Manning v. Liberty Tire Servs. of Ohio, LLC

577 S.W.3d 102

Betty MANNING and Jenny Cotton, Appellants

v.LIBERTY TIRE SERVICES OF OHIO, LLC; and Bohannon Properties, LLC, Appellees

NO. 2016-CA-001719-ME

Court of Appeals of Kentucky.

APRIL 12, 2019; 10:00 A.M.

BRIEFS AND ORAL ARGUMENTS FOR APPELLANTS: Jasper D. Ward, IV, Alex C. Davis, Louisville, Kentucky.

BRIEF FOR APPELLEE LIBERTY TIRE SERVICES OF OHIO, LLC: Edward H. Stopher, Rod D. Payne, Todd P. Greer, Louisville, Kentucky.

BRIEF FOR APPELLEE BOHANNON PROPERTIES, LLC: Patrick B. Healy, Judd Uhl, Fort Wright, Kentucky.

ORAL ARGUMENTS FOR APPELLEE LIBERTY TIRE SERVICES OF OHIO, LLC: Todd P. Greer, Rod D. Payne, Louisville, Kentucky.

ORAL ARGUMENT FOR BOHANNON PROPERTIES, LLC: Patrick B. Healy, Fort Wright, Kentucky.

BEFORE: ACREE, MAZE AND NICKELL, JUDGES.

OPINION

ACREE, JUDGE:

Betty Manning and Jenny Cotton appeal the Jefferson Circuit Court’s November 3, 2016 opinion and order denying their motion for class certification. Appellants contend the circuit court erred in failing to conclude that they met their burden of demonstrating that a class should be certified under CR ¹ 23.01 and 23.02. We affirm.

FACTS AND PROCEDURE

On November 3, 2014, tires located at a recycling facility leased by appellee Liberty Tire Services and owned by appellee Bohannon Properties caught fire and burned for more than two days. A smoke plume from the fire deposited soot, ash, and other particulate matter onto surrounding neighborhoods, homes, automobiles, and driveways. At 10:15 a.m., local authorities issued a Shelter-In-Place (SIP) order for persons living within a one-mile radius of the fire. The order restricted residents from leaving their homes and from being outside for a defined period of time. Authorities lifted the SIP order the next day, November 4, 2014, around 2:59 p.m. Manning was subject to the SIP order; Cotton was not.

Air monitoring conducted during the fire revealed high levels of harmful particulate matter in the surrounding neighborhood, with concentrations as high as 2,200 micrograms per cubic meter, which is considered unhealthy for the general population according to standards promulgated by the U.S. Environmental Protection Agency. Due to an "inversion" weather pattern, the soot and ash in the particulate plume traveled north and stayed close to the ground in the early hours of November 4, 2014, before tapering off later that day when a soil cap was placed on the burning tires.

The Center for Toxicology and Environmental Health (CTEH) performed additional air monitoring at Liberty Tires' request. CTEH tested for levels of particulate matter in the surrounding community, and tested the air for benzene, toluene, and other volatile organic compounds normally found in tire smoke. CTEH discovered that harmful levels of particulate matter exceeded health guidelines for brief periods of time but did not reach unhealthy levels when projected over a longer period of time.

On November 5, 2014, Appellants filed this action against Liberty Tire and Bohannon Properties alleging their reckless, intentional, and negligent conduct caused substantial damage to them and members of a putative class. To ascertain the extent of the particulate matter, soot, and ash in the neighborhood, Appellants retained a forensic meteorology expert. That expert produced a report that used air quality data to illustrate the geographic area north of the tire facility where soot and ash were deposited on surrounding homes. The expert offered the following conclusion:

It is reasonable to expect, as shown on the model data and the extent of the smoke plume, that there would be soot/ash/particulates deposited onto the property within the path of the plume as a result of the fire. [Appellants] were exposed over several days to large quantities of particulate matter contained within the fire smoke plume.

Both non-visible particulates, PM10, PM2.5 and smaller, and large soot and ash were deposited downwind from the origin of the facility fire. The visible suspended particulates (soot and ash) were observed to travel for miles downwind of the fire origin with deposition of soot and ash on cars, homes, and neighborhoods.

The Appellants' homes are located within the area the expert modeled the smoke plume to have traveled, and the expert’s report included estimates for the amount of particulate matter deposited on Appellants' properties. Appellants also submitted a report outlining methods for calculating the number of affected class members. That report estimated the proposed class would include 2,500 individuals.

Appellants then moved for class certification. They sought to certify two sub-classes: one related to the SIP order, and the other to the particulate smoke plume. Appellees opposed class certification arguing, among other things, that the proposed class definitions were flawed, that the proposed class representatives did not raise claims typical of those of the class, and that individual issues would predominate over common ones, making Appellants' claims unsuited for class adjudication.

By order entered November 3, 2016, the circuit court denied Appellants' class-certification motion. It found the CR 23.01 prerequisites – numerosity, commonality, typicality, and adequacy of representation – not met, and the CR 23.02(c) requirements – that class litigation is superior and common questions predominate over individual ones – unsatisfied. Appellants appealed.

The sole question before us is whether the circuit court appropriately denied class certification. Appellants challenge each of the circuit court’s findings.²

STANDARD OF REVIEW

The decision to deny class certification is reviewed for an abuse of discretion. Randleman v. Fidelity Nat'l Title Ins. Co. , 646 F.3d 347, 351 (6th Cir. 2011) ;³ Sowders v. Atkins , 646 S.W.2d 344, 346 (Ky. 1983). "The test for abuse of discretion is whether the trial judge’s decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Goodyear Tire & Rubber Co. v. Thompson , 11 S.W.3d 575, 581 (Ky. 2000) (citation omitted).⁴ As this Court undertakes its review, "[w]e must focus our analysis on this limited issue [of class certification] and in so doing scrupulously respect the limitations of the crossover between (1) reviewing issues implicating the merits of the case that happen to affect the class-certification analysis and (2) limiting our review to the class-certification issue itself." Hensley v. Haynes Trucking, LLC , 549 S.W.3d 430, 436 (Ky. 2018).

ANALYSIS

The class action is "an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Wal-Mart Stores, Inc. v. Dukes , 564 U.S. 338, 348, 131 S.Ct. 2541, 2550, 180 L.Ed.2d 374 (2011) (quoting Califano v. Yamasaki , 442 U.S. 682, 700-01, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979) ). In Kentucky, CR 23.01 and 23.02 govern class certification. Taken together, the rules provide a comprehensive roadmap to class certification. The mandates of both rules must be satisfied before a class may be certified. The party seeking certification bears the burden of proof. Young v. Nationwide Mut. Ins. Co. , 693 F.3d 532, 537 (6th Cir. 2012).

Here, the circuit court found Appellants failed to prove a single element of CR 23.01 and 23.02. Before turning to the rules, however, we must address an initial, potentially dispositive consideration raised by the Appellees related to the proposed class definition.

A. Class Definition

Although CR 23 does not explicitly command evaluation of the proposed class definition, "the definition of the class is an essential prerequisite to maintaining a class action." Powell v. Tosh , 280 F.R.D. 296, 311 (W.D. Ky. 2012) (citation omitted). Accordingly, "[b]efore a court may certify a class pursuant to [CR] 23, ‘the class definition must be sufficiently definite so that it is administratively feasible for the court to determine whether a particular individual is a member of the proposed class.’ " Young , 693 F.3d at 537-38 (quoting 5 James W. Moore et al., Moore’s Federal Practice § 23.21[1] (Matthew Bender 3d ed. 1997) ("Although the text of Rule 23(a) is silent on the matter, a class must not only exist, the class must be susceptible of precise definition. There can be no class action if the proposed class is ‘amorphous’ or ‘imprecise.’ ") ).

In this case, Appellants sought certification of a class with two subclasses, defined as follows:

All persons whose dwelling was within an area approximately one mile from the tire fire at 14201 Bohannon Avenue, Louisville, Kentucky, and was subject to a Shelter in Place Order between November 3, 2014 and November 4, 2014.

All persons or property owners on whose property the tire fire at Liberty Tires caused soot, ash, smoke, or other physical remnants to land on November 3 and/or November 4, 2014.

Appellees argue the proposed class definition is nothing more than an impermissible "fail-safe" class. We disagree.

This first step in our analysis makes us all the more mindful of our duty to "scrupulously respect the limitations of the crossover" between reviewing class certification and the merits of the claims. Hensley , 549 S.W.3d at 436. This is because the definition of a "fail-safe" class is "a class that cannot be defined until the case is resolved on its merits." Young , 693 F.3d at 538. It bases its membership not on objective criteria, but on the legal validity of each member’s claim. Id. To determine class membership, the merits of each individual claim must be examined. See In re Rodriguez , 695 F.3d 360, 369-70 (5th Cir. 2012) ("A fail-safe class is a class whose membership can only be ascertained by a determination of the merits of the case because the class is defined in terms of the ultimate question of liability."). By its very nature, a fail-safe class "includes only those who are entitled to relief." Young , 693 F.3d at 538. "Such a class is prohibited because it would allow putative class members to seek a remedy but not...