Northview Const. Co. v. City of St. Clair Shores, 12

• Decision Date: 30 December 1976
• Docket Number: No. 12,12
• Citation: 249 N.W.2d 290,399 Mich. 184
• Parties: NORTHVIEW CONSTRUCTION COMPANY, a Michigan Corporation, et al., Plaintiffs-Appellants, v. CITY OF ST. CLAIR SHORES, a Municipal Corporation organized and existing under the laws of the State of Michigan, Defendant-Appellee. 399 Mich. 184, 249 N.W.2d 290
• Court: Michigan Supreme Court

Page 290

249 N.W.2d 290

399 Mich. 184 NORTHVIEW CONSTRUCTION COMPANY, a Michigan

Corporation, et al., Plaintiffs-Appellants, v. CITY OF ST. CLAIR SHORES, a Municipal Corporation organized and existing under the laws of the State of

Michigan, Defendant-Appellee.

No. 12.

399 Mich. 184, 249 N.W.2d 290

Supreme Court of Michigan.

Dec. 30, 1976.

Honigman, Miller, Schwartz & Cohn, Detroit (Norman Hyman and John Sklar, Detroit, of counsel), for plaintiffs-appellants.

John H. Yoe, Detroit, for defendant-appellee.

Laurence M. Scoville, Jr., Richard C. Marsh, Robert L. Weyhing, III, Clark, Klein, Winter, Parsons & Prewitt, Detroit, amicus curiae requesting modification of opinion.

Nathan B. Goodnow, James W. Collier, Dykema, Gossett, Spencer, Goodnow & Trigg, Detroit, for amicus curiae Michigan Savings and Loan League.

COLEMAN, Justice.

The Court of Appeals opinion Northview Construction Co. v. City of St. Clair Shores, 44 Mich.App. 614, 205 N.E.2d 895 (1973) correctly phrased the issue in this case:

'Where the named plaintiffs in a class action pursuant to GCR 1963, 208.1(3) secure judgment in their favor alone, prior to the intervention of any other member of the class, did the trial court err in dismissing the class action?'

Like that Court, I conclude the answer is 'no'.

As noted by the Court of Appeals, the named plaintiffs were granted summary After the named plaintiffs in the class action were 'gone from the scene', the trial court ordered notice by publication. Plaintiffs challenge the type of notice ordered. However, it is not necessary to rule on the form of notice because prior to the first appeal 'the trial court could have determined that there was not adequate representation from the mere fact that the named plaintiffs had departed from the suit prior to the appearance of any other member of the class, and thus obviating the necessity of notice to the other members of the class . . ..' ¹

judgment on their claims alone. Further, '(t)hese judgments were satisfied, but without any order continuing the litigation as a class action.'

The memorandum opinion terms the Court of Appeals holding 'a priori reasonable'. However, it says the holding is 'overbroad' under federal case law. My reading of the federal cases does not support the opinion that the withdrawn named plaintiffs may adequately represent a class in this case.

The cases cited by the memorandum opinion, and many others not cited, do stand for the proposition that a plaintiff whose individual claim has been rendered moot may continue to represent a class. However, these cases involve the unique situation of a constitutional challenge to a state or federal statute, or an alleged misapplication of a statute.

In Thomas v. Clarke, 54 F.R.D. 245 (Minn.1971), cited by the memorandum opinion, the named plaintiff started a class action in federal court challenging the constitutionality of a state claim and delivery statute. The statutory action against the plaintiff was settled in state court. Defendant argued that plaintiff's federal case was rendered moot. The court rejected the claim of mootness with little discussion, citing several supporting cases. The plaintiff was allowed to continue as a proper representative of the class action.

In Frost v. Weinberger, 375 F.Supp. 1312 (E.D.N.Y.1974), Reversed on other grounds, 515 F.2d 57 (2d Cir. 1975), ² also cited by the memorandum opinion, the plaintiff challenged the constitutionality of actions which decreased social security survivors' benefits without a prior hearing. The plaintiff was given a hearing subsequent to starting the class action. The Court held that 'mootness of an individual plaintiff's claim will not necessarily render the class action moot'. The Court said 'the touchstone for determining mootness is the likelihood that the behavior complained of will not recur.' The class action was not moot because the Social Security Administration continued to use procedures that did not provide for a prereduction hearing. The Court commented on the rationale underlying the mootness rule in such class actions:

'If the rule were otherwise, a defendant might easily circumvent the judicial resolution of an important constitutional issue simply by settling the individual case of the representative plaintiff. Fortunately, the courts will not permit a defendant to use the doctrine of mootness as a vehicle to evade the resolution of key constitutional questions.'

To the same effect, and cited by the memorandum opinion, see Huff v. N. D. Cass Co., 485 F.2d 710 (5th Cir. 1973) (class action civil rights suit); Stokes v. Bonin, 366 F.Supp. 485 (E.D.La.1973) (challenge to food stamp benefit reduction without hearing); Wymelenberg v. Syman, 54 F.R.D. 198 (E.D.Wis.1972) (constitutional challenge of state residency requirement for divorce).

Other cases, cited in those cases relied upon by the memorandum opinion, carry the same message. See Steinberg v. Fusari, 364 F.Supp. 922 (Conn.1973), Vacated and remanded on other grounds, 419 U.S. 379, 95 S.Ct. 533, 42 L.Ed.2d 521 (1975) (constitutional challenge of state unemployment compensation termination procedures where named plaintiffs did have hearings, but class action continued because the unconstitutional procedure could recur); Torres v. New York State Department of Labor, 318 F.Supp. 1313 (S.D.N.Y.1970) (where the court stressed the 'danger that the defendants could always grant the named plaintiff a hearing and then claim that the matter is moot or the plaintiff not representative in an effort to evade a judicial determination of the underlying constitutional issues'); Kelly v. Wyman, 294 F.Supp. 893 (S.D.N.Y.1968), 1968), affirmed Sub nom. Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970) (constitutional challenge of welfare benefits termination without prior hearing where named plaintiffs could continue class action because of the important constitutional question); Davis v. Caldwell, 53 F.R.D. 373 (N.D.Ga.1971) (constitutional challenge of workmen's compensation benefits termination without prior hearing with same result as Torres, supra, and Kelly, supra); Gatling v. Butler, 52 F.R.D. 389 (Conn.1971); Knowles v. Butz, 358 F.Supp. 228 (N.D.Cal.1973) (class action countinued although named plaintiff's claim was moot because the alleged misinterpretation of a statute could recur); Crow v. California Department of Human Resources, 325 F.Supp. 1314 (N.D.Cal.1970), Reversed on other grounds, 490 F.2d 580 (9th Cir. 1973) Certiorari denied, 408 U.S. 924, 92 S.Ct. 2495, 33 L.Ed.2d 335 (1972) (possible recurrence allowed to continue class action); Vaughan v. Bower, 313 F.Supp. 37 (D.Ariz.1970) Affirmed, 400 U.S. 884, 91 S.Ct. 139, 27 L.Ed.2d 129 (1970) (class action continued although named plaintiff's claim was moot because the problem could recur and 'defendant cannot, by his own voluntary conduct * * * deprive the Court of jurisdiction'); Gaddis v. Wyman, 304 F.Supp. 717 (S.D.N.Y.1969), Affirmed sub nom. Wyman v. Bowens, 397 U.S. 49, 90 S.Ct. 813, 25 L.Ed.2d 38 (1970) (class action continued because of recurrence); Jenkins v. United Gas Corp., 400 F.2d 28 (5th Cir. 1968). ³

But see Watkins v. Chicago Housing Authority, 406 F.2d 1234 (7th Cir. 1969).

The cases relied upon by the memorandum opinion only stand for the proposition that a class action may continue where the named plaintiff's claim is moot and where a statute or procedure is challenged on grounds of constitutionality or misapplication. If a moot claim is continued as a class action, two reasons usually are present: (1) possible recurrence of the alleged illegality, and (2) prevention of defendant from stopping a class action and continuing unconstitutional or illegal practices by rendering the named plaintiff's claim moot.

The instant case does not fall within either of the reasons for applying the rule in question. Recurrence of the illegality presents no problem. Defendant has not attempted to continue an unconstitutional or illegal practice by rendering the named plaintiff's claim moot through settlement. We are not faced with the picture of a defendant able to stay out of court perpetually and to circumvent judicial resolution of important issues by settling the individual case of the representative plaintiff.

Moreover, the character of the instant case is far different from that of the federal cases. The instant case is not concerned with an important constitutional question as are most of the federal cases. Collection In the factual situation presented by the instant case, it is especially important that any class action have proper representatives. As the Court of Appeals noted, there are special circumstances present which tend to indicate that potential class members may desire not to continue the suit. Proper representatives should be required--not the withdrawn named plaintiffs who are presumably happy with their satisfied judgments.

of money is the focus here, not an allegedly unconstitutional practice.

After fifteen years, this litigation should be given a prompt burial.

I would affirm the Court of Appeals.

LINDEMER and RYAN, JJ., concur.

FITZGERALD, J., not participating.

OPINION FOR REVERSAL

Plaintiffs appeal the dismissal of their class action against defendant City of St. Clair Shores. This cause was instituted in 1960. It has twice been before the Court of Appeals. A brief review of the prior proceedings is necessary for a proper understanding of the issues now before us.

In Merrelli v. St. Clair Shores, 355 Mich. 575, 96 N.W.2d 144 (1959), this Court held unlawful certain amendments to the St. Clair Shores building code on the grounds that they established an illegally excessive building permit fee schedule. No refund issue was present in the Merrelli case. After Merrelli some unrelated and independent individual actions were instituted by various builders to recover illegal building permit fees already paid to the city. One such...