Opinion
NO. 2014-CA-001449-MR
02-23-2018
LA TONYA MOORMAN, PATRICIA LUSCO, SUSIE MAXWELL, WALES HUNTER, SHENEE WHITLOCK AND MARK LYNCH APPELLANTS v. LOUISVILLE METRO HOUSING AUTHORITY DEVELOPMENT CORP., TIMOTHY BARRY, LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT AND TED PULLEN APPELLEES
BRIEFS FOR APPELLANTS: Robert W. "Joe" Bishop John S. Friend Tyler Z. Korus Louisville, Kentucky BRIEF FOR APPELLEES, LOUISVILLE METRO HOUSING AUTHORITY AND TIMOTHY BARRY: Patricia C. Le Meur John F. Parker, Jr. Nicholas R. Hart Louisville, Kentucky BRIEF FOR APPELLEES, LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT AND TED PULLEN: Christopher P. O'Bryan Christopher J. Leopold Whitney R. Kramer Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE MITCH PERRY, JUDGE
ACTION NO. 11-CI-005645 OPINION
AFFIRMING
** ** ** ** **
BEFORE: JOHNSON, JONES AND NICKELL, JUDGES. NICKELL, JUDGE: La Tonya Moorman and five others (collectively "Appellants") filed this interlocutory appeal from an opinion and order entered by the Jefferson Circuit Court on August 13, 2014. Appellants allege their workplaces—three buildings housing government offices in Jefferson County, Kentucky—are contaminated by hazardous mold which has made them sick. They claim the buildings were not maintained, employees were not warned of dangers from prolonged exposure to toxic airborne mold, inadequate measures were taken to remediate mold, and, employees were falsely assured mold had been abated. The trial court denied the renewed request for class certification because none of the criteria listed in CR 23.01 and CR 23.02 were met. The trial court also denied a motion seeking clarification of an order entered on December 17, 2013, which granted partial summary judgment to two of the four appellees on claims related to the employer-employee relationship under KRS 342.690(1)—the exclusivity clause of the Kentucky Workers' Compensation Act. Following review of the briefs, the record and the law, we affirm.
Kentucky Rules of Civil Procedure.
Error is not alleged regarding denial of the requested clarification.
Kentucky Revised Statutes.
PROCEDURAL BACKGROUND
In August of 2011, Moorman and fourteen others (collectively "Plaintiffs") filed a purported class action complaint alleging a building at 768 Barret Avenue in Louisville was contaminated with toxic levels of hazardous mold to which they—current and former Louisville/Jefferson County Metro Government ("L/JCMG") employees—had been exposed for prolonged periods of time. Plaintiffs alleged Louisville Metro Housing Authority ("LMHA"), Ted Pullen, L/JCMG, and Timothy Barry (collectively "Appellees"), owners and operators of the building, ignored worker concerns about health hazards identified at the site. Plaintiffs filed suit on behalf of themselves as individuals and anyone else similarly situated. The complaint alleged common law negligence, negligent infliction of emotional distress, gross negligence, intentional infliction of emotional distress, private and public nuisance, trespass, assault and battery, fraudulent concealment and fraudulent misrepresentation. Plaintiffs demanded damages, injunctive relief and a declaratory judgment regarding Appellees' alleged liability.
LMHA's President and Executive Director.
Former Director of Louisville Metro Public Works; agent for L/JCMG.
Over time, the complaint was refined to include more Plaintiffs and more buildings. In September of 2012, citing CR 23.02(b) and (c), Plaintiffs moved for class action certification and appointment of class counsel. The proposed "class" was to include "[a]ll persons who have worked in the Buildings as employee or independent contractor of a commercial tenant at any time since January 1, 1993." Five "subclasses" were proposed—one for each of four separate buildings, and a fifth composed of those "who have suffered bodily injuries as a result of Appellees' actions as alleged in the Complaint." The motion claimed "[s]everal hundred individuals qualify as members of the class and subclass, making joinder of their claims impracticable." The motion further stated claims raised by Plaintiffs "are typical" of all claims; Plaintiffs will "fairly and adequately represent the interests of all"; common questions of law and fact affect all members of the class and subclasses and "predominate over any questions affecting individual members"; and finally, due to Appellees' acts of commission and/or omission, both injunctive relief and compensatory damages are appropriate.
In October of 2012, L/JCMG and Pullen moved for summary judgment arguing Plaintiffs' claims were barred by KRS 342.690(1). Plaintiffs opposed the motion, but on April 4, 2013, successfully sought leave to file their third amended complaint noting "the number of representational plaintiffs has been significantly reduced," one building has been removed from the complaint, and all damage claims subject to the Workers' Compensation Act have been deleted.
This complaint was brought by the six Appellants bringing this appeal—all of whom allege they suffered personal injury due to Appellees' conduct. This complaint pertains to only three buildings—proposing a separate subclass of employees and independent contractors for each building. A fourth subclass would include "[c]lass members who have suffered bodily injuries not otherwise covered by Kentucky's workers' compensation statute." The proposed class would encompass "[a]ll persons who have worked in the Buildings as employee or independent contractor of a commercial tenant at any time since January 1, 1993." The complaint alleges each subclass would number at least 100, and class membership would exceed 400.
Appellees again objected to class certification, characterizing the proposed class as "amorphous" with "extremely broad and variable categorizations [which] are too vague and too far-flung to constitute a class" and which defy the threshold requirements of CR 23. Appellees argued certification of a class was inappropriate because Plaintiffs allege they sustained various injuries in different buildings over a span of two decades. Moreover, because the alleged injuries run the gamut of health issues, Appellees maintain there are no "objective criteria" by which to identify the class—an essential requirement for certification. Gomez v. Illinois State Bd. of Educ., 117 F.R.D. 394, 397 (N.D. Ill. 1987). As argued by Appellees, a class was proposed of:
current and former Louisville Metro Government employees and independent contractors who worked at different locations, at various times, for different lengths of time, and who claim a wide array of injuries as a result of alleged mold exposure. In addition, the proposed class may also include any other members of the public who entered into any of the locations, at any time, for any length of time, and who may have unspecified symptoms or medical conditions. In short, there are no objective criteria by which to define or identify a "class."According to Appellees, if such a class were certified, "the Court or jury would be faced with a number of questions that are highly individualized in nature and call for plaintiff-specific information[,]" neither of which is a hallmark of a class action lawsuit. Gevedon v. Purdue Pharma, 212 F.R.D. 333, 336 (E.D. Ky. 2002) (certification unsuitable where court cannot readily define class and identify members).
On July 18, 2013, the trial court entered an opinion and order denying the motion for class certification because "[t]he exact size of the resulting class is unknown to the Court" now that those required to file a workers' compensation claim have been eliminated from the potential class. Additionally, the trial court found "Plaintiffs have not established that the class size is so numerous that joinder of all of the members is impractical under CR 23.01(a)."
On December 17, 2013, the trial court entered another opinion and order. This one granted summary judgment to L/JCMG and Pullen on three counts—common law negligence, negligent infliction of emotional distress and gross negligence. It further specified KRS 342.690(1) bars civil actions alleging workplace injuries, but does not address other claims raised in the complaint—namely declaratory judgment, intentional infliction of emotional distress and tort of outrage, third party beneficiary to lease agreement, private and public nuisance, trespass, assault and battery, fraudulent concealment, fraudulent misrepresentation, and injunctive relief—all of which may go forward as to the remaining Plaintiffs. The trial court then vacated the opinion and order it had entered on July 18, 2013, directing all parties to brief the CR 23 elements required for class certification and explain whether each had been satisfied.
On August 13, 2014, the trial court entered the opinion and order at the heart of this appeal. Analyzing the requirements of CR 23.01, the trial court concluded Appellants had not established any of the four mandatory requirements—numerosity, commonality, typicality, and adequacy of representation. The trial court then turned its attention to CR 23.02(b) and (c)—the two provisions Appellants claimed they had satisfied—determining neither had been established. Thereafter, the trial court denied Appellants' motions for class certification and to clarify the order entered December 17, 2013. This appeal follows.
ANALYSIS
We begin by noting the brief for Appellants does not strictly comply with CR 76.12(4)(c)(v) requiring each argument to "contain at the beginning of the argument a statement with reference to the record showing whether the issue was properly preserved for review and, if so, in what manner." Some, but not all of the arguments comply with the rule. Counsel is warned, anything less than full compliance is a risk to be avoided.
The question we address is whether the trial court properly denied class certification for failure to satisfy CR 23.01 and 23.02. Before granting certification, a trial court must undertake:
"rigorous analysis" of the claims, with the burden of proof remaining squarely on the party seeking class certification:
Nebraska Alliance Realty Company v. Brewer, 529 S.W.3d 307, 316 (Ky. App. 2017) (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2001)).A party seeking class certification must affirmatively demonstrate his compliance with the Rule—that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc.
We must affirm absent an abuse of discretion. Id. at 311; Sowders v. Atkins, 646 S.W.2d 344, 346 (Ky. 1983). Existence of an abuse of discretion is gauged by "whether the trial judge's decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Goodyear Tire and Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky. 2000) (citing Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999)). In reviewing the record and result, we defer to the trial court's factual findings and rulings because the trial court is best situated to evaluate the evidence. Miller v. Eldridge, 146 S.W.3d 909, 917 (Ky. 2004).
CR 23.01 and 23.02 govern class certification in Kentucky. CR 23.01 reads:
[s]ubject to the provisions of Rule 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.CR 23.02 reads in relevant part:
An action may be maintained as a class action if the prerequisites of Rule 23.01 are satisfied, and in addition:
. . .
(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.Together, these rules create a two-step process for certifying a class. First, a trial court must determine whether all four prerequisites of CR 23.01 are fulfilled. If any of the four is unsatisfied, class certification must be denied. If all four are met, the trial court then determines whether any condition stated in CR 23.02 is satisfied. If none of those three conditions is established, class certification must be denied. If at least one of the three conditions is met, the class must be certified. Due to similarities in CR 23 and its federal counterparts, Fed. R. Civ. Pro. 23(a) and (b), Kentucky courts frequently rely on federal caselaw to interpret CR 23. Brewer, 529 S.W.3d at 311.
We have omitted CR 23.02(a) because Appellants do not rely on that provision.
Federal Rules of Civil Procedure.
To establish numerosity, the moving party must demonstrate the class is so large joinder of all members would be impractical.
Consistent with his overall burden to show the prerequisites for a class action, the one who asserts the class must show some evidence or reasonable estimate of the number of class members. Whether a number is so large that it would be impracticable to join all the parties is dependent not upon any arbitrary limit, but rather upon the circumstances surrounding the case; and there must be a positive showing of such circumstances. The substantive nature of the claim, the type of class suit, and the relief requested also bear on how expansive a definition of the class will be allowed and, accordingly,
on the necessary showing of numerosity in relation to impracticability of joinder.Sowders, 646 S.W.2d 344, 346 (Ky. 1983) (quoting 3B Moore's Federal Practice 2d, 23.05(3)(a)(1), at page 23-161 through 23-166).
Appellants claim "400" or more qualify for class membership, but numerosity does not depend solely on a hard and fast number. The court must consider "the relationship of the numbers of the putative class members involved to their economic interests and all of the other circumstances peculiar to [each] case." Primavera Familienstiftung v. Askin, 178 F.R.D. 405, 410 (S.D.N.Y. 1998) (internal citation omitted). Impracticality is the linchpin. "Only when joinder is impracticable is there a need for a class action device." In re American Medical Systems, Inc., 75 F.3d 1069, 1079 (6th Cir. 1996) (quoting 1 Herbert B. Newberg & Alba Conte, Newberg on Class Actions, §3.01 at 3-4 (3d ed. 1992)) (certification wrongly granted where patients with penile implants used ten different devices).
Relying on Sowders, the trial court characterized the proposed class "of every employee who has worked in the Buildings since January 1st, 1993" and allegedly exceeding 400, as "simply too speculative to satisfy the numerosity requirement." We agree.
The second requirement of CR 23.01 is commonality of questions of law or fact. Appellants blithely state:
[q]uestions of law or fact common to members of the subclass predominate over any questions affecting only individual members, and a class action is superior to
other available methods for the fair and efficient adjudication of the controversy[.]Never do appellants identify any common question. Merely repeating the words of the rule in the motion for certification is insufficient. "[A]n adequate basis for each prerequisite must be pled and supported by the facts." Gevedon, 212 F.R.D. at 335. A fatal flaw in In re American Medical Systems, Inc. was generally alleging existence of "common issues without identifying any particular defect common to all plaintiffs." 75 F.3d at 1080-81.
To establish commonality,
class members must "'have suffered the same injury[,]'" and the claims must depend on a common contention capable of class-wide resolution, "which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011) (quoting General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 157, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982)).Brewer, 529 S.W.3d at 312. The complaint says common health issues include drowsiness, itchy eyes, skin irritation, headache, congestion and respiratory ailment, but never does it claim every potential class member—or even every Appellant—suffered from these identical maladies. Other health issues mentioned—which may influence a particular Appellant's recovery—are shortness of breath, laryngitis, sore throat, bacterial infections, neck stiffness, depression, leg weakness, hay fever, stress, allergies, poor sleep, stroke, hypertension, chest pains, kidney disease, arthritis, sleep apnea and GERD, to name a few.
. . . What is important to the inquiry is whether "the defendant's conduct was common as to all of the class members." Id. (internal quotation marks omitted) (citation omitted).
Lack of commonality was problematic in Newton v. Southern Wood Piedmont Co., 163 F.R.D. 625, 633 (S.D. Ga. 1995), where plaintiffs claimed exposure to chemicals in wood preservative caused a wide array of injuries. The Newton court found the proposed class definition relied on "subjective criteria" to identify class members and required "individualized medical determinations" because each putative class member was "exposed in a manner that is plaintiff-specific." The same would be true in this case, especially where one Appellant lived with a smoker for several years, potentially negatively impacting her health.
Furthermore, working in a particular building does not automatically mean every health condition experienced is attributable to that building. It is entirely possible home and leisure activities caused and/or exacerbated the illnesses complained of rather than the buildings—a fact which would require "individualized medical determinations" and detract from class cohesion.
We agree with the trial court's evaluation of commonality in this case:
similar individualized medical determinations would be required. Given that there are four buildings in question, the span of time in which the [Appellants] were injured is more than 20 years, and the proposed class size exceeds 400 members, any commonality between the claims fails
to rise to the level required to make it capable of certification. Thus, the commonality requirement of Rule 23.01 is not satisfied by [Appellants].
While the second amended complaint referenced four buildings; the third amended complaint references only three. The trial court's error in mentioning four buildings is not critical to our resolution and has not been criticized by any party. --------
Typicality is the third criteria—claims or defenses of the representative parties must be typical of the claims or defenses of the class.
While commonality examines the group characteristics of the class as a whole, typicality examines the individual characteristics of the named parties in relation to the class. Id. (citing Prado-Steiman v. Bush, 221 F.3d 1266, 1279 (11th Cir. 2000)). As with commonality, the claims need not be identical, and "cases challenging the same unlawful conduct which affects both the named plaintiffs and the putative class usually satisfy the typicality requirement irrespective of the varying fact patterns underlying the individual claims." Baby Neal for and by Kanter v. Casey, 43 F.3d 48, 58 (3d Cir. 1994). In other words:
the critical inquiry is whether the class representative's claims have the same essential characteristics of those of the putative class. If the claims arise from a similar course of conduct and share the same legal theory, factual differences will not defeat typicality.
Brewer, 529 S.W.3d at 312-13. This requirement ensures interests of the representative parties are aligned with those of the represented group. The theory being, by pursuing their own claims, named plaintiffs advance the interests of all class members. A typical claim arises from the same event, practice or course of conduct giving rise to claims of other class members. In re American Medical Systems, Inc., 75 F.3d at 1082.
Stirman v. Exxon Corp, 280 F.3d 554, 562 (5th Cir. 2002) (quoting James v. City of Dallas, 254 F.3d 551, 571 (5th Cir. 2001)).
Appellants claim they have shown typicality because:
their claims are based on the same core of operative facts as the claims of absent class members. In working as employees or independent contractors in the Buildings, [Appellants] have been exposed to actual and/or threatening injuries and continuing emotional distress as a result of [Appellees'] failure to address toxic levels of airborne mold and other contaminants.However, to satisfy the rule,
the named representatives must be able to establish the bulk of the elements of each class member's claims when they prove their own claims. General Tel. Co. of Southwest v. Falcon, 457 U.S. 147, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982). If proof of the representatives' claims would not necessarily prove all the proposed class members' claims, the representatives' claims are not typical of the proposed members' claims. Am/Comm Systems, Inc. v. American Tel. & Tel. Co., 101 F.R.D. 317, 321 (E.D. Pa.1984). Courts have repeatedly held representatives' claims to be atypical if they are grounded in factual situations differing from those of other class members.Brooks v. Southern Bell Tel. & Tel. Co., 133 F.R.D. 54, 58 (S.D. Fla. 1990). The trial court summarized the case at bar thusly,
[i]n this case, six named plaintiffs are representing a proposed class of more than 400 plaintiffs, covering a time period of more than 20 years, and alleging, at minimum, seven torts. Given the breadth of time and alleged injuries, this Court finds that there is no way the named plaintiffs can satisfy the typicality requirement of CR 23.01.We agree. Appellants have not demonstrated their claims are typical of the class.
The fourth mandatory showing under CR 23.01 is adequacy—the representative parties must "fairly and adequately protect the class's interests." Brewer, 529 S.W.3d at 313. This requirement has two prongs:
"1) the representative must have common interests with unnamed members of the class[;] and 2) it must appear that the representatives will vigorously prosecute the interests of the class through qualified counsel." Senter v. General Motors Corp, 532 F.2d 511, 525 (6th Cir. 1976). Though the adequacy prong overlaps some with the commonality and typicality prongs, the adequacy prong "also raises concerns about the competency of class counsel and conflicts of interest." General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 157 n.13, 102 S.Ct. 2364, 2370, 72 L.Ed.2d 740 (1982). See also In re Flag Telecom Holdings, Ltd. Securities Litigation, 574 F.3d 29, 35 (2d Cir. 2009) ("Adequacy 'entails inquiry as to whether: 1) plaintiff's interests are antagonistic to the interests of other members of the class and 2) plaintiff's attorneys are qualified, experienced and able to conduct the litigation.'") (quoting Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222 F.3d 52, 60 (2d Cir. 2000)).Brewer, 529 S.W.3d at 313. Again, we agree with the trial court's evaluation of this requirement:
[t]he proposed classes are too diverse to possibly be adequately represented by any of the named plaintiffs in this manner. As explained above, the number of proposed members, the expansive length of time, and the number of torts alleged make it impracticable for the six named plaintiffs and their counsel to adequately represent that disparate claims of the proposed class. Thus, the [Appellants] fail the representative requirement of CR 23.01.
Appellants having failed to establish any of the mandatory requirements of CR 23.01—let alone all four of them—the trial court properly denied certification of the class. Full satisfaction of CR 23.01 being a hurdle to clear prior to consideration of CR 23.02, there is no need to address whether CR 23.02(b) or (c) was satisfied—anything said would be advisory. See Commonwealth v. Terrell, 464 S.W.3d 495, 498-99 (Ky. 2015).
Appellants next argue certification was denied without an evidentiary hearing being convened. While it is true Appellants requested a hearing, counsel was unconvincing when the trial court asked what would be accomplished by holding one. Appellants cite no Kentucky case law—choosing to rely solely on federal cases—requiring a hearing prior to denial of class certification. While permitted, a pre-certification hearing is not required in Kentucky. See In re American Medical Sys., 75 F.3d at 1078-79.
Finally, as an alternative argument, Appellants fault the trial court for not sua sponte certifying particular issues for class treatment under CR 23.03(6). We are not cited to any point in the record at which the trial court was requested to do so. Counsel for L/JCMG and Pullen state in their brief the issue was not raised in the trial court, nor was it mentioned in the prehearing statement. "[A] new theory of error cannot be raised for the first time on appeal." Fischer v. Fischer, 348 S.W.3d 582, 588 (Ky. 2011) (quoting Springer v. Commonwealth, 998 S.W.2d 439, 446 (Ky. 1999)). This claim is not subject to review.
Discerning no abuse of discretion, we affirm the opinion and order entered by the Jefferson Circuit Court on August 13, 2014.
JOHNSON, JUDGE, CONCURS.
JONES, JUDGE, CONCURS IN RESULT ONLY WITHOUT SEPARATE OPINION. BRIEFS FOR APPELLANTS: Robert W. "Joe" Bishop
John S. Friend
Tyler Z. Korus
Louisville, Kentucky BRIEF FOR APPELLEES,
LOUISVILLE METRO HOUSING
AUTHORITY AND TIMOTHY
BARRY: Patricia C. Le Meur
John F. Parker, Jr.
Nicholas R. Hart
Louisville, Kentucky BRIEF FOR APPELLEES,
LOUISVILLE/JEFFERSON
COUNTY METRO GOVERNMENT
AND TED PULLEN: Christopher P. O'Bryan
Christopher J. Leopold
Whitney R. Kramer
Louisville, Kentucky