Old Broadway Corp. v. Hjelle, 11328

• Decision Date: 12 August 1987
• Docket Number: No. 11328,11328
• Citation: 411 N.W.2d 81
• Parties: OLD BROADWAY CORPORATION, Paradiso of Bismarck, Inc., Select Inns of America, Inc., Edmond Lefreniere, dba Happy Host Inn, J.E.P., Incorporated, Wold Properties, Inc., and Fagerholt-Jackson, Inc., Plaintiffs and Appellants, and Dakota Bank & Trust Co., Plaintiff, v. Walter R. HJELLE as North Dakota State Highway Commissioner, Defendant and Appellee. Civ.
• Court: North Dakota Supreme Court

Page 81

411 N.W.2d 81

OLD BROADWAY CORPORATION, Paradiso of Bismarck, Inc., Select

Inns of America, Inc., Edmond Lefreniere, dba Happy Host

Inn, J.E.P., Incorporated, Wold Properties, Inc., and Fagerholt-Jackson, Inc., Plaintiffs and Appellants, and Dakota Bank & Trust Co., Plaintiff, v. Walter R. HJELLE as North Dakota State Highway Commissioner,

Defendant and Appellee.

Civ. No. 11328.

Supreme Court of North Dakota.

Aug. 12, 1987.

Daniel J. Crothers (argued) and Edmund G. Vinje II, of Vinje Law Office, Fargo, for plaintiffs and appellants.

Lamb, McNair, Larson & Carlson, Fargo, for Dakota Bank & Trust Co.; no appearance.

Robert E. Lane, Asst. Atty. Gen., Bismarck, for defendant and appellee.

VANDE WALLE, Justice.

This is an appeal from an order denying class-action status to a group of advertisers whose messages appear on highway signs scheduled for removal by the North Dakota State Highway Commissioner. We affirm.

In June of 1985 the North Dakota State Highway Commissioner ordered the removal of a class of highway signs identified as "interim permitted signs." A group of seven advertisers instituted an action against the Highway Commissioner seeking a writ of mandamus and a peremptory writ of prohibition or, alternatively, a temporary restraining order and preliminary injunction. The advertisers claim that the Highway Commissioner failed to classify and prioritize the signs pursuant to Section IX of the Right of Way Manual of the North Dakota State Highway Department and regulations promulgated under the Federal Highway Beautification Act. The district court issued a temporary restraining order preventing the removal of all interim permitted signs and denied a motion to dismiss brought by the Highway Commissioner.

The plaintiffs subsequently moved to have the case certified as a class action on behalf of all persons advertising on interim permitted signs. The Highway Commissioner resisted the motion and moved that the temporary restraining order be amended to apply only to the specific signs upon which the named plaintiffs advertise. The trial court denied the motion for class certification and amended the temporary restraining order to include only those signs upon which named plaintiffs had advertising messages displayed on November 5, 1985. The effective date of the amended restraining order was delayed for thirty days to allow other advertisers to intervene in the action. Thirty-two additional advertisers intervened as plaintiffs.

The sole issue on appeal is whether the trial court erred in denying the plaintiffs class-action status on behalf of all advertisers whose messages appear on interim permitted signs.

Although this court has concluded that it will interpret Rule 23, N.D.R.Civ.P., the "Uniform Class Actions Rule," so as to prove an open and receptive attitude toward class actions, and further indicated that it will not hesitate to overrule and reverse determinations denying class-action status in order to accomplish the remedial objectives of the class-action rule [Rogelstad v. Farmers Un. Grain Ter. Ass'n, 226 N.W.2d 370 (N.D.1975) ], ¹ the standard of review is, nevertheless, whether or not the trial court abused its discretion in certifying or refusing to certify actions as class actions. Rogelstad, supra; Saba v. Counties of Barnes, Benson, Etc., 307 N.W.2d 590 (N.D.1981). A trial court abuses its discretion when it acts in an unreasonable, arbitrary, or unconscionable manner. Saba, supra; In Interest of F.H., 283 N.W.2d 202 (N.D.1979). ²

Particular deference must be paid to the decision of the trial judge in this instance for he has previously presided over a closely related case involving the same signs as are at issue in this case. See Newman Signs, Inc. v. Hjelle, 317 N.W.2d 810 (N.D.1982). Nor are the courts of this State, including this court, unaware of the issues involved in this matter. See, in addition to Newman Signs, supra, Newman Signs, Inc. v. Hjelle, 268 N.W.2d 741 (N.D.1978), appeal dismissed, 440 U.S. 901, 99 S.Ct. 1205, 59 L.Ed.2d 449 (1979). The removal of these signs has been before the Federal courts as well. See Newman Signs, Inc. v. Sinner, 796 F.2d 247 (8th Cir.1986). And the removal and erection of signs by the owner of the signs in question have long been issues before our courts. See Newman v. Hjelle, 133 N.W.2d 549 (N.D.1965). See also Newman Signs, Inc. v. Hjelle, 300 N.W.2d 860 (N.D.1981).

The battle has now shifted to the lessees of the owner of the signs who are the plaintiffs in the current action, but this extensive history of litigation over the removal of signs by the owner of the signs in question was well known to the trial judge and he was the trial judge in several of the actions.

The remedial objectives promoted by Rule 23, North Dakota Rules of Civil Procedure, include:

"... the efficient resolution of the claims or liabilities of many individuals in a single action, the elimination of repetitious litigation and possibly inconsistent adjudications involving common questions, related events, or requests for similar relief, and the establishment of an effective procedure for those whose economic position is such that it is unrealistic to expect them to seek to vindicate their rights in separate lawsuits." Rogelstad, supra, 226 N.W.2d at 376, quoting Wright & Miller, Federal Practice and Procedure: Civil Sec. 1754.

Under Rule 23(b)(2) the trial court may certify an action as a class action if the following four requirements are satisfied:

1. The class is so numerous or so constituted that joinder of all members, whether or not otherwise required or permitted, is impracticable;

2. There is a question of law or fact common to the class;

3. A class action should be permitted for the fair and efficient adjudication of the controversy; and

4. The representative parties fairly and adequately will protect the interests of the class.

With regard to the third requirement, whether the class action should be permitted for the fair and efficient adjudication of the controversy, Rule 23(c)(1) lists several criteria to be considered by the trial court. While each of these criteria should be considered by the trial court, each need not be satisfied; nor need the trial court discuss in great detail all the criteria in its order. See Holloway v. Blue Cross of North Dakota, 294 N.W.2d 902 (N.D.1980).

The trial court found none of the four requirements under Rule 23(b)(2) to be satisfied and found six of the criteria listed under Rule 23(c)(1) to weigh against class certification. Basically, the following four reasons for denying class-action status were given throughout the trial court's opinion:

I. Joinder of all members is not impracticable.

II. Due to the differences in the advertising contracts with the sign owners, each advertiser may have interests different from the parties bringing the lawsuit.

III. Management of a class with the potential for constant changes in membership would pose unusual difficulties.

IV. Alternative methods of adjudicating the claims of the advertisers, such as requiring intervention, are not impracticable or inefficient.

Because we deem as controlling the determination that due to the differences in the advertising contracts with the sign owners each advertiser may have interests different from the parties bringing the lawsuit and the determination that the management of a class with the potential for constant changes in membership would pose unusual difficulties, we need not decide whether or not the trial court was correct in its determination that none of the requirements are satisfied.

In its memorandum opinion and order, the trial court, in considering the third factor, found:

"The third factor to be considered is whether a class action should be permitted for the fair and efficient adjudication of the controversy. Rule 23(c) provides criteria for the Court to consider when making this determination. The Court has considered and given proper weight to all the criteria. The Court finds that a class action would not provide for the fair and efficient adjudication of the controversy based on the following:

"1. That the joint or common interest does not necessarily exist among members of the class. R. 23(c)(1)(A). There is no reason to believe that all members of the putative class would have attitudes similar to the persons bringing this action. Once again, members of the putative class who wish to avail themselves of the opportunity to intervene may do so.

"2. That common questions of fact do not predominate over any questions affecting only individual potential class members. R. 23(c)(1)(E). The Plaintiffs in this action are lessees of advertising space located on sign structures. Such advertising is often not mandated to be placed on a specific location. It may be that each advertiser has different interests since lessees may be leasing significantly different numbers of sign structures or urging different messages on the viewing public. An advertiser may also come to the conclusion that his message is located on a sign that is the basis of this controversy and would prefer to avoid litigation that is potentially damaging to his cause.

"3. That other means of adjudicating the claims and defenses are not impracticable or inefficient. R. 23(c)(1)(F). The Plaintiffs have begun this action and any parties who wish to intervene may do so. This is the most practical way to proceed. Plaintiff Dakota National Bank and Trust Co. availed itself of the opportunity to intervene and any other potential plaintiff may do the same.

"4. That the class action does not offer the appropriate means of adjudicating the claims and defenses. R. 23(c)(1)(G). As discussed above, there may be different interests among the members of the class so a class action is not the most appropriate means.

"5. That potential members of the class do have a substantial interest in individually controlling the prosecution of separate...