Arkansas Business Litigation Lawyer & Attorney : Allen Law Firm : Serving Little Rock, Fort Smith, North Little Rock

The Arkansas Supreme Court affirmed class action certification in ChartOne, Inc. v. Raglon, No. 07-940 (4/24/08).

 

ChartOne provides copying services of medical records for medical providers in Arkansas. Access to medical records for legal proceedings is controlled by Ark. Code Ann. § 16-46-106, which sets maximum charges for copying services. The class action complaint alleges ChartOne charged fees in excess of the statutory maximum and included a claim for deceptive trade practices pursuant to Ark. Code Ann. 4-88-101, et seq.  Because ChartOne applied the same practices to all its customers, the court easily affirmed class certification.

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After receiving notice of a pending coupon settlement in a class action against Little-Rock based cellular service provider Alltel, Frank DeJulius attempted to intervene in the action and object to the settlement. He did not, however, opt out of the settlement. The trial court denied his motion to intervene and his objection to the settlement, and today the Arkansas Supreme Court, via Justice Imber, affirmed.

Justice Imber first cited the general rule that "if a person seeking intervention will be left with the right to pursue his own independent remedy against the parties, regardless of the outcome of the pending case, then he has no interest that needs protecting by intervention of right." Justice Imber then noted that DeJulius could have opted out of the settlement and sued Alltell on his own. "By requesting exclusion [from the class], DeJulius would have maintained the right to pursue his own independent remedy." Because he failed to do so, he failed to satisfy Rule 24(a)(2)'s requirements.

DeJulius also stated that he received the class notice too late to be able to meaningfully review his options--arguing, in effect, that the late notice took away his right to opt out of the class. Justice Imber made short work of this argument, holding that DeJulius failed to make an adequate record.

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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.

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The Arkansas Supreme Court affirmed the trial court's reversal of administrative order in Arkansas Board of Collection Agencies v. McGhee, No. 07- 129 (1/17/08).

 

The case centered upon a class action against Russellville Check Express (RCE) for charging usurious interest. In 1999, Old Republic Surety Company issued a $50,000 bond to cover any violation of Arkansas law by RCE. Shortly after, Arkansas enacted the Arkansas Check-Cashers Act, A.C.A. § 23-52-101, et seq.  The class ultimately obtained a consent judgment against RCE, and they moved to recover against the bond. The ABCA conducted a hearing but denied recovery, stating the class had to show violations of either the ABCA's Rules or the Arkansas Check-Cashers Act. The trial court disagreed and reversed the decision.

 

The supreme court affirmed the reversal, finding that the bond was not as limited as the ABCA's interpretation. Because it covered any violation of Arkansas law, it applied to the class claims for usury.

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The Arkansas Supreme Court reversed class certification in Georgia-Pacific Corp. v. Carter, No. 07-105 (10/11/07).

 

Property owners filed a class action against Georgia-Pacific claiming nuisance. The plaintiffs alleged that toxic substances from the Georgia-Pacific plant in Crossett, Arkansas (seen below) caused injury to their property. The trial court certified the class.

 

The supreme court reversed, finding that common issues predominate over individual issues. The court observed that toxic tort cases, like products liability cases, are less often suitable for class action treatment. Because the essence of a nuisance claim is the interference with the property owner's use, the individual issues predominated, and this class action could not be certified.

 

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The Arkansas Supreme Court affirmed Hempstead County Circuit Judge Duncan Culpepper's grant of class certification in Johnson's Sales Company, Inc., et al. v. Wanda Harris, et al., No. 2006-1237. The Allen Law Firm serves as class counsel.

Harris is a class-action usury case against a group of corporations that own and operate Johnson's Warehouse Showroom in several Arkansas communities. The case alleges that Johnson's customers were charged usurious rates of interest. The customers signed Purchase Agreements that state, on their face, an "Annual Percentage Rate" greater than the applicable maximum rate of interest at the time the agreement was signed.

The opinion, written by Justice Corbin, rejects Johnson's arguments that "the circuit court abused its discretion in finding that the Rule 23 requirements of (1) commonality, (2) predominance, and (3) superiority were met."

The Court rejected Johnson's arguments that the Purchase Agreements at issue should be characterized as "retail installment contracts with pre-computed interest" and as such, the "true" interest rate charged depended on the history of payments under the note.

Justice Glaze wrote a dissenting opinion, which Chief Justice Hannah joined.

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The Arkansas Supreme Court affirmed class certification in Beverly Enterprises-Arkansas, Inc. v. Thomas, No. 06-877 (6/21/07).

 

Thomas filed a class action on behalf of 489 residents of the Batesville Nursing and Rehabilitation Center (an affiliate of Beverly Living Centers). The lawsuit stated claims for breach of contract, violations of the Arkansas Residents' Rights Act, medical malpractice and negligence. The trial court granted certification as to the statutory claims and breach of contract claims only.

 

The supreme court affirmed and made two key points to distinguish similar cases in other jurisdictions. First, Arkansas Rule 23 does not require the "rigorous analysis" of Federal Rule 23. Second, the class certification in this case does not extend to the personal injury claims, which will be addressed at the damages phase of the litigation.

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