Summary
upholding trial court's order denying certification when the breach of contract claim "could require individual inquiries to the extent that oral representations might have formed some or all of a class member's contract"
Summary of this case from Glencrest Res., LLC v. EllisOpinion
No. 01-02-00017-CV.
Opinion issued March 30, 2004.
On Appeal from the 270th District Court, Harris County, Texas, Trial Court Cause No. 2000-39257.
Brady S. Edwards and W. David George; Edwards George, LLP; Houston, Elaine B. Roberts, Richard Jennings Burch and William H. Bruckner, Bruckner, Burch, PLLC; Houston for appellant.
David Burke Harberg, Houston for appellee.
MEMORANDUM OPINION
Appellants, Douglas Spector, Ana Spector, Julia Hollenbeck, David Killough, and Rodger Peters (collectively, "appellants"), appeal from the trial court's order refusing to certify two classes in appellants' lawsuit against appellee, Norwegian Cruise Line Ltd. d/b/a Norwegian Cruise Line ("NCL"). See Tex. Civ. Prac. Rem. Code Ann. § 51.014(a)(3) (Vernon Supp. 2004). We affirm.
Background
Appellants are mobility-impaired individuals who use scooters or wheelchairs and those individuals' traveling companions. Appellants were passengers on one of two NCL vessels, the NORWEGIAN SEA and the NORWEGIAN STAR, on NCL's "Texaribbean Cruise," which departed from the Port of Houston and sailed to Cancun or Calica, Cozumel, and Roatan.
Appellants alleged (and at the certification hearing produced supporting evidence) that, before the cruises, they were told — verbally or in writing, impliedly or expressly — that the vessels or related port excursions were accessible to mobility-impaired passengers and that those passengers would have assistance on and off the ship. Appellants alleged and produced evidence that, after they had boarded the vessels, they discovered that, because they were mobility-impaired, they could not access many vessel areas (including, but not limited to, public restrooms, entertainment facilities, dining areas, swimming pools, and elevators), they were relegated to four cabins in undesirable areas of the ship, they were denied discounts available to passengers without disabilities, they were generally required to pay for a ticket for a companion to accompany them, they had no evacuation plan available to them, and they were effectively or expressly denied full access to ports of call.
Appellants sued NCL for contract breach, fraud or fraudulent inducement, unjust enrichment, and negligent misrepresentation; for violations of the Deceptive Trade Practices — Consumer Protection Act ("DTPA") and chapter 121 of the Texas Human Resources Code, which prohibits certain discrimination; and for a declaration that NCL's cruise ships were subject to chapter 121 and that NCL had violated appellants' rights or that appellants were entitled to refunds. Appellants sought actual and treble damages for DTPA violations; actual damages for their contract-breach claims; and the statutory minimum presumed damages of $100 for their discrimination claims under chapter 121. Alternatively, appellants sought reimbursement under the equitable principle of unjust enrichment. NCL disputed most of appellants' factual allegations and argued that chapter 121 of the Human Resources Code, and related statutes and architectural standards, did not apply to NCL's vessels because the vessels were foreign-flagged, were built before the statutes' application date, or did not sail in Texas waters.
Some appellants also sued three travel agencies, but certification was not sought for the claims against those defendants.
Tex. Bus. Com. Code Ann. §§ 17.41-.506 (Vernon 2002 Supp. 2004).
Tex. Hum. Res. Code Ann. §§ 121.001-.011 (Vernon 2001 Supp. 2004).
See Tex. Hum. Res. Code Ann. § 121.004(b) (providing for conclusive presumption of at least $100 in damages for violation of section 121.003).
Appellants' petition requested "at least" the statutory minimum of $100 (claimed to be per incident) and also exemplary damages for their discrimination claims. However, in subsequent class-certification pleadings, and in an apparent effort to ensure that common damages issues predominated over individual ones within the class, appellants represented that they were seeking only the statutory minimum damages of $100 (claimed to be per day).
Consequently, for purposes of determining the propriety of the trial court's ruling, we consider that appellants sought only the minimum presumed damages. We note that section 121.004(b) provides for a conclusive presumption of damages of "at least $100 to the person with a disability," but does not state whether the $100 is per day, per violation, or in total.
Appellants moved for certification with respect to all of their claims except those for fraud, fraudulent inducement, and negligent misrepresentation. The two classes that appellants sought to certify were:
Appellants' brief at times indicates that the only claims for which they did not seek certification were fraud and fraudulent inducement. However, in their class-certification pleadings, they expressly excluded negligent misrepresentation from those claims for which they sought certification.
• all passengers who at all times used scooters or wheelchairs for mobility and who lived in, or sailed from, Texas, and who sailed on NCL cruises from August 1, 1996 to the present ("the mobility-impaired class") and
This is the definition that appellants adopted without objection during the certification hearing. The class had originally been defined as, "All passengers with mobility impairments who lived in, or sailed from, Texas, and who sailed on NCL cruises from August 1, 1996 to the present."
• all companions of passengers with mobility impairments who lived in, or sailed from, Texas and who sailed on NCL cruises from August 1, 1996 to the present ("the companion class").
On appeal, appellants state that the companion class consisted of "all required companions" of mobility-impaired passengers, but appellants did not define the class this way below.
After a hearing, the trial court denied appellants' certification motion without stating grounds and denied appellants' request for fact findings and legal conclusions.
Preliminary Matters
A. Spoliation Inference
In issue two, appellants claim that the trial court erred in "failing to adopt or properly [to] apply a spoliation inference" because NCL destroyed evidence that appellants claim related to class certification.
"[O]nce a party has notice of a potential claim, that party has a duty to exercise reasonable care to preserve information relevant to that claim. Because of this duty, a party who intentionally or negligently fails to preserve relevant information may be held accountable for the loss of such evidence." Offshore Pipelines, Inc. v. Schooley, 984 S.W.2d 654, 666 (Tex. App.-Houston [1st Dist.] 1998, no pet.); see Wal-Mart Stores, Inc. v. Johnson, 106 S.W.3d 718, 722 (Tex. 2003) ("Before any failure to produce material evidence may be viewed as discovery abuse, the opposing party must establish that the non-producing party had a duty to preserve the evidence in question. . . . Such a duty arises only when a party knows or reasonably should know that there is a substantial chance that a claim will be filed and that evidence in its possession or control will be material and relevant to that claim.") (citations omitted). "As a general rule, a party's failure to produce evidence within its control raises the presumption that, if produced, [the evidence] would operate against him." Schooley, 984 S.W.2d at 666. The affected party must move for sanctions or, depending on the circumstances, request a spoliation presumption or instruction. Id. The trial court must then determine
whether sanctions or a presumption is justified. In making this legal inquiry, the court must consider: (1) whether the accused party had a duty to preserve the evidence; (2) whether the accused party negligently or intentionally spoliated evidence; and (3) whether the spoliation prejudiced the other party's ability to present its case or defense. In making this latter determination, the court should look to a variety of circumstances, including the relevancy of the missing evidence, the harmful effect of the evidence, and the availability of other evidence to take the place of the missing information. . . .
If the trial court determines that a duty to preserve evidence exists and that there has been a breach of that duty, resulting in prejudice to the other party, the court then must consider what remedy is warranted by the circumstances of the case. In choosing an appropriate sanction or in submitting a spoliation instruction to the jury, the court is accorded broad discretion.
Id.
Appellants repeatedly requested that the trial court apply a spoliation inference to support their burden for obtaining class certification. However, nowhere in their appellate briefs do appellants refer to a ruling on their requests. Our review of the record has not revealed any such ruling or any express consideration of the inquiries that Schooley and other spoliation cases make relevant. Nor can we construe the trial court's denial of appellant's motion to certify the class as an implicit ruling on appellants' spoliation request: the denial of certification without specifying grounds can be equally consistent with either no ruling on the spoliation request, a ruling granting the spoliation request, or a ruling denying the spoliation request. See Tex.R.App.P. 33.1(a)(2) (to preserve complaint, requiring objecting party to obtain implicit or express ruling or to object to refusal to rule). We cannot review a ruling that we cannot ascertain, nor can we remand the cause for appellants to obtain or to record that ruling belatedly.
There is not an inherent inconsistency in both granting the spoliation-inference request and denying the certification motion because a spoliation inference or presumption is rebuttable, rather than binding. Cf. Trevino v. Ortega, 969 S.W.2d 950, 960-61 (Tex. 1998) (Baker, J., concurring) (noting that courts can give one of two types of spoliation-presumption jury instructions: a rebuttable presumption that the destroyed evidence is unfavorable to the spoliating party, under which the burden shifts to the spoliating party to disprove the presumed fact, or an adverse presumption that the evidence would have been unfavorable to the spoliating party, under which the burden does not shift, but remains on the non-spoliating party to prove his case). Therefore, even if the trial court inferred whatever it could have inferred based on a finding of spoliation, the trial court (1) might have nonetheless decided that those inferences weren't enough to prove all of the class-certification elements or (2) might have decided that NCL's evidence sufficiently defeated the effect of any inferences that the court had recognized.
We overrule issue two.
B. Failure to Review Appellants' Sealed Documents
In support of their class-certification motion, appellants filed under seal two evidentiary volumes, which consisted of excerpts from NCL's "medical letter database." In issue one, appellants argue that the trial court abused its discretion, or that its certification ruling is not entitled to an abuse-of-discretion standard of review, because it appeared that the trial court had not reviewed the sealed volumes before ruling. Appellants argue that, at a minimum, the Code of Judicial Conduct required such review here. See Tex. Code Jud. Conduct, Canons 1-2, reprinted in Tex. Gov't Code Ann., tit. 2, subtit. G app. B (Vernon 1998) (generally requiring judges to uphold judiciary's integrity and independence and to avoid appearance of impropriety).
NCL's Medical Letter Database appears to have tracked information concerning its passengers' special needs arising from medical conditions and disabilities.
Appellants claim on appeal that the sealed volumes were relevant to the class-certification elements of numerosity, typicality, commonality, and predominance. Before the trial court, however, appellants consistently represented that the sealed volumes related only to numerosity. We thus review the trial court's actions under the assumption that the appendices related only to numerosity, which was how the trial court was told to view them.
For example, each volume was styled, "Plaintiffs' Exhibits in Support of Numerosity" and stated on its cover that the volume was filed for that purpose.
Appellants' certification motion also referred to the volumes as "numerosity exhibits." During the certification hearing, appellants referred to the sealed volumes as their "numerosity binders" and discussed the volumes only in the context of numerosity.
In its written opposition to class certification, NCL argued, among other things, that the classes were not clearly identifiable by objective criteria because of the broad way that appellants had defined the mobility-impaired class. In support, NCL argued that the sealed volumes included records of some passengers who were not mobility-impaired and others who were mobility-impaired in varying degrees. NCL then argued that appellants had failed to show numerosity for similar reasons.
During the certification hearing, appellants stated several times that they did "not believe that there is a serious dispute" that the numerosity requirement was met and that, except "for a few technical quibbles about class definition, NCL has not seriously objected on the ground that the class is not numerous." Implicitly supporting appellants' assertion that numerosity was uncontested was the fact that NCL's counsel never mentioned numerosity again when he spoke later in the hearing.
In fact, the only uncertainty about numerosity expressed during the entire hearing appears to have arisen when, to address NCL's objections to the class definition, appellants narrowed the definition of the mobility-impaired class. Even then, however, appellants indicated that there was no serious question about numerosity. For example, when the trial court asked whether the narrower definition materially affected numerosity, appellants replied, "It should not be a problem, . . . the vast majority of people . . . would be the ones who [fit the new definition]." Again, when the trial court asked whether "[i]t is important for this Court to have information available to it in the [new] numerosity analysis," appellants at first responded that they did not think so because "the vast majority of the people and the types of conditions and injuries . . . would show that they meet that category." And although appellants later stated that it would be important for the trial court to know how many people fell under the new class definition, appellants immediately added that numerosity was not in question because NCL's own evidence showed that the medical letter database captured only about half of the actual number of mobility-impaired passengers. Again, NCL said nothing about numerosity when it later spoke.
Given appellants' representations that numerosity was not seriously contested "except for technical quibbles about class definition," appellants' then redefining the class to address those quibbles, and the fact that NCL's counsel never contested numerosity at the hearing, it would not be surprising if the trial court did not review the sealed volumes that it had been told related only to numerosity and if the court instead took appellants' word for the numbers appearing in those volumes. We decline to hold that the trial court abused its discretion or acted improperly if it did not review the sealed volumes under these circumstances.
We overrule issue two.
Denial of Appellants' Motion to Certify the Two Classes
In issue three, appellants claim that the trial court abused its discretion in denying their motion to certify the two classes.
A. The Law of Class Certification
The appealed order was issued under former Texas Rule of Civil Procedure 42, which, like the rule's current version, governs class certification. See Tex. R. Civ. P. 42, 553-554 S.W.2d (Tex. Cases) XXXV-XXXVIII (1977, amended 2003) [hereinafter "former Tex. R. Civ. P. 42"]. Under former rule 42, "[a]ll class actions must satisfy four threshold requirements: (1) numerosity ('the class is so numerous that joinder of all members is impracticable'); (2) commonality ('there are questions of law or fact common to the class'); (3) typicality ('the claims or defenses of the representative parties are typical of the claims or defenses of the class'); and (4) adequacy of representation ('the representative parties will fairly and adequately protect the interests of the class')." Southwestern Refining Co. v. Bernal, 22 S.W.3d 425, 433 (Tex. 2000) (citing former rule 42). Additionally, at least one of the subdivisions of former rule 42(b) must be met. Id. Appellants sought certification under former rule 42(b)(4), which requires that common questions of law or fact predominate over questions affecting only individual members and that class treatment be "superior to other available methods for the fair and efficient adjudication of the controversy." Former Tex. R. Civ. P. 42(b)(4); accord Bernal, 22 S.W.3d at 433.
The provisions of former rule 42 that are pertinent to this appeal were not substantively changed when the rule was amended in 2003. See Order of the Supreme Court of Texas, Amendments to the Texas Rules of Civil Procedure, Misc. Docket No. 03-9160 (Oct. 9, 2003, effective Jan. 1, 2004). We nonetheless refer to "former rule 42" throughout this opinion, mainly because of the renumbering of an applicable subsection in 2003.
The former rule's subsection (b)(4) was renumbered, without substantive change, in 2003 as subsection (b)(3). See Order of the Supreme Court of Texas, Amendments to the Texas Rules of Civil Procedure, Misc. Docket No. 03-9160 (Oct. 9, 2003, effective Jan. 1, 2004).
No automatic right exists to maintain a lawsuit as a class action. Bernal, 22 S.W.3d at 439 (quoting Sun Coast Res. v. Cooper, 967 S.W.2d 525, 529 (Tex. App.-Houston [1st Dist.] 1998, pet. dism'd w.o.j.)). Both former and current rule 42 provide that a trial court may certify the class if the plaintiff satisfies the rule's prerequisites. See id. (quoting Sun Coast Res., 967 S.W.2d at 529). Courts must take a cautious approach to class certification and must perform a rigorous analysis to determine whether all certification prerequisites have been met. Bernal, 22 S.W.3d at 435; accord Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675, 690 (Tex. 2002) (quoting Bernal). "Compliance with Rule 42 must be demonstrated; it cannot merely be presumed." Henry Schein, Inc., 102 S.W.3d at 691. The Supreme Court has expressly rejected the approach of "certify now and worry later." Bernal, 22 S.W.3d at 435; accord Henry Schein, Inc., 102 S.W.3d at 690 (quoting Bernal). The plaintiffs bear the burden of showing their entitlement to certification. See Sun Coast Res. v. Cooper, 967 S.W.2d 525, 529 (Tex. App.-Houston [1st Dist.] 1998, pet. dism'd w.o.j.); Glassell v. Ellis, 956 S.W.2d 676, 682 (Tex. App.-Texarkana 1997, pet. dism'd w.o.j.); see also Henry Schein, Inc., 102 S.W.3d at 694 ("The question the court must decide before certifying a class, after rigorous analysis and not merely a lick and a prayer, is whether the plaintiffs have demonstrated that they can meet their burden of proof in such a way that common issues predominate over individual ones.") (emphasis added).
B. The Standard of Review
We review the trial court's class-certification ruling for abuse of discretion. See Henry Schein, Inc., 102 S.W.3d at 691. A trial court abuses its discretion only if the record (1) clearly shows that the trial court misapplied the law to the established facts, (2) does not reasonably support the ruling, or (3) shows that the trial court acted arbitrarily or unreasonably. Sun Coast Res., 967 S.W.2d at 529.
C. Predominance
"[Former] Rule 42(b)(4)'s predominance requirement . . . is one of the most stringent prerequisites to class certification." Bernal, 22 S.W.3d at 433. "Courts determine if common issues predominate by identifying the substantive issues of the case that will control the outcome of the litigation, assessing which issues will predominate, and determining if the predominating issues are, in fact, those common to the class. The test for predominance is not whether common issues outnumber uncommon issues but . . . 'whether common or individual issues will be the object of most of the efforts of the litigants and the court.' If, after common issues are resolved, presenting and resolving individual issues is likely to be an overwhelming or unmanageable task for a single jury, then common issues do not predominate. Ideally, 'a judgment in favor of the class members should decisively settle the entire controversy, and all that should remain is for other members of the class to file proof of their claim.'" Id. at 434.
The causes of action determine the substantive issues that will predominate in this suit. See id. We thus examine predominance in light of each cause of action on which appellants sought certification.
1. Violations of the DTPA
To prevail under the DTPA, a plaintiff must show the following things:
• the plaintiff was a consumer;
• the defendant committed, among other things, (1) a "laundry-list" violation under section 17.46(b) on which the plaintiff detrimentally relied or (2) any unconscionable action or course of action; and
See Tex. Bus. Com. Code Ann. § 17.46(b)(1)-(26) (Vernon 2002).
• the wrongful act was a producing cause of the plaintiff's economic or mental-anguish damages.
See Tex. Bus. Com. Code Ann. § 17.50(a) (Vernon 2002).
Appellants' class-certification pleadings listed the following DTPA issues as common to the classes:
• whether NCL made actionable misrepresentations in its "company-wide publications and representations about the accessibility of" cruises, ports of call, and excursions;
• whether NCL made actionable misrepresentations in its "company-wide policies and representations concerning its travel services, information and assistance"; and
• whether NCL's "policies, procedures, actions, or omissions" constituted unconscionable conduct.
Appellants argued that individual issues would not predominate because the alleged misrepresentations were found in "virtually identical language in [NCL's] publications and documents" and arose from "NCL's failure to inform [appellants] about the lack of access to vessel facilities, ports and shore excursions." Appellants alleged that the statements in these materials violated the DTPA because they constituted both laundry-list violations and unconscionable conduct.
See Tex. Bus. Com. Code Ann. § 17.46(b)(5) ("representing that goods or services have sponsorship, approval, characteristics, . . . uses, benefits, or quantities which they do not have . . ."); id. § 17.46(b)(7) ("representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another"); id. § 17.46(b)(24) ("failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed").
See id. § 17.50(a)(1) (Vernon 2002).
Appellants rely heavily on representations made in NCL's national marketing materials, which they claim were made to all class members. However, there was evidence that NCL advertised through brochures, flyers, postcards, posters, and "minibrochures" and that it ran advertisements in magazines, in travel-agency trade journals, on television, and on the radio. In past years, NCL had sometimes issued in a given year as many as five or six different brochures, organized by destination, and 25 different flyers, organized topically. Advertising materials were sometimes sent to potential customers upon request and, at other times, to travel agents. Travel agents sometimes gave customers information about NCL's cruises or vessels. NCL's reservation department would also frequently answer questions. Additionally, NCL presented evidence that it offered passenger courtesy coordinators to mobility-impaired passengers who contacted NCL (that is, to only some of its mobility-impaired passengers) and that these coordinators booked rooms and answered questions regarding accessibility. NCL also maintained a website.
As might be expected, given the varied ways in which NCL advertised and responded to potential customers' questions, there was evidence that appellants received the representations on which they based their claims in different ways, including orally. Julia Hollenbeck testified that NCL representatives verbally told her that assistance on and off the ship would be available and that certain land tours would be accessible and would offer assistance. Some of these representations contradicted representations in NCL's written materials, which she had also read. Appellant Rodger Peters testified that his travel agent, in response to his specific questions, made oral representations that the shore excursions and certain ship areas were accessible; that he also reviewed NCL's brochures, a booklet with ship floor plans, and the NCL website; and that he took a second cruise on a different NCL vessel because of his travel agent's assurances and NCL's written materials and website. Appellant Douglas Spector testified that the representations made to him about accessibility on the ship were contained in NCL's brochures and on its website and were verbally made by its representatives and by his travel agent. Appellant David Killough testified that he had read NCL's brochures before purchasing his ticket. Given the varying means of communicating and receiving representations, the trial court could reasonably have concluded that determining what representations were made to which class members would involve individual inquiries that would predominate over common ones.
Additionally, to the extent that appellants asserted laundry-list DTPA claims, class members would also have to show detrimental reliance. See Tex. Bus. Com. Code Ann. § 17.50(a)(1)(A)-(B) (Vernon 2002) (expressly requiring detrimental reliance for these violations); Henry Schein, 102 S.W.3d at 686. For the same reasons and based on the same evidence as noted above, the trial court could have reasonably determined that individual reliance inquiries would predominate over common ones for appellants' laundry-list DTPA claims. See Henry Schein, 102 S.W.3d at 693-94. 2. Breach of Contract
In support of their request to certify the laundry-list claims, appellants relied on Weitzel v. Barnes, in which the Texas Supreme Court held that reliance is not an element for such claims. See 691 S.W.2d 598, 600 (Tex. 1985). Weitzel issued before 1995, which is the year in which section 17.50(b)(1) was amended expressly to require detrimental reliance. See Tex. Bus. Com. Code Ann. § 17.50(b)(1)(B). The Supreme Court has recently recognized that laundry-list violations now require a showing of detrimental reliance. See See Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675, 686 (Tex. 2002).
Accordingly, Weitzel does not control.
The Henry Schein court stated, "This does not mean, of course, that reliance . . . cannot be proved class-wide with evidence generally applicable to all class members; class-wide proof is possible when class-wide evidence exists. . . . If a plaintiff could prove reliance in an individual action with the same evidence offered to show class-wide reliance, then the issue is one of law and fact common to the class. . . . The plaintiffs contend that they have established 'class-wide reliance' on misrepresentations made by Schein, but this is not supported by the record. It is true, as the plaintiffs say, that there is evidence that Schein wanted purchasers to rely on its advertisements and other representations about its software products, as most marketers of any product would, but there is no evidence that purchasers actually did rely on Schein's statements so uniformly that common issues of reliance predominate over individual issues. To the contrary, there is, for example, significant evidence that purchasers relied on recommendations from colleagues and others rather than any statements made directly or indirectly by Schein." Id. (emphasis in original).
The elements of a breach-of-contract action are (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach. Valero Mktg. Supply Co. v. Kalama Int'l, L.L.C., 51 S.W.3d 345, 351 (Tex. App.-Houston [1st Dist.] 2001, no pet.). A valid contract, in turn, requires (1) an offer, (2) an acceptance, (3) a meeting of the minds, (4) each party's consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding. Wal-Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555-56 (Tex. App.-Houston [14th Dist.] 2002, no pet.).
As the basis for their contract claims, appellants generally relied on the same oral and written statements that they claimed violated the DTPA. Accordingly, for appellants, the contractual terms were partially oral and based on answers to individual questions. The same could be true for potential class members, especially given appellants' own experiences, NCL's use of passenger courtesy coordinators, and NCL's reservation department's oral responses to customer inquiries.
"In determining the existence of an oral contract, the court looks to the communications between the parties and to the acts and circumstances surrounding those communications." Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.-Houston [1st Dist.] 2002, pet. denied). Looking to individual communications to determine contract terms (and thus also breach) could require individual inquiries to the extent that oral representations might have formed some or all of a class member's contract with NCL — as appellants testified that such representations had for them. See Lopez, 93 S.W.3d at 555-57 (reversing order certifying class in part because alleged oral contracts, made by different representatives of defendant, and with terms that varied from those in written materials, would involve individual issues on breach, contract terms, and apparent authority to vary written terms, which individual issues would predominate over common issues). Additionally, given the varied written materials that NCL used, and the fact that even some appellants viewed different written materials, the trial court would have acted within its discretion if it determined that the written contractual terms might vary for each potential class member. Accordingly, as it could have with the DTPA causes of action, the trial court could also reasonably have concluded that individual inquiries as to contract terms and breach would require individualized inquiries that would predominate over common ones.
3. Unjust Enrichment
Unjust enrichment is not an independent cause of action. Amoco Production Co. v. Smith, 946 S.W.2d 162, 164 (Tex. App.-El Paso 1997, no writ.). Rather, it is "based upon the equitable principle that a person receiving benefits which were unjust for him to retain ought to make restitution. . . . A right of recovery under unjust enrichment is essentially equitable. . . ." Bransom v. Standard Hardware, Inc., 874 S.W.2d 919, 927 (Tex. App.-Fort Worth 1994, writ denied). A party is unjustly enriched when it receives benefits under circumstances that give rise to an implied or quasi-contractual obligation to return the benefits. See id. Typically, "[a] party may recover under the unjust enrichment theory when one person has obtained a benefit from another by fraud, duress, or the taking of an undue advantage." Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992).
In alleging that NCL was unjustly enriched, appellants pleaded that the following acts supported disgorgement of the sums that they had paid NCL and the establishment of constructive trusts for those sums:
The actions and/or omissions of . . . NCL . . . caused Doug and Ana Spector and Julia Hollenbeck to . . . purchase NCL cruises, services and excursions which were not equally accessible to persons with mobility impairments. Furthermore, NCL's inaccessibility and refusal to make reasonable accommodations without charge forced the Plaintiffs to pay additional amounts to obtain accommodations and/or to choose between participating in NCL programs, excursions and services which were inaccessible or refraining from those activities in order to be with their loved ones with mobility impairments. Additionally, the actions and/or omissions of . . . NCL resulted in Rodger Peters not receiving the value of the cruise that he purchased or compensation for the losses he sustained as a result of their fraudulent conduct and the discriminatory conduct that he was forced to endure. Furthermore, the actions and/or omissions of NCL in 2000 resulted in Rodger Peters' purchase of another NCL cruise, services and/or excursions which were not equally accessible to persons with mobility impairments at an inflated price.
(Emphasis added.) The allegations generally encompassed reliance on the part of appellants or wrongful conduct by NCL, and the italicized portions implicated the same actions or representations — both oral and written — that appellants alleged for their DTPA and contract-breach claims. Indeed, in their brief's discussion of commonality and predominance, appellants assert that all of their claims — including recovery under the theory of unjust enrichment — arise from similar actions and representations, including language in NCL's publications and tickets, NCL's failure to inform appellants that various facilities and excursions were inaccessible, and NCL's sale of cruises on which mobility-impaired passengers could not access facilities and excursions. The trial court could thus have reasonably concluded that, for the reasons set out above in our DTPA and breach-of-contract discussions, many of the unjust-enrichment allegations would require individual inquiries that could predominate over common ones.
4. Violation of Chapter 121
Human Resources Code section 121.003 prohibits discrimination and provides:
(a) Persons with disabilities have the same right as the able-bodied to the full use and enjoyment of any public facility in the state.
"Public facility" is defined to include a "boat . . . or any other public conveyance or mode of transportation; a hotel, motel, or other place of lodging; . . . a building to which the general public is invited; . . . a restaurant or other place where food is offered for sale to the public; and any other place of public accommodation, amusement, convenience, or resort to which the general public or any classification of persons from the general public is regularly, normally, or customarily invited." Tex. Hum. Res. Code Ann. § 121.002(5) (Vernon 2001).
(b) No . . . boat, or other public conveyance or mode of transportation operating within the state may refuse to accept as a passenger a person with a disability solely because of the person's disability, nor may a person with a disability be required to pay an additional fare because of his or her use of . . . [a] wheelchair, crutches, or other device used to assist a person with a disability in travel.
. . . .
(d)The discrimination prohibited by this section includes a refusal to allow a person with a disability to use or be admitted to any public facility, a ruse or subterfuge calculated to prevent or discourage a person with a disability from using or being admitted to a public facility, and a failure to:
(1) comply with [former] Article 9102, Revised Statutes;
(2) make reasonable accommodations in policies, practices, and procedures; or
(3) provide auxiliary aids and services necessary to allow the full use and enjoyment of the public facility.
Tex. Hum. Res. Code Ann. § 121.003 (Vernon 2001). The parties dispute whether chapter 121 can apply to foreign-flagged vessels that sail in Texas waters.
Appellants appear to have relied on sections 121.003(b) and (d)(1) through (d)(3) as the bases for NCL's liability to the class. Subsection (d)(1) incorporates former Revised Civil Statute article 9102, the Architectural Barriers Act ("the ABA"), which is now codified in Government Code chapter 469. See Tex. Gov't Code Ann. §§ 469.001-.208 (Vernon Supp. 2004) (adopted by Act of May 20, 2003, 78th Leg., R.S., ch. 1276, § 9.005(a), 2003 Tex. Gen. Laws 4158, 4203-09 and codifying, effective September 1, 2003, former Texas Revised Civil Statute article 9201). The ABA is intended "to ensure that each building and facility subject to this chapter is accessible to and functional for persons with disabilities without causing the loss of function, space, or facilities." Id. § 469.001(a). The ABA charges the Texas Commission of Licensing and Regulation with adopting various architectural standards, specifications, and rules, which are published at Title 16, chapter 68 of the Texas Administrative Code. See id. § 469.052; 16 Tex. Admin. Code ch. 68 (West 2003). Administrative Code Title 16, chapter 68 adopts the Texas Accessibility Standards for, among other things, "buildings" and "facilities," which chapter 68 defines as structures "located in the State of Texas." 16 Tex. Admin. Code §§ 68.10(2), (10), 68.20(a) (West 2003) (emphasis added). Predictably, the parties also dispute whether the Texas Accessibility Standards apply to NCL's vessels that sailed in Texas waters.
For purposes of this opinion, we cite to Government Code chapter 469's text, although we still refer to the codified statute as the "ABA."
We need not decide whether chapter 121 or the Texas Accessibility Standards that chapter 121 incorporates through the ABA apply to NCL's vessels that sailed in Texas waters. Assuming without deciding that the statute and standards could apply to vessels sailing within Texas waters, we hold that the trial court did not abuse its discretion if it concluded that appellants nonetheless did not show that common issues under chapter 121 would predominate over individual issues.
The parties admit, and we have determined, that this is an issue of first impression.
Even under appellants' construction, chapter 121 and the Texas Accessibility Standards could not apply to NCL's vessels that never sailed in Texas waters. See Tex. Hum. Res. Code Ann. § 121.003(a), (b) (providing for "full use and enjoyment of any public facility in the state" and providing that mode of transportation " operating within the state" may not commit certain discriminatory acts) (emphasis added); 16 Tex. Admin. Code §§ 68.10(2), (10), 68.20(a) (adopting standards for, among other things, "buildings" and "facilities," which are defined as structures "located in the State of Texas.") (emphasis added); see also Tex. Hum. Res. Code Ann. § 121.001 (Vernon 2001) ("The public policy of the state is to encourage and enable persons with disabilities to participate fully in the social and economic life of the state, . . . and to otherwise fully enjoy and use all public facilities available within the state.") (emphasis added).
The majority of NCL's vessels did not sail in Texas waters. NCL presented the following evidence at the November 2001 class-certification hearing concerning its vessels and their routes. One of the two vessels on which appellants sailed — the NORWEGIAN STAR — sailed out of Houston, Texas from May 1997 to November 1998. The other vessel on which appellants sailed — the NORWEGIAN SEA — sailed from Houston, Texas from December 1998 to January 2001. These were the only two NCL vessels that sailed out of Texas. However, from August 1996 to November 2001, NCL operated 12 different cruise vessels, each sailing under the flag of the Bahamas or Panama. At the time that appellants filed their lawsuit in 2000, NCL operated six cruise vessels: the NORWEGIAN SEA, the NORWEGIAN SKY, the NORWEGIAN DREAM, the NORWEGIAN WIND, the NORWEGIAN MAJESTY, and the S/S NORWAY. NCL began operating a seventh cruiser, the NORWEGIAN SUN, in September 2001. From August 1996 until November 2001, NCL vessels sailed in the waters of the United States, Europe, Asia, Australia, and South America. Although appellants presented evidence that 90 or 98 percent of NCL's passengers come from or sail out of United States ports, NCL presented evidence that its vessels that called in United States ports visited cities on the East Coast, the West Coast, the Alaskan Coast, the Gulf Coast (but only from 1997 to 2001), and the Hawaiian Islands. Appellants' evidence showed that two vessels, the S/S NORWAY and the NORWEGIAN DREAM, sailed out of Florida ports for at least some time included within the period defined by the classes.
The NORWEGIAN STAR was evidently not operating by the time of suit's filing, and, at least as of November 2001, NCL no longer owned the vessel.
The classes that appellants proposed included mobility-impaired passengers and their companions who " lived in, or sailed from, Texas and who sailed on NCL cruises from August 1, 1996 to present." (Emphasis added.) The italicized portions of the definitions were broad enough to include Texas residents who sailed on vessels that never entered Texas waters. In fact, appellants' own exhibits revealed that, of 239 entries from NCL's medical letter database that concerned potential class members and their companions who were Texas residents, 69 entries concerned individuals (potential members alone or those members and their companions) who sailed on one of the eight NCL vessels that sailed entirely outside Texas waters. NCL's evidence indicated that those eight vessels could have visited United States cities on either the East Coast, the West Coast, the Alaskan Coast, or the Hawaiian Islands.
NCL's medical letter database did not always reveal the residence of mobility-impaired passengers or their companions. The database generally did, however, list the addresses of the passengers' travel agents. For purposes of their class-certification motion, appellants thus assumed, without objection, that mobility-impaired passengers whose travel agent officed in Texas were Texas residents. For purposes of this opinion, we used the same residency assumption that appellants used without objection below.
Appellants thus proposed class definitions that encompassed a potentially significant number of members who could not, as a matter of law, have asserted discrimination claims under Texas's chapter 121 because they sailed on vessels that never entered Texas waters. Appellants did not assert claims under the federal Americans with Disabilities Act, and they did not explain below what other states' anti-discrimination laws might have been implicated, whether and how those other states' anti-discrimination laws could apply to NCL's vessels, or whether those states' anti-discrimination laws were similar to Texas's chapter 121. Appellants failed to make this showing despite NCL's assertion below (and again on appeal) that choice-of-law issues, including those applicable to appellants' discrimination claims, precluded class certification. Appellants' trial plan similarly focused on proving discrimination under chapter 121 alone. As the Texas Supreme Court has noted, "State and federal courts have overwhelmingly rejected class certification when multiple states' laws must be applied" because predominance can thereby be defeated. Henry Schein, Inc., 102 S.W.3d at 698-99; accord Tracker Marine, L.P. v. Ogle, 108 S.W.3d 349, 359 (Tex. App.-Houston [14th Dist.] 2003, no pet.). Here, appellants failed to show the trial court that multiple states' laws would not apply or that, if multiple states' laws did apply, those laws did not differ materially.
See 42 U.S.C. § 12101-12213 (West 2003).
The only indication of another state's anti-discrimination law was made in NCL's motion to take judicial notice of Florida law, which NCL had at one point claimed controlled through a choice-of-law provision in appellants' tickets. NCL's motion alleged that Florida's anti-discrimination law differed materially from Texas's. Whether NCL was correct in that representation is immaterial because appellants still had the burden to show whether Florida or any other applicable states' anti-discrimination laws applied, what they were, and whether they differed materially from Texas's. See Henry Schein, Inc., 102 S.W.3d at 698-99.
In its response to appellants' class-certification motion, NCL described the class definitions as being "overbroad" because they included Texas residents who sailed from non-Texas ports. However, the substance of NCL's argument below was that (1) chapter 121 could not apply to vessels that did not enter Texas waters; (2) the anti-discrimination laws of other jurisdictions would thus apply to any class members who did not sail on vessels that entered Texas waters; and (3) the differences in the states' anti-discrimination laws would defeat the commonality and predominance necessary for maintaining a class action.
Appellants responded below, as they do on appeal, that NCL had the burden to show whether other states' anti-discrimination laws differed from those of Texas. We disagree. In Henry Schein, Inc., the Texas Supreme Court placed the burden of showing that "legal issued predominate[d]" on the plaintiffs seeking class certification. See id., 102 S.W.3d at 697-98. The trial court in Henry Schein, Inc., in certifying classes without having applied the proper choice-of-law analysis, had erroneously concluded that all of the plaintiffs' claims were governed by Texas law. See id. at 698. In holding that the plaintiffs had not carried their burden of showing that legal issues would predominate, the supreme court reasoned as follows:
[The defendant] offered evidence of the differences in the law of other states, but we do not have the benefit of an analysis of those differences by the lower courts. Accordingly, we are not prepared to say that Texas law will not govern any of the class members' other claims besides those for breach of licensing agreements with choice-of-law provisions. We can say, however, that the plaintiffs have wholly failed to demonstrate that Texas law should apply to so many of those claims that common legal issues predominate.
. . .
The plaintiffs do not argue that a nationwide class should be certified if the trial court must look to the laws of all fifty states to adjudicate the claims. State and federal courts have overwhelmingly rejected class certification when multiple states' laws must be applied. For this reason, the plaintiffs have failed to show that legal issues predominate.
Id. at 697, 698-99 (emphasis added; footnotes omitted). The court thus effectively placed the burden on the plaintiff to show the absence of conflicting state laws when a multi-state class is involved.
Several courts of appeals have followed Henry Schein, Inc. in placing this burden on the class proponent. See Daimlerchrysler Corp. v. Inman, 121 S.W.3d 862, 886 (Tex. App.-Corpus Christi 2003, pet. filed); Ogle, 108 S.W.3d at 352; see also Philadelphia Am. Appellant Life Ins. Co. v. Turner, No. 02-03-165-CV, 2004 WL 393155 at * 11 (Tex. App.-Fort Worth Mar. 4, 2004, no pet. h.) (citing Ogle and holding that "[a]ppellee [plaintiff] had the burden of presenting an analysis of state law evaluating any differences between the states enumerated in the class definition and failed to satisfy that burden."). We agree with these courts' interpretation of Henry Schein, Inc. and note that that interpretation comports with the plaintiff's general burden to show its entitlement to class certification. See Sun Coast Res., 967 S.W.2d at 529 (noting that plaintiff, as class-certification proponent, has this burden); Ogle, 108 S.W.3d at 351-52 ("The class representatives bear the burden of establishing the prerequisites for class treatment, so they must present an extensive analysis of state law evaluating any differences.").
The Inman court stated, "In Henry Schein, an appeal decided after the instant class certifications were ordered, the Texas Supreme Court reversed the certification of a nationwide class action on choice-of-law grounds. It concluded that the plaintiffs had 'wholly failed to demonstrate that Texas law should apply to so many of . . . [the class] claims that common legal issues predominate.' In doing so, it impliedly overruled the proposition that 'a class certification order need not address choice of law [issues].' It also placed the burden of establishing the appropriate law on representatives of nationwide classes who argue for certification by virtue of predominance." Id., 121 S.W.3d at 886 (citations omitted).
The Ogle court stated, "Clearly, the Supreme Court's opinion in Schein requires us to abandon . . . our practice postponing choice-of-law questions until after certification, as we can hardly evaluate the claims, defenses, or applicable (as Schein requires) without knowing what the law is. . . . The class representatives bear the burden of establishing the prerequisites for class treatment, so they must present an extensive analysis of state law evaluating any differences." Id., 108 S.W.3d at 351-52.
But see Snyder Communications v. Magana, 94 S.W.3d 213, 238-40 (Tex. App.-Corpus Christi 2002, pet. filed) (placing burden of choice-of-law issues on defendant because relevant facts were peculiarly within its knowledge and distinguishing Henry Schein, Inc.; also noting that (1) applicable laws of all jurisdictions were relatively uniform, so as to exempt Magana plaintiffs from presenting choice-of-law arguments to trial court; (2) defendant did challenge certification on choice-of-law grounds at trial-court level; and (3) defendant waived choice-of-law issue on appeal because of inadequate briefing).
Appellants rely on Microsoft Corp. v. Manning to support their position that the class-certification opponent (here, NCL) bears the burden of showing that differing laws defeat predominance. See id., 914 S.W.2d 602, 613 (Tex. App.-Texarkana 1995, writ dism'd). Manning does not control. First, it predated Henry Schein, Inc., in which the Supreme Court placed the burden of establishing the appropriate law, for purposes of predominance, on the proponent of nationwide classes. Second, the Texas state-court decision on which the Manning court relied for this holding was Weatherly v. Deloitte Touche, 905 S.W.2d 642, 650 (Tex. App.-Houston [14th Dist.] 1995, no writ.), the pertinent holdings of which the Fourteenth Court of Appeals has since expressly or impliedly abandoned. See Ogle, 108 S.W.3d at 352 (overruling Weatherly to extent that Weatherly allowed postponement of choice-of-law questions until after certification and also holding, contrary to Weatherly, that class representatives bear burden of presenting analysis of differing states' laws). Third, the Manning court bolstered its conclusion by reasoning that, if the trial court later found that other states' laws applied or that those laws destroyed commonality or predominance, the court could create subclasses or simply decertify the class. Manning, 914 S.W.2d at 613. The Texas Supreme Court has since rejected such a certify-now-and-worry-later approach to class certification. See Bernal, 22 S.W.3d at 435; accord Henry Schein, Inc., 102 S.W.3d at 690 (quoting Bernal); see also Ogle, 108 S.W.3d at 352 352 n. 9 (noting that Weatherly court's holding that trial court could postpone choice-of-law determinations until after certification was type of certify-now-and-worry-later approach rejected by Bernal).
Accordingly, we hold that the trial court did not abuse its discretion in refusing to certify the chapter 121 claims, given the class definitions, the evidence, and the fact that appellants did not explain what law applied to class members who sailed solely outside Texas waters or whether the applicable laws differed materially.
D. Conclusion
We hold that the trial court did not abuse its discretion in denying appellants' motion to certify either proposed class. Accordingly, we overrule issue three.
Conclusion
We affirm the trial court's order denying class certification.