Opinion
Civil Action No. 0:01-2935-CMC.
November 28, 2005
This matter is before the court on Plaintiffs' Renewed Motion for Class Certification (Dkt No. 114), and on related cross motions to strike portions of documents filed in support of or in opposition to the motion for class certification (Dkt No.'s 127 and 138). For the reasons set forth below, the motion for class certification is denied. In reaching this conclusion, the court has assumed without deciding that the motions to strike should both be decided in Plaintiffs' favor. The parties shall confer within thirty days of receipt of this order and file a report addressing their plan for further proceedings as to Plaintiffs' individual claims.
The conclusion that the class should not be certified even if the challenged evidence proffered by Plaintiffs is accepted and the challenged evidence proffered by Defendants rejected renders the motions to strike moot.
I. CLASS DEFINITION
The class which Plaintiffs seek to certify is defined as: "All owners of land in South Carolina that underlies or is adjacent to a railroad right of way within which Qwest owns, operates, or uses fiber-optic cable. Excluded from the class are the United States, Indian Tribes, and the trial judge." Dkt No. 114 at 1.II. BASIS OF COMPLAINT
Plaintiffs allege that Defendants "built a nationwide fiber-optic-cable telecommunications network largely along railroad rights of way, knowing that it was trespassing on that property. [Defendants] neither obtained permission from the rightful landowners to install its cable nor paid any compensation to them for the invasion of their property." Based on these central factual allegations, Plaintiffs pursue a variety of state law claims on behalf of the class of persons defined above who, Plaintiffs argue, retained the right to grant or deny easements for the laying of fiber-optic cable.
III. CENTRAL LEGAL AND FACTUAL ISSUES
As suggested by the above summary of Plaintiffs' position, the central issues in this litigation are whether Defendants' laying of cable in the railroad rights-of-way constitutes "trespassing" and, if so, against whom. Resolution of these issues requires the court to first determine whether the two railroads which granted Defendants the right to lay cable owned sufficient property rights to grant the relevant easements. If the answer to this "merits" question is "no" for a particular parcel, then Defendants would, presumably, be liable to one or more class members for trespass on the particular parcel. The second question, which Plaintiffs characterize as a claims administration question, involves identification of the class member with the relevant rights.
There is no single answer to the first question. This is because the rights-of-way at issue cover approximately 385 miles within the State of South Carolina and were obtained by dozens of railroads over the course of 150 years through a variety of means. These means include: (1) various state charter statutes; (2) condemnation; (3) adverse possession; and private conveyance. Transactions and events post-dating the original conveyances may also affect what rights the railroad owned at the time it granted Defendants the right to lay fiber-optic cable.
Identification of the proper class members to recover for any trespass would first require identification of the individuals who own property adjoining the relevant 385 miles of railroad right-of-way. It would next be necessary to determine whether the cable is within the property to which the class member might arguably have a claim. This is because many of the class members own land on only one side of the railroad's center line. Thus, only those class members owning property on the "cable side" of the center line would have a claim.
The plain language of the class definition suggests that the class would include only persons or entities which owned covered land at the time of certification. If so, the class would exclude others who might arguably have a claim, specifically persons who owned the adjoining or underlying land at the time of the originally alleged trespass but transferred the land to another prior to certification.
Determinating who the adjacent landowners are and whether their property is on the "cable" side of the centerline would, itself, be a relatively straightforward (though tedious) process. This determination would not, however, end the inquiry. It would still be necessary to insure that the adjoining landowner retained those rights underlying the easement which were not transferred to the railroad. This process could involve reviewing title histories going back to the date a railroad first acquired the relevant right-of-way.
It is possible, as seems to be the case with one of the parcels owned by one of the named Plaintiffs, that the deed history of some parcels will raise questions as to whether the current adjoining landowners hold whatever rights were not conveyed to the railroad. This is because former landowners who owned fee title to land underlying easements may have transferred only the land up to the edge of the easement when conveying the adjoining land.
If the class were defined to include all persons or entities which owned covered property at any time after installation of the cable, then additional factual and legal questions would be presented regarding the relative rights of the multiple owners. See supra n. 2. Individualized issues as to statute-of-limitations defenses might also be presented as to some of the landowners.
IV. DISCUSSION
A. Class Certification Requirements
The burden of establishing that a proposed class satisfies all of the relevant requirements rests on the proponents of class certification, here the Plaintiffs. See International Woodworkers of America v. Chesapeake Bay Plywood Corp., 659 F.2d 1259, 1267 (4th Cir. 1981). To satisfy this burden, the proponents must first establish that the proposed class satisfies the four prerequisites of Rule 23(a) of the Federal Rules of Civil Procedure — numerosity, commonality, typicality, and adequacy. See infra § IV. C. They must also establish that the class satisfies one or more of the three subsections of Rule 23(b). See infra § IV.D.
In assessing the sufficiency of Plaintiffs' proffered proof for class certification purposes, the court "should make whatever factual and legal inquiries are necessary under Rule 23." Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 676 (7th Cir. 2001) (quoted with approval in Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. 2004)). As noted in Gariety:
[W]hen a district court considers whether to certify a class action, it performs the public function of determining whether the representative parties should be allowed to prosecute the claims of absent class members. Were the court to defer to the representative parties on this responsibility by merely accepting their assertions, the court would be defaulting on the important responsibility conferred on the courts by Rule 23 of carefully determining the class action issues and supervising the conduct of any class action certified. Gariety, 368 F.3d at 366-67.
In resolving a motion for class certification, the court must keep in mind that the class action device "was an invention of equity . . . mothered by the practical necessity of providing a procedural device so that mere numbers would not disable large groups of individuals, united in interest, from enforcing their equitable rights nor grant them immunity from their equitable wrongs." 7A Charles Alan Wright, Arthur R. Miller Mary Kay Kane, Federal Practice and Procedure § 1751 at 10 (3d ed. 2005) (hereinafter "Wright Miller") (quoting Montgomery Ward Co. v. Langer, 168 F.2d 182, 187 (8th Cir. 1948)). While Rule 23 has undergone significant revisions over the years, it
has not lost its remedial character and continues to have as its objectives 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.
Wright Miller § 1754 at 55. These laudable goals may not, however, be allowed to override the due process rights of either the absent class members or the opposing parties. See generally Gunnells v. HealthPlan Services Inc., 348 F.3d 417 (4th Cir. 2003) (discussed infra § IV.C. "Commonality"); Broussard v. Meineke Disc. Muffler Shops, 155 F.3d 331 (4th Cir. 1998) (discussed infra § IV.C. "Commonality" and "Typicality").
B. Judicial Estoppel
Before considering the specific requirements of Rule 23, the court must address Plaintiffs' argument that Defendants are judicially estopped from challenging certification of the presently proposed statewide litigation class. This argument rests on Defendants' previous support of certification of a nationwide settlement class in Smith v. Sprint Communications Co. The Smith settlement class was initially certified by a district court in Illinois. See Smith, C.A. No. 99C3844, Order Preliminarily Approving Settlement, Conditionally Certifying Class, and Directing Notice (N.D. Ill. July 25, 2003). The certification was, however, reversed on appeal due to conflicts within the class. See Smith, 387 F.3d 612 (7th Cir. 2004).
The Smith settlement class would have subsumed two litigation classes that had been certified in Tennessee and Kentucky (apparently in state courts) and which were ready for trial. The Seventh Circuit found that the named Plaintiffs, who had lost their motion for certification of a litigation class prior to agreeing to a settlement, were not adequate representatives of persons falling within these classes who retained the potential to recover punitive damages in addition to actual damages up to ten times the maximum they would have received under the settlement. Smith, 387 F.3d 614.
The United States Supreme Court addressed the doctrine of judicial estoppel in New Hampshire v. Maine, 532 U.S. 742 (2001). The Court first noted that those courts which had previously addressed the doctrine had "uniformly recognized that its purpose is `to protect the integrity of the judicial process,' . . . by `prohibiting parties from deliberately changing positions according to the exigencies of the moment[.]'" Id. at 749-50 (internal citations omitted). Acknowledging that the doctrine was an equitable one, "invoked by a court at its discretion," the Court enumerated the following factors typically considered in exercising that discretion:
First, a party's later position must be "clearly inconsistent" with its earlier position. . . . Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create "the perception that either the first or the second court was misled[.]". . . A third consideration is whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.Id. at 750-51 (internal citations omitted). Ultimately, the Court found New Hampshire to be estopped from re-litigating the location of its eastern boundary with Maine, because New Hampshire had taken an inconsistent position as to the location of the boundary in an earlier consent decree.
In a post- New Hampshire v. Maine case, the Fourth Circuit stated the applicable standards as follows:
In this circuit, we generally require the presence of the following elements before we will apply the doctrine of judicial estoppel: "First, the party sought to be estopped must be seeking to adopt a position that is inconsistent with a stance taken in prior litigation. And the position sought to be estopped must be one of fact rather than law or legal theory. Second, the prior inconsistent position must have been accepted by the court. . . . Finally, the party sought to be estopped must have intentionally misled the court to gain unfair advantage."1000 Friends of Maryland v. Browner, 265 F.3d 216, 226-27 (4th Cir. 2001) (quoting Lowery v. Stovall, 92 F.3d 219, 224 (4th Cir. 1996)). In Browner, the court declined to apply the estoppel doctrine both because the prior position taken related to an issue of law (standing) and because it was not the determinative issue in the prior proceeding. Id. at 227; see also Uzdavines v. Weeks Marine, Inc., 418 F.3d 138, 148 (2d Cir. 2005) (distinguishing New Hampshire v. Maine because the position taken in an earlier stipulation was limited to a different claim and no unfair advantage resulted from that stipulation).
For the reasons set forth below, this court finds that Defendants are not judicially estopped from opposing certification of a litigation class in this action. First, the very nature of a settlement involves the conditional compromise of claims and defenses. Rarely are there any factual concessions involved. An agreement to concede issues for purposes of settlement of a class action is not, therefore, a concession that the issues, if litigated, could be resolved on a classwide basis. Defendants' support of certification of a broad settlement class is not, therefore, necessarily inconsistent with opposition of a narrower litigation class. Second, the settlement class was not, ultimately, approved. Finally, there is no indication that Defendants have misled the court or gained an unfair advantage by first supporting certification of the settlement class and then opposing certification of a litigation class.
Moreover, application of the doctrine of judicial estoppel in the context of class certification is necessarily limited. This is because, regardless of the positions taken by the parties, the court has an independent duty to the class members and the judicial system to insure that both the letter and spirit of Rule 23 are satisfied. See Gariety, 368 F.3d at 366-67 (quoted supra § IV.A.). In the present case, for reasons discussed below, the court concludes that the proposed litigation class should not be certified, regardless of the positions taken by the parties in earlier litigation.
C. Rule 23(a) — Numerosity, Commonality, Typicality and Adequacy
1. Rule 23(a) Standards
The court may certify a class only if the proposed class satisfies all four criteria set forth in Fed.R.Civ.P. 23(a)(1)-(4):
(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if
(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.
Fed.R.Civ.P. 23(a). These requirements are often referred to as the requirements of numerosity, commonality, typicality and adequacy. In the present case, Defendant asserts that Plaintiffs cannot satisfy the last three criteria. Numerosity is conceded.
Commonality. The commonality requirement of Rule 23(a)(2) "does not require that all, or even most issues be common." Central Wesleyan Coll. v. W.R. Grace Co., 143 F.R.D. 628, 636 (D.S.C.), aff'd 6 F.3d 177 (4th Cir. 1993). See also Wright Miller § 1763 at 215 ("Rule 23(a)(2) . . . does not require that all the questions of law and fact raised by the dispute be common").
The Fourth Circuit has characterized Rule 23(a)(2)'s commonality standard as less demanding than the corresponding predominance requirement of Rule 23(b)(3). Gariety, 368 F.3d at 362. Nonetheless, the Fourth Circuit appears to place more weight on the degree of commonality required under Rule 23(a)(2) than do some other courts. See generally Broussard v. Meineke Disc. Muffler Shops, 155 F.3d 331, 340-43 (4th Cir. 1998) (finding significant variations in Plaintiffs' legal and factual arguments precluded findings of commonality or typicality, in part because of variations in the applicable contract language); Stott v. Haworth, 916 F.2d 134, 143 (4th Cir. 1990) (finding commonality and typicality not satisfied where "[t]he only question common to each member of the class is whether . . . his or her position was one that was subject to patronage dismissal" and where resolution of that question would not be dispositive but "simply propels the action into a posture where judicial scrutiny is necessary" requiring a "case by case, position by position, activity by activity analysis"). In any case, Rule 23(a)(2)'s commonality considerations overlap with the predominance considerations of Rule 23(b)(3). See Gariety, 368 F.3d at 362 (discussing relationship between commonality and typicality requirements). The presence of issues requiring individualized determination may, therefore, defeat both requirements. Gunnells, 348 F.3d at 434-438 (holding that claims against one group of defendants, the individual sales agents, could not satisfy either Rule 23's predominance or commonality requirements in part because of the requirement for proof of elements that "can only be established after considerable individual inquiry" including reliance related elements, determination of the scope of duty owed to each plaintiff, and affirmative defenses).
Typicality. Typicality requires that "the claims or defenses of the representative parties [be] typical of the claims or defenses of the class." Fed.R.Civ.P. 23(a)(3). To satisfy the typicality requirement, "a class representative must be part of the class and `possess the same interest and suffer the same injury' as the class members." General Telephone Co. v. Falcon, 457 U.S. 147, 156 (1982) (quoting East Texas Motor Freight Sys., Inc. v. Rodriguez, 431 U.S. 395, 403 (1977). In determining whether this requirement is satisfied, courts look to "whether a sufficient relationship exists between the injury to the named plaintiff and the conduct affecting the class, so that the court may properly attribute a collective nature to the challenged conduct." Alba Conte Herbert Newberg, 1 Newberg on Class Actions § 3:13 at 327 (4th ed. 2002).
The typicality requirement of Rule 23(a)(3) overlaps with the commonality requirement of Rule 23(a)(2). Together, "[t]he typicality and commonality requirements . . . ensure that only those plaintiffs or defendants who can advance the same factual and legal arguments may be grouped together as a class." Mace v. Van Ru Credit Corp., 109 F.3d 338, 341 (7th Cir. 1997), quoted in Broussard, 155 F.3d at 340. Therefore, while the claims of the class members need not be identical to satisfy Rule 23(a)(3), significant differences may preclude certification. See, e.g., Broussard, 155 F.3d at 340-44 (finding "[f]ive significant variations" in the class members' factual and legal arguments precluded satisfaction of the commonality and typicality requirements). Adequacy of Representation. Due process requires that absent class members be afforded adequate representation before they are subject to entry of a binding judgment. Hansberry v. Lee, 311 U.S. 32, 42-43 (1940). Thus, Rule 23(a)(4) requires not only that class counsel be adequate, but also that "the representative parties" be able and so situated that they will "fairly and adequately protect the interests of the class." Fed.R.Civ.P. 23(a)(4). Determining adequacy of representation, therefore, requires the court to determine: (1) whether the named plaintiffs and their counsel have any conflicts of interest with other class members; and (2) whether the named plaintiffs and their counsel will prosecute the action vigorously on behalf of the entire class. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998).
Numerous cases note that the commonality and typicality requirements of Rule 23(a)(2) and 23(a)(3) overlap and should be considered together in determining "whether . . . maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence." E.g., General Tel. Co., 457 U.S. at 157 n. 13 (referring to the combined requirements of Rules 23(a)(2) and (3) as "guideposts" for this determination). See also Broussard, 155 F.3d at 340 (discussing commonality and typicality together); Stott, 916 F.2d at 143 (4th Cir. 1990) (noting overlapping nature of the two Rule 23(a) criteria).
The Fourth Circuit described the class in Broussard as nothing more than "a hodgepodge of factually as well as legally different plaintiffs, . . . that should not have been cobbled together for trial." Id. at 343 (noting that both the elements of the claims and affirmative defenses involved factual and legal variations between the various class members — internal quotation marks and citation omitted). While the differences in the present case may not be as great, they do present similar concerns as discussed below.
Conflicts that are merely hypothetical or speculative will not defeat certification. Gunnells, 348 F.3d at 430 (noting that, to defeat certification, conflicts "must be more than merely speculative or hypothetical," quoting 5 Moore's Federal Practice § 23.25[4][b][ii] (2002)). Nonetheless, a class may not be certified where actual conflicts are reasonably anticipated. See Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 337-338 (4th Cir. 1998) (finding conflicts of interest between different groups of class members that precluded class certification).
2. Rule 23(a) Applied
As discussed above, all class actions must satisfy the four requirements of Rule 23(a): numerosity; commonality; typicality; and adequacy of representation. There is no dispute that the proposed class satisfies the first of these requirements, numerosity. For present purposes, the court also assumes that there are no inherent conflicts which would raise concerns as to adequacy of representation, except to the extent the adequacy of representation overlaps with the commonality and typicality concerns addressed below. These concerns rest on the significant legal and factual variations inherent in proving: (1) the extent of the railroads' rights in the disputed 385 miles of railroad rights-of-way; and (2) the corresponding rights of the putative class members who own land underlying or adjacent to those rights-of-way.
The court begins with the presumption that there are at least some factual and legal questions which may be amenable to common treatment. For instance, Defendants' course of conduct is essentially the same as to all members of the class. Of course, whether that course of conduct was improper as to anyone is the critical inquiry. Resolution of that question requires the court to determine what rights the railroad owned as to any given parcel.
On the other hand, this course of conduct does not appear to be much in dispute as Defendants appear to concede that the rights to lay cable were granted and the cable was installed without determining the extent of the rights of the underlying or adjacent landowners.
As to this critical inquiry, Plaintiffs argue that there is one central legal question which is common to most members of the class. This question relates to the scope of an easement or grant for "railroad purposes." Plaintiffs maintain that this phrase or words of similar import would not entitle the railroad (or its assignee) to lay fiber optic cable in the right-of-way. Defendants respond that there are many variations in the language used in the various forms of private conveyance and grants that do not all use this phrase and would not, in any case, lead to a single interpretation of the phrase.
In any case, a uniform interpretation of the phrase "railroad purposes" leads to a common ultimate result only if that interpretation favors Defendants (that is, includes the right to lay fiber optic cable). Resolution of this question in favor of the class would not, on the other hand, be dispositive of any claim. Rather, a pro-class interpretation of the phrase "railroad purposes" is merely a predicate to determining the nature of the railroads' rights along the 385 miles of right-ofway. It is at this stage that the myriad legal and factual differences between the various class members' claims arise.
To the extent the land at issue is held by the railroad in fee simple, as some portions apparently are, this inquiry would have no relevance. Nonetheless, the court assumes for present purposes that the scope of the phrase "railroad purposes" is significant if not critical to all claims as a resolution of the question in favor of Defendants would make it unnecessary to inquire further as to the nature of the railroads' interests.
At the least, resolving these differing issues would require breaking the class into numerous subclasses with appropriate class representatives. For example, the court might create subclasses based on each of the various state charter statutes and condemnation proceedings as well as establishing subclasses for those whose land was obtained by adverse possession or private conveyance (with the latter, perhaps, broken down by type language used in the conveyance). There is no suggestion that the presently named Plaintiffs are so situated that they could represent each of these subgroups. See generally Smith, 387 F.3d at 614 (stating in context of settlement class that "where there are significant differences among subgroups within the class, `the members of each subgroup cannot be bound to a settlement except by consents given by those who understand that their role is to represent solely the members of their respective subgroups'" quoting Amchem Prods., Inc., v. Windsor, 521 U.S. 591, 620 (1997)). Moreover, as discussed below, the very act of deciding what parcels fall within which subclass would require resolution of complex factual and legal issues which would present serious management concerns. See infra § IV.D. 3-4 (discussing certification under Fed.R.Civ.P. 23(b)(3)).
As noted above, the railroads (and their predecessors) obtained the relevant property rights in a variety of ways, from many sources, and over a period of many years. Thus, while there may be multiple parcels of land for which the scope of the railroads' ownership may be subject to common proof, this proof would not be common to the class as a whole.
The last two categories, by their very nature and in light of the time periods involved, could involve endless variations.
While the commonality requirement under Rule 23(a) is not as strenuous as Rule 23(b)(3)'s predominance test, the lack of common proof as to the central element of the putative class members' claims (which rests on a determination of the nature of the railroads' property interests) suggests that the lesser standards of Rule 23(a) may not be met. See Gariety, 368 F.3d at 362 434-438; Broussard, 155 F.3d at 340-43; and Stott, 916 F.2d at 143. These same concerns raise serious questions as to whether any individual or group of individuals could satisfy the typicality requirements. This is because the necessary differences between the proof of the various class members' claims so overwhelm the "common" issues as to make it unlikely that any individual or group of individuals could have claims "typical" of the class. See Kirkman v. North Carolina Railroad Co., 220 F.R.D. 49 (M.D.N.C. 2004) (finding typicality and commonality requirements not satisfied in very similar class action). As noted in Kirkman,
[t]he problem with [Plaintiff's] position on commonality and typicality is that the Defendants' right to lay cable on a railroad right-of-way is only part of the equation. Other issues . . . include the nature of the Defendants' property interest in each of the disputed rights-of-way, the property interest of each potential class member in the right-of-way at the time of the alleged trespass, and the possibility of statute of limitations defenses for some class members. A class member can only establish trespass if he shows both that he owned the land in question, and that the Defendants had no right to enter that land. By its nature as a property dispute, this inquiry is necessarily an individual one. In essence, a preliminary legal determination is necessary for each potential class member before the Defendants' conduct is even relevant.Kirkman, 220 F.R.D. at 52-52. This proposed class presents precisely the same concerns.
For the reasons set forth above, the court concludes that this action does not satisfy the typicality and commonality requirements of Rule 23(a). Assuming, nonetheless, that some exceptional degree of subclassing could cure these difficulties, the court proceeds to consider whether the class could satisfy the requirements of Rule 23(b).
D. Rule 23(b)(2) and (3)
Plaintiffs seek certification under Rules 23(b)(2) and (b)(3) which read as follows:
(b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition:
* * *
(2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or
(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.
Fed.R.Civ.P. 23(b) (emphasis added).
1. Rule 23(b)(2) Standard.
As the Advisory Committee noted in regard to the 1966 amendments to Rule 23, Rule 23(b)(2)
is intended to reach situations where a party has taken action or refused to take action with respect to a class, and final relief of an injunctive nature or of a corresponding declaratory nature, settling the legality of the behavior with respect to the class as a whole, is appropriate. Declaratory relief "corresponds" to injunctive relief when as a practical matter it affords injunctive relief or serves as a basis for later injunctive relief. This subdivision does not extend to cases in which the appropriate final relief relates exclusively or predominately to money damages.
Rule 23(b)(2) Advisory Committee Notes on 1966 Amendments (emphasis added).
The Fourth Circuit addressed this limitation in Zimmerman v. Bell, in which it held that certification of a class of individuals alleging securities fraud was improper under Rule 23(b)(2) because the relief sought was "essentially monetary relief, to be distributed pro rata to class members." Zimmerman v. Bell, 800 F.2d 386, 389-90 (4th Cir. 1986) (noting "that subsection (b)(2) [is] limited to claims where the relief sought [is] primarily injunctive or declaratory" — quoting Lukenas v. Bryce's Mountain Resort, Inc., 538 F.2d 594, 595 (4th Cir. 1976)). Similarly, in Lukenas the Fourth Circuit held that a class of individuals who wished to rescind their purchases of lots in a subdivision could not be certified under Rule 23(b)(2) because their claim for declaratory or other equitable relief ( i.e. their claim for rescission) was pursued "simply as a predicate for a monetary judgment." Lukenas, 538 F.2d at 595-96.
2. Rule 23(b)(2) Applied.
The amended complaint in this action includes claims for declaratory and injunctive relief. It is clear, however, that this equitable relief is sought merely as a predicate for a monetary judgment. This court will not, therefore, certify a class under Rule 23(b)(2) for the reasons expressed in Zimmerman and Lukenas . See also Kirkman, 220 F.R.D. at 54 (finding certification of very similar class action not to be appropriate under Rule 23(b)(2) "because the class is not primarily seeking injunctive relief" as the class representative admitted "that his primary goal . . . was to obtain monetary damages" and he did "not seek to have the cable removed from the right-of-way").
In any case, for the reasons discussed above as to the Rule 23(a) requirements of typicality and commonality, it is clear that there are significant factual differences between the putative class members' claims such that many will necessarily receive no relief at all even if Plaintiffs' theories prove true. Because of this and the significant differences between the various claims, no equitable or injunctive relief could inure to the class as a whole. For this additional reason, this court declines to certify a class under Rule 23(b)(2).
For example, adjacent landowners would receive no relief where the railroads' rights-of-way are owned in fee. Likewise, adjacent landowners on the "wrong" side of the tracks (the side opposite the location of the cable), would be entitled to no relief even if the railroad did not own the right to allow a third party to lay cable. Adjacent landowners who did not acquire the residual rights to the land under the right-of-way from their predecessors in title would also have no right to relief regardless of the extent of the railroads' ownership of the land.
3. Rule 23(b)(3) Standard.
A class may be certified under Rule 23(b)(3) if "common issues predominate over individual ones" and the court finds "that a class action [is] superior to other available methods of adjudication." Gunnells, 348 F.3d at 423 (upholding certification of class as to claims against one defendant while reversing certification as to another group of defendants).
To satisfy the Rule 23(b)(3) predominance standard, Plaintiffs need only show that "common questions predominate over individual questions as to liability." See Gunnells, 348 F.3d at 428 (noting that the necessity for individualized damages determinations does not, alone, defeat certification of Rule 23(b)(3) class). The existence of individualized questions, whether as to elements of a claim or a defense may, however, preclude class treatment. See generally Gunnells, 348 F.3d at 438 (finding class treatment improper where defendants' "affirmative defenses are not without merit and would require individualized inquiry in at least some cases" — emphasis added). The Fourth Circuit has specifically found that individual issues preclude class treatment: "`when the defendants' affirmative defenses . . . may depend on facts peculiar to each plaintiff's case[.]'" Id. (quoting Broussard, 155 F.3d at 342).
The affirmative defenses at issue in Gunnells included comparative negligence, assumption of the risk and setoff, all of which the court found "pose[d] significant obstacles to class certification" due to the individualized nature of the inquiry. Id.
4. Rule 23(b)(3) Applied.
For the reasons discussed above as to commonality and typicality, it is quite evident that, regardless of the presence of any affirmative defenses, "questions of law or fact common to the members of the class" will not "predominate over any questions affecting only individual members." Fed.R.Civ.P. 23(b)(3). This is, most critically, because of the variety of ways in which the rights-of-way were acquired by the railroads as well as the likely necessity of making transaction-specific inquiries as to portions of the rights-of-way acquired by private conveyance.
As noted in preceding sections of this order, the need for individualized inquiry will not end with the determination of the rights held by the railroads. This is because it is also necessary to determine whether the current adjacent landowners are the persons who retained whatever rights the railroads did not acquire. Resolving this question could require consideration of each landowner's title history.
As noted in earlier sections of this order, the proposed class definition appears to seek certification of a class of "current" landowners (owners at the time of certification). This raises the additional legal question as to whether the current landowner is injured if the trespass is of a permanent nature which occurred when a former owner held title. For present purposes, the court assumes that this question could be resolved by a common legal determination as to whether the trespass was a continuing or permanent trespass. The court also assumes for present purposes that the added complexities could be handled by subclassing if the class was defined to include both "current" owners and those who owned the property at the time of the original trespass. For reasons stated in the text, however, the court finds the class not to be manageable even without consideration of these added complexities.
In this regard, the court agrees with the Seventh Circuit Court of Appeals which found "class action treatment [to be] decidedly inappropriate" in a similar action because "[t]he case involves different conveyances by and to different parties made at different times over a period of more than a century" and under a variety of laws, application of which would require the court to resolve "intricate legal and factual issues." Isaacs v. Sprint Corp., 261 F.3d 679, 682 (7th Cir. 2001). This court also agrees with the district court in Kirkman, which found certification of a very similar single state class action not to satisfy Rule 23(b)(3) "because, even if [the court] were to concede that common issues existed, they do not predominate over individual issues in a way that makes the class action superior to individual adjudication." Kirkman, 220 F.R.D. at 54 (emphasis in original). Compare Fischer v. Virginia Electric and Power Co., 217 F.R.D. 201, 215 (E.D.Va. 2003) (distinguishing situation in Isaacs from case involving conveyances of easements to a single power company over a seventy-five year span within a two-state area because "the variations are limited and appear to be . . . substantially similar in all material respects" and would not "involve the sort of intricate legal and factual issues that the Seventh Circuit feared").
The variety of laws at issue in Isaacs included the laws of 48 states and the District of Columbia. While the present action involves conveyances within a single state, there remain a number of different laws at issue including a variety of different charters and condemnation statutes. The portions of right-of-way obtained by private conveyance will present an even greater diversity. Thus, while Isaacs is distinguishable based on the number of states' laws at issue, this distinction does not render the case inapposite.
The Fischer court was persuaded, in large measure, by Plaintiffs' submission of "two appendices that separated the easement grants into nine categories based on the so-called `purpose clause' in each of 20 ostensibly representative easement forms" and Plaintiff's claim that these "two appendices summarize[d] the universe of easement language" that the court would be required to consider. Id. at 205-06. Although Defendants "pointed out that certain variations in easement language exist[ed]," the court concluded that Defendants had failed to establish "that any such variations [were] likely to have a material impact" on the issues in the case. Id. at 208 ("In sum, Defendants have not identified any variations in easement language that are both material and occur with such frequency as to pose a substantial obstacle to construing the easement grants on the categorical basis that the Plaintiffs propose in their appendices and case management plan.").
To the extent the myriad factual and legal issues in the present action could be made "common" by subclass treatment, the action would, nonetheless, remain unmanageable. See Fed.R.Civ.P. 23(b)(3)(D) (directing court to consider "the difficulties likely to be encountered in the management of a class action"). Indeed, the very act of determining what parcels fall into which subclass would likely prove an unmanageable task and would leave many individual issues as to some subclasses. The determination of which, if any, adjacent landowners retained rights not transferred to the railroads would, likewise, involve the court in highly individualized determinations which this court believes would prove unmanageable. See Kirkman, 220 F.R.D. at 54 (finding that the "difficulty in managing a large number of diverse property claims outweighs any advantage that might be gained by addressing all claims against the Defendants at the same time.").
There are some potential individualized issues relating to an affirmative defense (statute of limitations) in this action. For present purposes, however, the court assumes that these concerns could be managed either by carving out the parcels affected (the limited number where cable was laid more than three years before suit was filed), or in some other manner.
Most critically, sections of the rights-of-way transferred by private conveyance would require at least some individualized treatment.
VI. CONCLUSION
For the reasons set forth above, this court denies Plaintiffs' motion for class certification. The parties are directed to confer and file a status report within thirty days of entry of this order addressing how the individual claims should proceed.
This decision is in keeping with most, if not all, of the federal decisions addressing motions for class certification in similar cases. See, e.g., Isaacs, 261 F.3d at 682 (reversing certification of a similar class and describing it as a "nightmare of a class action"); Kirkman, 220 F.R.D. 49 (discussed supra); Defendants' Memorandum in Opposition, Dkt No. 126 at 5-7) (listing sixteen federal decisions which have considered similar class actions and which have all, either at the trial or appellate level, found certification to be inappropriate).
IT IS SO ORDERED.