Ascencio v. Orion Int'l Corp.

• Decision Date: 15 May 2018
• Docket Number: DA 17-0353
• Citation: 417 P.3d 1094,391 Mont. 336,2018 MT 121
• Parties: Nissa ASCENCIO and All Others Similarly Situated, Plaintiffs and Appellants, v. ORION INTERNATIONAL CORP., Defendant, Appellee and Cross-Appellant.
• Court: Montana Supreme Court

391 Mont. 336

417 P.3d 1094

2018 MT 121

Nissa ASCENCIO and All Others Similarly Situated, Plaintiffs and Appellants,

v.ORION INTERNATIONAL CORP., Defendant, Appellee and Cross-Appellant.

DA 17-0353

Supreme Court of Montana.

Submitted on Briefs: February 14, 2018

Decided: May 15, 2018

For Appellants: Christopher W. Froines, Froines Law Office, Inc., Missoula, Montana

For Appellee: Bradley J. Luck, Tessa A. Keller, Garlington, Lohn & Robinson, PLLP, Missoula, Montana

Justice James Jeremiah Shea delivered the Opinion of the Court.

¶1 Plaintiff Nissa Ascencio ("Ascencio") appeals the denial of class certification by the Fourth Judicial District Court, Missoula County. We restate the issue on appeal as follows:

Whether the District Court abused its discretion by denying class certification on the basis that Ascencio failed to satisfy the M. R. Civ. P. 23(b)(3) element of superiority.

¶2 We affirm in part and remand to the District Court for further proceedings consistent with this Opinion.

PROCEDURAL AND FACTUAL BACKGROUND

¶3 Defendant Orion International Corporation ("Orion") was a small, family-owned Montana business that performed background checks on prospective employees at the request of employers. Orion’s principals were Donald and Patricia Whitney. Their son Kyle Whitney handled daily business operations.

¶4 In 2012, Ascencio applied for a job with St. Luke’s Hospital in Polson. St. Luke’s retained Orion to perform a background check of Ascencio. The background check Orion provided to St. Luke’s included "obsolete information," the inclusion of which was prohibited by § 31-3-112, MCA. The obsolete information consisted of Ascencio’s criminal history that reflected a 1997 arrest for forgery that resulted in two misdemeanor convictions in 1998. St. Luke’s hired Ascencio, and she worked there for approximately two years.

¶5 In 2015, Ascencio applied for a job with Missoula Bone and Joint. On May 20, 2015, Missoula Bone and Joint hired Ascencio, then retained Orion to perform a background check on her the following day. Again, the background check Orion provided to Ascencio’s employer contained prohibited obsolete information, including the two 1998-misdemeanor forgery convictions as well as a Chapter 7 bankruptcy filing that was discharged in 2000. Ascencio called Orion to ask why it would be releasing illegal background checks to a prospective employer in violation of § 31-3-112, MCA, that prohibits the disclosure of such obsolete information by reporting agencies. Kyle Whitney, the Orion employee with whom Ascencio spoke, responded that he would contact Orion’s attorney. On June 9, 2015, Orion issued a corrected background check of Ascencio to Missoula Bone and Joint that included the following disclaimer:

As mandated by Montana State Law, Orion International Corporation may not report Obsolete Information in any consumer report. Obsolete Information is defined as: Bankruptcy from more than 14 years of the most recent bankruptcy; judgments or suits from the longer of more than 7 years of the date of entry, or after the statute of limitations expiration; paid tax liens from more than 7 years of the date of payment; collections or accounts placed to profit and loss from more than 7 years ago; records of arrest, indictment, or conviction of a crime for more than 7 years of the disposition, release, or parole; or any adverse information from more than 7 years ago. Mont. Code. Ann. § 31-3-112.

¶6 Missoula Bone and Joint terminated Ascencio at the conclusion of her six-month probationary period, noting concerns with her background check and credit report, as well as requests for time off, not reporting when she left work early, and personality conflicts with a co-worker.

¶7 On September 23, 2015, Ascencio filed suit against Orion, asserting claims in her individual capacity, as well as a claim for class action. On October 29, 2015, Orion filed a Motion to Dismiss. On December 13, 2016, the District Court denied Orion’s Motion to Dismiss. On January 25, 2017, Orion responded to Ascencio’s first discovery requests, which included a list of individuals for whom Orion prepared background checks or other consumer reports. Ascencio identified at least 360 instances on this list in which Orion’s reports contained obsolete information in violation of § 31-3-112, MCA.

¶8 On February 1, 2017, Ascencio moved to certify the class. Ascencio attached Orion’s list with 360 names circled, defining the class as:

All persons in the state of Montana who had background or consumer reports generated by Orion International which contained obsolete information as defined under MCA § 31-3-112, from September 22, 2013 to present.

Ascencio argued the violations of Title 31, chapter 3, MCA, are common to all Plaintiffs and so similar that the illegality of all these provisions can be decided at one time in one proceeding rather than burdening the District Court with hundreds of separate cases. On March 24, 2017, the District Court denied Ascencio’s motion to certify the class, determining that Ascencio met all four of the M. R. Civ. P. 23(a) prerequisites but failed to establish predominance and superiority, as required by M. R. Civ. P. 23(b)(3). The District Court noted Ascencio failed to provide evidence to support factual assertions in her briefing specifically related to the superiority issue and Orion’s status as a business, which Ascencio claimed had changed and Orion had ceased operating as a Montana corporation and its principals had moved to Florida. On April 19, 2017, Ascencio moved to alter or amend the order denying class certification, asserting the District Court made a mistake of fact regarding Orion’s status. Ascencio attached as an exhibit Orion’s discovery responses from Orion’s February 7, 2017 Defendant’s Responses to Ascencio’s Second Discovery Requests in which answers acknowledge Orion ceased business operations and its principals moved to Florida.¹ On June 8, 2017, the District Court denied Ascencio’s motion to alter or amend.

¶9 Ascencio appeals the District Court’s denials of her Motion to Certify the Class and her Motion to Alter or Amend Order. Orion cross-appeals, arguing that the District Court correctly denied class certification on M. R. Civ. P. 23(b)(3) grounds, but that it erred in its determination that Ascencio satisfied the M. R. Civ. P. 23(a) prerequisites.

STANDARDS OF REVIEW

¶10 We review a district court’s decision on a motion for class certification for an abuse of discretion. Sangwin v. State , 2013 MT 373, ¶ 10, 373 Mont. 131, 315 P.3d 279 (citing Chipman v. N.W. Healthcare Corp. , 2012 MT 242, ¶ 17, 366 Mont. 450, 288 P.3d 193 ). The question is not whether we would have reached the same decision, but whether the district court acted arbitrarily without conscientious judgment or exceeded the bounds of reason. Sangwin , ¶ 10. A district court abuses its discretion if its certification order is premised on legal error. Mattson v. Mont. Power Co. , 2012 MT 318, ¶ 17, 368 Mont. 1, 291 P.3d 1209. When a district court’s decision is not supported by findings as to the applicability of M. R. Civ. P. 23 criteria, it is not entitled to the traditional deference given to determinations of class status. Mattson , ¶ 17. If the district court bases its M. R. Civ. P. 23 ruling on a finding of fact, we review that finding of fact, like any other finding of fact, for clear error. To the extent that the ruling involves an issue of law, we review the District Court’s application of law de novo. Mattson , ¶ 17 (citing Miles v. Merrill Lynch & Co. , 471 F.3d 24, 40–41 (2d Cir. 2006) ).

DISCUSSION

¶11 Whether the District Court abused its discretion by denying class certification on the basis that Ascencio failed to satisfy the M. R. Civ. P. 23(b)(3) element of superiority.

¶12 Class action suits are the "exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Sangwin , ¶ 12 (quoting Comcast Corp. v. Behrend , 569 U.S. 27, 33, 133 S.Ct. 1426, 1432, 185 L.Ed.2d 515 (2013). If the class representative is part of the class with the same interest and injury as class members, departure from the usual rule is justified. Sangwin , ¶ 12 (citing Jacobsen v. Allstate , 2013 MT 244, ¶ 27, 371 Mont. 393, 310 P.3d 452 ). Class action suits save courts and parties resources by allowing issues that affect every class member to be litigated in an economical fashion. Sangwin , ¶ 12 (citing Jacobsen , ¶ 27 ).

¶13 The party seeking certification bears the burden of showing the proposed class satisfies M. R. Civ. P. 23. Byorth v. USAA Cas. Ins. Co. , 2016 MT 302, ¶ 16, 385 Mont. 396, 384 P.3d 455. A trial court’s evaluation of a proposed class may need to probe beyond the pleadings to determine class certification suitability; and certification entails a "rigorous analysis" that may touch on the merits of the claim. Byorth , ¶ 16. However, we caution "courts against assessing ‘any aspect of the merits unrelated to Rule 23 requirements.’ " Byorth , ¶ 16 (quoting Sangwin , ¶ 15 ). The rigorous analysis necessary to certify a class action fundamentally consists of two principles: first, the trial court must have some evidentiary basis for determining the moving party satisfied each M. R. Civ. P. 23 requirement; and, second, the trial court has broad discretion at the certification stage. Byorth , ¶¶ 17–19 (citing Comcast Corp. 569 U.S. at 33, 133 S.Ct. at 1432 ).

¶14 Although deferential to the trial court’s determinations, we cannot affirm class certification when the record lacks evidence to support a M. R. Civ. P. 23 requirement. Byorth , ¶ 18. " Rule 23 does not set forth a mere pleading standard." Wal-Mart Stores, Inc. v. Dukes , 564 U.S. 338, 350, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011), quoted in Byorth , ¶ 17. Thus, a trial court may not simply rely on the allegations of the parties’ pleadings. Byorth , ¶ 17 ; Morrow v. Monfric, Inc. , 2015 MT 194, ¶ 10, 380 Mont. 58, 354 P.3d 558 (determini...