Disc. Sleep of Ocala, LLC v. City of Ocala

• Citation: 245 So.3d 842
• Decision Date: 05 January 2018
• Docket Number: Case No. 5D17–497
• Parties: DISCOUNT SLEEP OF OCALA, LLC d/b/a Mattress Warehouse, Individually, and as a Representative of a Class of All Similarly Situated Others, and Dale W. Birch, Individually, etc., Appellants/Cross–Appellees, v. CITY OF OCALA, Florida, Appellee/Cross–Appellant.
• Court: Court of Appeal of Florida (US)

245 So.3d 842

DISCOUNT SLEEP OF OCALA, LLC d/b/a Mattress Warehouse, Individually, and as a Representative of a Class of All Similarly Situated Others, and Dale W. Birch, Individually, etc., Appellants/Cross–Appellees,

v.CITY OF OCALA, Florida, Appellee/Cross–Appellant.

Case No. 5D17–497

District Court of Appeal of Florida, Fifth District.

Opinion filed January 5, 2018

Rehearing Denied February 19, 2018

Derek A. Schroth, James A. Myers and Sasha O. Garcia, of Bowen/Schroth, Eustis, for Appellants/Cross–Appellees.

George Franjola and Patrick G. Gilligan, of Gilligan, Gooding, Franjola & Batsel, P.A., Ocala, for Appellee/Cross–Appellant.

ORFINGER, J.

Discount Sleep of Ocala LLC, d/b/a Mattress Warehouse, and Dale W. Birch, individually and as representatives of a putative class of others similarly situated (collectively "Appellants"), appeal from a non-final order denying class certification. We reverse the order denying class certification. On the City of Ocala's ("the City") cross-appeal, we affirm without further discussion.

FACTS

This case concerns the City's imposition of a fire service user fee charged to customers of its city-owned utility. Since 2006, the City has enacted several ordinances that established, repealed, and later reinstated the fire service user fees. In 2014, Appellants filed a class action lawsuit against the City, challenging the validity of Ordinance 2010–43, which repealed an earlier ordinance and reinstated the previously repealed fire service fees. The trial court dismissed Appellants' original complaint with prejudice based on the statute of limitations. This Court reversed the order of dismissal, concluding that Appellants' complaint was timely filed. See Disc. Sleep of Ocala, LLC v. City of Ocala, 200 So.3d 156, 157 (Fla. 5th DCA 2016).¹

On remand, Appellants filed a second amended complaint, seeking a declaration that the fire service user fee enacted by the City and collected from them and all other City utility customers as part of the monthly utility bill is invalid, illegal, and unconstitutional. Appellants further asked the court to order the City to refund the fees collected. Appellants also filed a second motion for class certification, which the trial court denied after conducting an evidentiary hearing. The trial court concluded that Appellants lacked standing to represent the putative class members, and that the class could not be certified because Appellants failed to satisfy the commonality, typicality, and adequacy prongs of the class certification test. The trial court further found that Appellants failed to prove that common issues predominated over individual questions and that a class action was the superior means of adjudicating the controversy. As we will explain, we disagree.

ANALYSIS

A. Standing.

The standing of a plaintiff to bring an action is a threshold inquiry that must be made before addressing whether the case is properly maintainable as a class action. Ferreiro v. Phila. Indem. Ins. Co., 928 So.2d 374, 376 (Fla. 3d DCA 2006). "A trial court's decision as to whether a party has satisfied the standing requirement is reviewed de novo." Sosa v. Safeway Premium Fin. Co., 73 So.3d 91, 116 (Fla. 2011).

"To meet the ... standing requirement, a plaintiff must have suffered an ‘injury in fact’ that is ‘distinct and palpable’; the injury must be fairly traceable to the challenged action; and the injury must be likely redressable by a favorable decision." Denney v. Deutsche Bank AG, 443 F.3d 253, 263 (2d Cir. 2006) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ; Whitmore v. Arkansas, 495 U.S. 149, 155, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990) ). The putative class representative must establish that a case or controversy exists between him or her and the defendant that will continue throughout the litigation. Id. at 117. A case or controversy exists if a party alleges an actual or legal injury that the relief sought will address. Id. Here, in their second amended complaint, Appellants alleged they and the other putative class members paid the fire service user fees that the City charged and continues to charge. Appellants have alleged an economic injury, fulfilling the actual injury requirement of standing in their claim for declaratory relief and damages against the City. See id. ("In this case, Sosa has suffered an economic injury, fulfilling the actual injury requirement of standing.").

The trial court erred in determining that the class should not be certified because the class could not include members who "paid the fire service user fee but who are no longer required to do so." Here, even if a customer no longer pays the fire service user fee, the customer would still be able to be part of the class, or subclass, if the customer paid the fire service user fee during the relevant time period. Those members suffered the same injury, i.e., their payment of the allegedly invalid fire service user fee; their injury is concrete and particularized; and their injury would be redressed by the requested refund.

B. Rule 1.220(a).

After establishing standing, but before a class may be certified, the trial court must conduct a "rigorous analysis" to determine whether the class representative and putative class members meet the requirements for class certification pursuant to Florida Rule of Civil Procedure 1.220(a).² Terry L. Braun, P.A. v. Campbell, 827 So.2d 261, 265 (Fla. 5th DCA 2002). These elements are commonly referred to as the numerosity, commonality, typicality, and adequacy of representation elements of class certification. InPhyNet Contracting Servs., Inc. v. Soria, 33 So.3d 766, 771 (Fla. 4th DCA 2010). The party seeking class certification bears the burden of satisfying all the requirements of rule 1.220(a). Campbell, 827 So.2d at 265. We review the trial court's order denying class certification for an abuse of discretion, but examine a trial court's factual findings for competent, substantial evidence, and review conclusions of law de novo. Sosa, 73 So.3d at 102–03, 105. "Although a trial court will generally be required to conduct an evidentiary hearing to determine whether to certify a class, the trial court's proper focus is on whether the requirements of rule 1.220 have been met and not on whether the moving party will prevail on the merits." City of Tampa v. Addison, 979 So.2d 246, 252 (Fla. 2d DCA 2007) ; see Sosa, 73 So.3d at 105 ; Morgan v. Coats, 33 So.3d 59, 63–64 (Fla. 2d DCA 2010).

1. Commonality.

The trial court found that Appellants failed to meet the commonality prong because some class members are no longer subject to the fee. As such, the trial court determined that their claims could not be based on the same legal theory as Appellants' theory.

The primary concern in determining commonality is whether the representative members' claims arise from the same practice or course of conduct that gave rise to the other claims, and whether the claims are based on the same legal theory. Sosa, 73 So.3d at 107. Importantly,

[t]he threshold of the commonality requirement is not high. See Broin v. Philip Morris Cos., Inc., 641 So.2d 888, 890 (Fla. 3d DCA 1994) (citing Jenkins v. Raymark Indus., Inc., 782 F.2d 468, 473 (5th Cir. 1986) ). A mere factual difference between class members does not necessarily preclude satisfaction of the commonality requirement. See Morgan, 33 So.3d at 64 (citing Leszczynski v. Allianz Ins., 176 F.R.D. 659, 671 (S.D. Fla. 1997) ). Individualized damage inquiries will also not preclude class certification. See id. at 65 ; Ouellette v. Wal–Mart Stores, Inc., 888 So.2d 90, 91 (Fla. 1st DCA 2004) ; Broin, 641 So.2d at 891 ("Entitlement to different amounts of damages is not fatal to a class action." (citing Cohen v. Camino Sheridan, Inc., 466 So.2d 1212, 1214 (Fla. 4th DCA 1985) )).

Id. Instead, the purpose of the commonality requirement is to determine "whether there is a need for, and benefit derived from, class treatment." Id. This requirement "is satisfied if the common or general interest of the class members is in the object of the action, the result sought , or the general question implicated in the action." Id.

In this case, Appellants challenge the validity of the fire service user fees that the City charged and continues to charge. They allege that they and the members of the putative class have a right to a refund of the unlawful fees paid to the City pursuant to the City's common course of conduct of uniformly billing and collecting the fire fees on its utility bills. It is immaterial that there are members of the proposed class who are no longer subject to the fee. Not all questions of law or fact raised in the litigation need be common because even a single common question will satisfy the commonality requirement. See Wal–Mart Stores, Inc. v. Dukes, 564 U.S. 338, 369, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011). "The requirement is met if the questions linking the class members are substantially related to the resolution of the litigation even though the individuals are not identically situated." Clausnitzer v. Fed. Exp. Corp., 248 F.R.D. 647, 656 (S.D. Fla. 2008) (quoting Collins v. Int'l Dairy Queen, Inc., 168 F.R.D. 668, 673–74 (M.D. Ga. 1996) ); see also Mohamed v. Am. Motor Co., LLC, 320 F.R.D. 301, 313–14 (S.D. Fla. 2017) (finding commonality requirement was satisfied where case revolved around common course of conduct and involved several overarching questions that were common to almost every member of class). While there may be some individualized damage differences, Appellants presented a common issue of law and fact regarding the City's collection of the fire service user fees on its utility bills, which satisfies the "low hurdle" commonality requirement. See Morgan, 33 So.3d at 64.

2. Typicality.

As to the typicality prong, the trial court determined that the testimony presented at the evidentiary hearing established that ad valorem taxes would likely be...