Snyder Communications v. Magana

• Decision Date: 27 November 2002
• Docket Number: No. 13-02-076-CV.,13-02-076-CV.
• Citation: 94 S.W.3d 213
• Parties: SNYDER COMMUNICATIONS, Appellant, v. Josefina MAGANA, et al., Appellees.
• Court: Texas Court of Appeals

94 S.W.3d 213

SNYDER COMMUNICATIONS, Appellant, v. Josefina MAGANA, et al., Appellees.

No. 13-02-076-CV.

Court of Appeals of Texas, Corpus Christi-Edinburg.

November 27, 2002.

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Joe B. Harrison, Stacy R. Obenhaus, Gardere Wynne Sewell, Dallas, for appellant.

Bruce W. Hodge, Lisa M. Mount, Hodge, James & Hernandez, Harlingen, Thomas G. Hayfield, Law Offices of Thomas G. Rayfield, McAllen, for appellees.

Before Chief Justice VALDEZ and Justices YAÑEZ and CASTILLO.

OPINION

Opinion by Justice CASTILLO.

This is an interlocutory appeal from the trial court's order certifying a class and adopting a trial plan.¹ Appellees Josefina Magaña, Maria D. Escalon, Elvira Lorena Quiroga, Maria Luz Figueroa, Maria Isabel Lopez, Donna M. Rodriguez, and Nora Linda Dominguez sued their former employer, Snyder Communications, L.P., appellant ("Snyder"), for breach of contract and fraud. Appellees charge that Snyder failed to pay compensation due them pursuant to written, contractual representations made by Snyder at the time of appellees' employment. The compensation scheme provided that Snyder sales associates would receive commissions for each valid "Letter of Authority" they obtained from residential consumers to transfer long distance carrier service to AT & T with whom Snyder had a contractual relationship, and bonuses based on productivity.

Snyder contends on appeal that the trial court erred when it certified the class because: (1) the trial court failed to go beyond the pleadings in assessing the commonality required for a properly certified class action and in determining that common issues predominated over individual issues; (2) the trial court erroneously concluded that common issues predominated over individual issues and did not determine that a class action was a superior method for fair and efficient resolution of the claims; (3) the named plaintiffs will not fairly and adequately represent the interests of the class; and (4) the trial plan adopted by the trial court is inadequate in that it acknowledges that trial of the named plaintiffs' claims might not resolve the claims of the remaining class, it neither accounts for the defenses raised by Snyder nor includes a method of resolving Snyder's defensive issues, and it does not specify a formula or similar method for establishing proof of liability and damages. We affirm.

I. PROCEDURAL HISTORY

Appellees originally filed suit individually against Snyder on June 6, 2000. Snyder answered with a general denial on June 29, 2000. Appellees amended to assert a class action on April 3, 2001, alleging that: (1) the proposed class, consisting of persons who were employed by Snyder in the capacity of sales associate on or after April 3, 1997 and who had commissions denied in whole or in part, was so numerous as to make joinder of all members impractical ("numerosity"); (2) common questions of law or fact affected the class, including a common course of conduct by Snyder in fraudulently inducing appellees and unnamed class members to enter into employment contracts and in making material and false representations to each class member regarding commissions and bonuses ("commonality"); (3) the claims of the named plaintiffs were typical of the class in that all class members were employed as sales associates on a commission basis and all were denied their commission in whole or in part, so that the claims of the unnamed class members arose from the same course of conduct and misrepresentations as the claims of the named plaintiffs ("typicality"); (4) the named plaintiffs would fairly and adequately represent the interest of the class in that they were members of the class, they had expressed interest in representing the class, they had hired experienced litigation counsel who was willing to advance the costs of notice to the class, and they had no interests adverse to other members of the class ("adequacy of representation"); and (5) common questions of law or fact in the claimed fraudulent inducement and misrepresentations regarding commissions and bonuses predominated over any questions affecting only individual members ("predominance"), making a class action the superior method of resolving the claims ("superiority").

Snyder filed an amended answer on April 6, 2001 and interposed eleven "specific denials" denying each of the facts alleged in the amended petition, including the class-action allegations; three special exceptions; twenty affirmative defenses;² and a general denial. On April 9, 2001, appellees filed their motion for certification asserting that certification of the class was appropriate on numerosity, commonality, typicality, adequacy of representation, predominance, and superiority grounds. They submitted a proposed trial plan that same date.

Snyder filed its opposition to class certification on April 18, 2001, objecting on numerosity, commonality, typicality, adequacy of representation, predominance, and superiority grounds. Snyder did not object to appellees' proposed trial plan, nor did it submit its own proposed trial plan. It did file motions for summary judgment on April 17 and April 18, 2001. Also on April 18, 2001, appellees filed an amended certification motion. At the certification hearing on April 19, 2001, appellees introduced deposition testimony and documents in support of its motion. Snyder introduced no material. The court entered the challenged certification order and trial plan on January 3, 2002. This interlocutory appeal ensued.

II. CLASS ACTIONS IN TEXAS

A. The Nature of Class Actions

The class action serves as a mechanism to eliminate or reduce the threat of repetitive litigation, prevent inconsistent resolution of similar cases, and provide a means of redress for individual claims that are too small to make independent actions economically viable. Ford Motor Co. v. Sheldon, 22 S.W.3d 444, 452 (Tex.2000). The principal purpose of the class-action device is efficiency and economy of litigation. See id. (discussing the origins and general design of the class-action device). When properly used, a class action saves the court's and the parties' resources by allowing class-wide issues to be tried in an economical fashion. See id. (citing Gen. Tel. Co. v. Falcon, 457 U.S. 147, 155, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982)).

Thus, class actions furnish an efficient means for numerous claimants with a common complaint to obtain a remedy where it is not economically feasible to obtain relief within the traditional framework of a multiplicity of small individual suits for damages. Gen. Motors Corp. v. Bloyed, 916 S.W.2d 949, 952 (Tex.1996) (citing Deposit Guar. Nat'l Bank v. Roper, 445 U.S. 326, 339, 100 S.Ct. 1166, 63 L.Ed.2d 427 (1980)). Class actions also facilitate the spreading of litigation costs among numerous litigants with similar claims. Bloyed, 916 S.W.2d at 953 (citing U.S. Parole Comm'n v. Geraghty, 445 U.S. 388, 403, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980)).

However, the class-action format must not unduly restrict a party from presenting viable claims or defenses without that party's consent. Southwestern Ref. Co., Inc. v. Bernal, 22 S.W.3d 425, 435-36 (Tex.2000) (citing TEX.R. CIV. P. 815 and TEX. GOV'T CODE ANN. § 22.004(a)) (providing that state procedural rules may not abridge, enlarge, or modify the substantive rights of a litigant). Accordingly, the class-action device may not alter the parties' burden of proof, right to a jury trial, or substantive prerequisites to recovery. Bernal, 22 S.W.3d at 437.

A trial court's decision to certify a class can have "staggering economic consequences." Henry Schein, Inc. v. Stromboe, 46 Tex.Sup.Ct. J. 103, ___ S.W.3d ___, ___, 2002 WL 31426407, at *19 (October 31, 2002) (O'Neill, J., dissenting). Thus, even though it is an efficient device, the right to litigate a claim as a class action is not unfettered. Rule 42 of the Texas Rules of Civil Procedure provides that a trial court may certify a class action only if the plaintiff satisfies the requirements of the rule. TEX.R. CIV. P. 42; Sheldon, 22 S.W.3d at 452-53 (citing Weatherly v. Deloitte & Touche, 905 S.W.2d 642, 647 (Tex.App.-Houston [14th Dist.] 1995, writ dism'd w.o.j.), mandamus denied, 951 S.W.2d 394 (Tex.1997)).

B. The Statutory Requirements for Certification

A member of a class may sue or be sued as a representative party of the class only if all of the following requirements of Texas Rule of Civil Procedure 42(a) are satisfied: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. TEX.R. CIV. P. 42(a). Additionally, at least one of the enumerated requirements set forth in rule 42(b) must be met: (1) adjudication of separate actions would create a risk of inconsistent results or impairment of the interests of other members not parties to the adjudication; (2) the defendant has acted or refused to act on grounds applicable to the entire class; (3) the object of the action is the adjudication of claims affecting specific property involved in the action; or (4) common questions of law or fact predominate over any questions affecting only individual members, and a class action is the superior method of fairly and efficiently adjudicating the controversy. TEX.R. CIV. P. 42(b).

Rule 42 is patterned after its federal counterpart. Compare FED.R.CIV.P. 23 with TEX.R. CIV. P. 42. Consequently, federal decisions and authorities interpreting current federal class-action requirements are persuasive authority in applying rule 42. TEX.R. CIV. P. 42; Bernal, 22 S.W.3d at 433.

C. The Class...