Class Certification in Usury Case Brought by Second Mortgagees Against Trusts Affirmed
The Arkansas Supreme Court affirmed Greene County Judge David Burnett's class certification decision in Firstplus Home Loan Owner 1997-1, et al. v. Bryant, No. 07-740. The plaintiffs are consumers who took out promissory notes secured second mortgages on their homes. They allege that they paid usurious interest rates on their notes and that the defendants fraudulently charge recording fees on the loans. Judge Burnett certified five subclasses against a panoply of thirteen trusts.
The defendants challenged every Rule 23 factor on appeal: commonality, typicality, adequacy (although not the adequacy of class counsel), numerosity, predominance, and superiority. Notable holdings include that a challenge to predominance due to defenses--the holder-in-due course doctrine, counterclaims, and bankruptcy--are merits determinations and thus off-limits in the class certification phase.
The case represents a re-affirmation of Arkansas's permissive class action procedure.
