St. Louis Southwestern Ry. Co. v. Voluntary Purchasing Groups, Inc.

• Decision Date: 25 July 1996
• Docket Number: No. 06-96-00005-CV,06-96-00005-CV
• Citation: 929 S.W.2d 25
• Parties: ST. LOUIS SOUTHWESTERN RAILWAY COMPANY, Southern Pacific Transportation Company, and Sammie Brown, et al., Appellants, v. VOLUNTARY PURCHASING GROUPS, INC., Bonny Corporation, and Meridian Housing Company, Appellees.
• Court: Texas Court of Appeals

Page 25

929 S.W.2d 25

ST. LOUIS SOUTHWESTERN RAILWAY COMPANY, Southern Pacific

Transportation Company, and Sammie Brown, et al., Appellants, v. VOLUNTARY PURCHASING GROUPS, INC., Bonny Corporation, and Meridian Housing Company, Appellees.

No. 06-96-00005-CV.

Court of Appeals of Texas,

Texarkana.

Submitted April 10, 1996.

Decided May 13, 1996.

Order Overruling Rehearing

July 25, 1996.

Windle Turley, R. Christopher Cowan, Law Offices of Windle Turley, David Weiner, Dallas, for Sammie Brown, et al.

Mark Calhoun, Calhoun & Stacy, Dallas, for St. Louis Southwestern Railway Co., Southern Pacific Transportation Company.

Jeff Thomas, Greenville, for Henry Swindell, et al.

Roger D. Sanders, Sanders Mumm O'Hanlon Motley, Sherman, Winford L. Dunn, Jr., Dunn, Nutter, Morgan, Shaw, Texarkana AR, Joseph F. Guida, Guida, Slavich, Flores, Dallas, for Voluntary Purchasing et al.

OPINION

GRANT, Justice.

St. Louis Southwestern Railway Company, Southern Pacific Transportation Company, and individuals too numerous to list, all of whom were designated as involuntary plaintiffs, appeal from their unwilling addition to this suit by a class certification. The appellees consist of Voluntary Purchasing Group, Inc., the Bonny Corporation, and Meridian Housing Company, which is the successor corporation to Universal Chemical Company, which is the successor corporation to Hi-Yield Fertilizer Company, Inc., and Hi-Yield Chemical Company, Inc., who were named as defendants in the suit below, and numerous individuals who brought the suit as plaintiffs and who sought class certification.

The appellants contend that the trial court erred because:

1) no class certification hearing was held;

2) notice of proposed class certification was not given 3) no pleading or proof of TEX.R.CIV.P. 42(b)(1)(A) was made;

4) no pleading or proof of a limited recovery fund was made, thus 42(b)(1)(B) could not apply;

5) the settlement/injunction order entered by the trial court after the appeal was filed was improper; and

6) even if that order was properly entered, the injunction must be reversed because the movants did not comply with the Rules of Civil Procedure in obtaining the order.

Appellees bring cross-points in which they contend that the appeal was not properly taken because no final order was entered by the court and that the appeal bond is inadequate.

Voluntary Purchasing Group (hereafter VPG) ¹ is a company that, in its corporate past, is alleged to have released various toxic chemicals into the environment. The defendants allegedly acted together in maintaining a toxic dump near Sulphur Springs. The plaintiffs claim injury due to the alleged release of arsenic and defoliants, including dioxin and agent orange into the environment. VPG is a defendant in sixteen lawsuits brought by over a thousand allegedly injured parties in various counties of Texas. The class action presently before this Court is lawsuit number seventeen.

The appellants in this case are plaintiffs in other lawsuits who have been brought unwillingly in as members of the class action. The appellees consist of the plaintiffs who initiated the class action and the defendants named in the class action. The time sequence of the petition, answer, and order was unusually close.

Plaintiffs (appellees) filed their original petition at 11:29 a.m., December 21, 1995, and filed a motion for class certification at 11:29 a.m. On that same date, VPG filed its answer at 11:34 a.m., and at 11:53 a.m. the class certification order signed by the trial judge was filed.

In that order, the trial judge acknowledged the filing of the action and stated that:

The same having been duly considered by the Court after presentation of legal citation and oral argument by the parties hereto, and supported adequately, to the extent necessary, by evidence or referenced evidence, including the existence of a proposed class settlement, the Court finds that the requirements of TRCP Rule 42(a), (b)(1)(A), (b)(1)(B) have been met.... ²

IT IS THEREFORE ORDERED AND DECREED that the motion of Plaintiffs for class certification, supported by the Defendants, be and it is hereby granted, and that this action is certified as a class action, pursuant to the provisions of TRCP Rule 42 and subject to further order of the Court on behalf of all persons who, through the trial court's final approval of Class certification herein, claim on behalf of themselves or others any right of recovery against any of the Defendants or their privies as a result of any acts or omissions relating to the facilities owned or operated by any said Defendant or its privies....

....

IT IS FURTHER ORDERED that the attorneys ... submit to the Court a Proposed Form and Order of Notice to be given to Class members for the purpose of determining any objections to a proposed settlement of this matter, all subject to further order of the Court.

An appeal bond was filed by the attorney for some of the unwilling members of the class on January 10, 1996. On January 11, the trial court signed an "Order Preliminarily Approving Settlement, Certifying Temporary Class for Settlement, and Approving the Form and Manner of Notice." The order covers a number of areas, including the form of notice to be given to potential claimants. It concludes by enjoining the plaintiffs in the other sixteen lawsuits from prosecuting those actions against VPG and also purports to stay those lawsuits "in aid of this Court's jurisdiction over the Class Members, VPG, and the pending class action settlement." The court goes on to state that "Class Members are not entitled to opt out of the Class, which is mandatory pursuant to Tex.R.Civ.P. 42(b)(1)(A) and 42(b)(1)(B), and the Notice of Settlement therefore does not provide the right to opt out of the Class.

CROSS-POINTS

Because the cross-points raised by appellees are jurisdictional in nature, we first address those points, reserving appellant's points for later discussion. We first address VPG's contention that no final order has been entered and that the appeal is therefore premature, being from a mere "preliminary" decision of the trial court.

TEX.R.CIV.P. 42(c)(1) provides that a trial court will "[a]s soon as practicable after the commencement of an action brought as a class action ... after hearing, determine by order whether it is to be so maintained." There is no question that the trial court acted immediately after the commencement of the action. Counsel points out that the order has language suggesting that some other ruling may eventually be made about the propriety of proceeding as a class and that this language causes the order to lack finality. This argument disregards the remainder of Rule 42(c), which states that "[t]his determination [of the propriety of proceeding as a class] may be altered, amended, or withdrawn at any time before final judgment."

By its very definition under the statute, a trial court's determination that an action should proceed as a "class action" is never absolutely final until the final judgment is entered. Thus, the language found in the various orders identifying the group as a "temporary class" has no meaning beyond that provided in the statute.

To adopt the argument of appellee in this regard would eviscerate TEX.CIV.PRAC. & REM.CODE ANN. § 51.014(3) (Vernon Supp.1996), which expressly permits an appeal from an order that certifies or refuses to certify a class. Indeed, there is authority suggesting that although a party can appeal from an order that certifies or refuses to certify a class, if the party does not appeal from the first version of the order, a later amended version of the order expanding the class may not be appealable, except perhaps so far as it changes the original order. Pierce Mortuary Colleges v. Bjerke, 841 S.W.2d 878 (Tex.App.--Dallas 1992, writ denied). Appellee's cross-point is without merit.

VPG further contends by cross-point that the bond is inadequate, being signed by an attorney rather than by a party as the principal. VPG cites Bailey v. Capitol City Trade and Technical School, 777 S.W.2d 558 (Tex.App.--Austin 1989, no writ), as providing that the party appealing must execute the bond as principal. That rendition ignores a plethora of problems discussed by the Austin court. In the Bailey case, the attorney signed as both principal and surety and stated that he did not even know if his clients wished to appeal. Based on that state of affairs, the Austin court held that the bond was inadequate, but also noted that the party appealing may have the bond executed by someone having legal authority to act for him.

A court of appeals has jurisdiction over an appeal when the appellant makes a bona fide effort to perfect the appeal. City of San Antonio v. Rodriguez, 828 S.W.2d 417 (Tex.1992). Even if some fatal error had occurred, the party would therefore have the opportunity to cure the error by amendment. In this case, out of an abundance of caution, we have required the attorney who signed as principal to file documents reflecting his authority to act on behalf of the appellant. The bond requires no amendment and is proper and sufficient. This cross-point is overruled.

APPELLANT'S POINTS OF ERROR

Mandatory Class Certification

We now turn to the complaints raised by appellants. In any review of a class certification, this Court should reverse the certification order only if the record shows a clear abuse of discretion. American Express Travel Related Servs. Co. v. Walton, 883 S.W.2d 703, 711 (Tex.App.--Dallas 1994, no writ). An abuse of discretion is shown if the trial court acts without reference to any guiding principles or acts arbitrarily or unreasonably. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242 (Tex.1985), cert. denied, 476 U.S. 1159, 106 S.Ct. 2279, 90 L.Ed.2d 721 (1986). A clear failure by a trial court to analyze or apply the law correctly is an abuse of discretion. Walker v. Packer, 827 S.W.2d 833, 840 (Tex.1992)...