              The appellants sought certification of the following two subclasses,

the second of which closely mirrors the one at issue in the present case:

                    All persons whose dwelling was within an area
              approximately one mile from the tire fire at 14201
              Bohannon Avenue, Louisville, Kentucky, and was
              subject to a Shelter in Place Order between November 3,
              2014 and November 4, 2014.

                     All persons or property owners on whose property
              the tire fire at Liberty Tires caused soot, ash, smoke, or
              other physical remnants to land on November 3 and/or
              November 4, 2014.

Id. at 110.

              Manning held that these definitions did not constitute impermissible

fail-safe classes because membership, by definition, was not dependent on whether

a person held a valid legal claim:

                     Stated another way, the class definition does not
              hinge on a “fail-safe” definition that requires a merit-
              based analysis before membership can be determined.
              Class members need only reside in the one-mile SIP
              radius, or in the smoke plume radius as modeled by
              Appellants’ expert, or both. Indeed, Appellees make
              much of the fact that some of the putative class members
              experienced little or to no harm as a result of the SIP
              order or the smoke plume. . . . [Appellants’] classes will
              include both those entitled to relief and those not.
              [Appellees’] other argument – that they are not ultimately
              liable for many of the class members, even if they were
              incorrectly charged – proves the point.

Id. at 111 (internal quotation marks and citation omitted).

                                          -8-
             Similarly, in this case, class members need only own property on

which AT&T technicians applied Rainbow Weed Killer. Class members are not

required to show any damages; indeed, many of them may have suffered no harm

whatsoever as a result of the application of the weed killer, which, as in Manning,

proves the point that it is not a fail-safe class. As the circuit court’s order aptly

states, “whether an individual is a member of the class is not predicated on any

findings that AT&T committed torts of trespass, nuisance and/or negligent

property damage.”

             This point is illustrated by a comparison with the class definition in

Burkhead v. Louisville Gas & Electric Company, 250 F.R.D. 287, 290 (W.D. Ky.

2008), an opinion relied upon by AT&T. The plaintiffs in that case sought

damages for allegedly noxious emissions from a power plant. The class definition

limited membership to

                    Owners or residents of single family residences
             within two miles of the LG & E Cane Run facility, whose
             property was damaged by noxious odors, fallout,
             pollutants and contaminants which originated from the
             LG & E Cane Run facility located in Louisville,
             Kentucky and who have owned or resided at that single
             family residential home from May 9, 2003 to the present
             and continuing.

Burkhead, 250 F.R.D. at 290.

             The federal district court expressed reservations about the definition

because it seemed “to make the ultimate issue in the case (property damage at the

                                           -9-
hands of LG&E) a component of the class definition, thereby front-loading the

individualized damage determinations which ordinarily would be reserved until

later in the proceedings.” Id. at 294. But Feltner’s definition does not require an

individualized damage assessment in order for an individual to qualify as a class

member.

              This distinction was elucidated by the Sixth Circuit Court of Appeals

in a seminal case involving a class action suit against an insurance company for

overcharging taxes on premiums. Young v. Nationwide Mut. Ins. Co., 693 F.3d

532 (6th Cir. 2012). The class was defined as

              All persons in the Commonwealth of Kentucky who
              purchased insurance from or underwritten by [Defendant
              insurer] during the Relevant Time Period [ (June 16,
              2001, through the present) for 06-141 and (June 22,
              2001, through the present) for 06-146] and who were
              charged local government taxes on their payment of
              premiums which were either not owed, or were at rates
              higher than permitted.

Id. at 536.

              The insurer argued “that the determination of whether premium taxes

were charged that were not owed or were at rates higher than permitted goes to the

heart of the claims and impermissibly determines a required element of each claim

against them.” Id. at 538. The appellate court disagreed, stating:

              [A] “fail-safe” class is one that includes only those who
              are entitled to relief. Such a class is prohibited because it
              would allow putative class members to seek a remedy but

                                          -10-
             not be bound by an adverse judgment – either those
             “class members win or, by virtue of losing, they are not
             in the class” and are not bound. Such a result is
             prohibited in large part because it would fail to provide
             the final resolution of the claims of all class members
             that is envisioned in class action litigation. Plaintiffs’
             classes will include both those entitled to relief and those
             not. . . . This is not a proscribed fail-safe class.

Id. at 538 (citation omitted).

             For illustrative purposes only, we cite our opinion in Compliance

Advantage, LLC v. Criswell, No. 2019-CA-000872-ME, 2020 WL 2510913 (Ky.

App. May 15, 2020), in which the class was defined as “those individuals who

have received false laboratory reports or results from [appellants] through the

business of Counselor’s Clinical Cottage.” Id. at *3. The Court concluded that it

was not a “fail-safe” class because “[b]y merely receiving a false laboratory report,

the class member is not automatically entitled to recover on the claims set forth

against appellants. Rather, individuals who have received false laboratory results

are included in the class and can pursue class action tort claims against appellants.”

Id. at *4 (citation omitted).

             In light of the foregoing precedent, we affirm the circuit court’s ruling

that Feltner’s amended class definition is not improperly fail-safe.

                                         -11-
ii. The circuit court’s order does not comply with the statutory framework of
CR 23

             Class action certification is governed by CR 23.01 and CR 23.02.

“Taken together, the rules provide a comprehensive roadmap to class certification.

The mandates of both rules must be satisfied before a class may be certified. The

party seeking certification bears the burden of proof.” Manning, 377 S.W.3d at

110 (citation omitted).

             CR 23.01 provides that:

                    Subject to the provisions of [CR] 23.02, one or
             more members of a class may sue or be sued as
             representative parties on behalf of all only if (a) the class
             is so numerous that joinder of all members is
             impracticable, (b) there are questions of law or fact
             common to the class, (c) the claims or defenses of the
             representative parties are typical of the claims or
             defenses of the class, and (d) the representative parties
             will fairly and adequately protect the interests of the
             class.

These four elements of CR 23.01 are often summarized as numerosity,

commonality, typicality, and adequacy of representation. Hensley, 549 S.W.3d at

442-43. If all four elements are not present, the circuit court cannot certify the

class. United Propane Gas, Inc. v. Purcell, 533 S.W.3d 199, 203 (Ky. App. 2017).

             If the four requirements under CR 23.01 are met, the circuit court

must proceed to consider whether the requirements of CR 23.02 are met by finding

one of the following:

                                         -12-
            (a) The prosecution of separate actions by or against
            individual members of the class would create a risk of

                  (i) inconsistent or varying adjudications with
                  respect to individual members of the class
                  which would establish incompatible
                  standards of conduct for the party opposing
                  the class, or,

                  (ii) adjudications with respect to individual
                  members of the class which would as a
                  practical matter be dispositive of the
                  interests of the other members not parties to
                  the adjudications or substantially impair or
                  impede their ability to protect their interests;
                  or

            (b) the party opposing the class has acted or refused to
            act on grounds generally applicable to the class, thereby
            making appropriate final injunctive relief or
            corresponding declaratory relief with respect to the class
            as a whole; or

            (c) the court finds that the questions of law or fact
            common to the members of the class predominate over
            any questions affecting only individual members, and
            that a class action is superior to other available methods
            for the fair and efficient adjudication of the controversy.
            The matters pertinent to the findings include: (i) the
            interest of members of the class in individually
            controlling the prosecution or defense of separate actions;
            (ii) the extent and nature of any litigation concerning the
            controversy already commenced by or against members
            of the class; (iii) the desirability or undesirability of
            concentrating the litigation of the claims in the particular
            forum; (iv) the difficulties likely to be encountered in the
            management of a class action.

CR 23.02.

                                       -13-
             “If none of the three [CR 23.02 (a),(b), or (c)] is satisfied, the court

must deny class certification; if at least one condition is satisfied, the court may

certify the class.” Purcell, 533 S.W.3d at 203.

             Finally, the circuit court “must determine by order whether to certify

the action as a class action.” CR 23.03. In that order, the circuit court “must

define the class and the class claims, issues, or defenses, and must appoint class

counsel under CR 23.07.” CR 23.03(2) (emphasis added). The circuit court’s

determination that the prerequisites of CR 23.01 have been met must be supported

by adequate findings. Purcell, 533 S.W.3d at 203. “The United States Supreme

Court has held that a class action ‘may only be certified if the trial court is

satisfied, after a rigorous analysis, that the prerequisites of [CR 23.01] have been

satisfied.’ To do so, it may be necessary for the circuit court to ‘probe behind the

pleadings before coming to rest on the certification question.’” Id. (emphasis in

the original).

             In its order, the circuit court held that the numerosity requirement of

CR 23.01 was met, based on its finding that AT&T technicians had ordered

Rainbow Weed Killer for delivery to work centers located in over thirty cities

across the state of Kentucky. The circuit court noted that each work center covers

a surrounding geographic area, making the total number of class members more

than thirty, with some work centers covering highly populated areas such as

                                          -14-
Paducah, Louisville, and Pikeville. The circuit court also relied on AT&T records

showing that almost 13,000 pounds of Rainbow Weed Killer were delivered to

these thirty centers from 2012 to 2016, including more than 2,800 pounds to

Frankfort alone. Relying on the statement that the numerosity analysis must focus

on the impracticability of joinder the trial court concluded that “Given the wide

distribution of Rainbow Weed Killer by AT&T technicians, joinder of all members

would be impracticable without class certification.”

             The circuit court also held that the proposed class met the

commonality requirement, stating:

             Plaintiff’s proposed class consists of all owners whose
             real property contains Rainbow Weed Killer. In each
             instance, the same fact situation would be presented and,
             as a result of that use of Rainbow Weed Killer, potential
             plaintiffs would pursue the same legal theory to present
             his or her case. The questions are readily capable of
             class-wide resolution because they cut to Defendants’
             uniform course of conduct in applying Rainbow Weed
             Killer throughout Kentucky.

             The circuit court did not, however, mention or make any findings

regarding the elements of typicality and adequacy of representation under CR

23.01.

             The circuit court also did not adequately specify which section of CR

23.02 is applicable to the case. Feltner sought certification under CR 23.02(b) or

(c). The order quotes CR 23.02(b) but does not affirmatively state that this is the

                                        -15-
applicable alternative or make any findings to support such a determination. “The

necessity of distinguishing under which sub-part of CR 23.02 the class is certified

is more than just a mere formality. The notice the circuit court must send to

prospective class members differs depending on whether the class is certified under

CR 23.02(a), (b), or (c). See CR 23.03(4)(a) and (b).” Purcell, 533 S.W.3d at 203.

             Finally, the order does not fully comply with CR 23.03(2), which

states that “[a]n order that certifies a class action must define the class and the class

claims, issues, or defenses, and must appoint class counsel under CR 23.07.” CR

23.03(2). The circuit court’s order approves the class definition, but does not

define class claims, issues, or defenses except in its discussion of the commonality

requirement. The order does not appoint class counsel.

             The order is not adequate to support class certification because it does

not contain complete findings of fact as mandated by CR 23.01, does not specify

which section of CR 23.02 is applicable, and does not comply with CR 23.03. We

have not reviewed the circuit court’s findings as to numerosity and commonality

under CR 23.01 in order to avoid piecemeal or inconsistent results. “[B]ecause the

typicality, commonality, and adequacy prongs overlap in analysis,” the circuit

court “should revisit all prongs on remand to determine whether to certify a class.”

Nebraska Alliance Realty Company v. Brewer, 529 S.W.3d 307, 315 (Ky. App.

2017).

                                          -16-
                                   CONCLUSION

             The circuit court’s holding that Feltner’s definition of the putative

class does not violate the prohibition against fail-safe classes is affirmed. In all

other respects, its order is vacated. The case is remanded for the circuit court to

make complete findings under the four elements of CR 23.01 and, if these findings

support class certification, proceed to comply with the requirements of CR 23.02

and CR 23.03.

             ALL CONCUR.

BRIEFS FOR APPELLANTS:                          BRIEF FOR APPELLEE:

W. Blaine Early, III                            Jasper D. Ward IV
Marshall R. Hixson                              Alex C. Davis
Lexington, Kentucky                             Louisville, Kentucky

Marjorie A. Farris                              Randal A. Strobo
Chadwick A. McTighe                             Clay A. Barkley
Louisville, Kentucky                            Timothy J. Mayer
                                                Louisville, Kentucky
Clifford J. Zate, pro hac vice
Washington, D.C.

                                         -17-