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City of Conway v. Shumate

Supreme Court of Arkansas

February 16, 2017

CITY OF CONWAY, AN ARKANSAS MUNICIPALITY APPELLANT
v.
RICHARD SHUMATE, JR., AND DAMON REED, ON BEHALF OF THEMSELVES AND ALL OTHER SIMILARLY SITUATED PERSONS AND ENTITIES APPELLEES

         APPEAL FROM THE FAULKNER COUNTY CIRCUIT COURT [NO. 23CV-2012-855] HONORABLE TROY B. BRASWELL, JR., JUDGE

          Harrington, Miller, Kieklak, Eichmann & Brown, P.A., by: Thomas K. Kieklak and R. Justin Eichmann, for appellant.

          Thrash Law Firm, P.A., by: Thomas P. Thrash and Marcus Neil Bozeman; and Wood Law Firm, by: Russell A. Wood, for appellees.

          RHONDA K. WOOD, Associate Justice.

         A class of police officers and firefighters brought a class-action complaint against their employer, the City of Conway. The class alleged that the City breached its employment contract with them when it failed to allocate sales-tax revenues to fund salary increases. The issue before us now is the circuit court's order certifying the class action. The City has appealed from this order, arguing that individual issues render a class action impractical. We reject this argument and hold that the circuit court was within its discretion when it certified the class.

         I. Facts and Procedural Background

         This is an appeal from a class-certification order. The underlying class-action complaint was filed by a fireman and a police officer against the City of Conway. The first named plaintiff was Richard Shumate, a member of the Conway Police Department since 2007. The second named plaintiff was Damon Reed, a member of the Conway Fire Department since 1994. The dispute stems from a sales-tax resolution passed by Conway voters in 2001. Revenue from this tax, plaintiffs allege, was intended to exclusively fund the salaries of city employees. The City established a pay grid to implement and codify the improved salary structure. The parties stipulated that the City gave raises pursuant to the pay grid from 2001 to 2009 but that no increases have been paid since 2009.

         The crux of this case arises from the plaintiffs' allegation that the City has failed to exclusively allocate the revenues from the sales tax to fund employee salaries. Plaintiffs allege that the City provided police and fire employees with packets that outlined the pay-grid structure that had been implemented under the resolution. Plaintiffs allege further that the pay grid became part of their employment contract. Thus, plaintiffs allege, old employees were induced to stay with the City and new employees were induced to join based on the pay-grid structure. Once the City stopped funding the increases in 2009, plaintiffs alleged the City breached its contract with its employees.

         Plaintiffs' class-action complaint, therefore, was one for breach of contract. At a hearing on class certification, the circuit court certified the following class:

All City of Conway Policemen and Fireman (excluding department heads and elected officials) who were employed by the City of Conway during the period commencing December 1, 2001 through December 31, 2012 (the "Class Period").

         Shumate and Reed were named the class representatives. Further, the court found that there were overarching, common questions that could be efficiently determined on a class-wide basis. The City has appealed from this order under Arkansas Rule of Appellate Procedure- Civil 2(a)(9) (2016).

         II. Standard of Review

         The certification of a class action is governed by Arkansas Rule of Civil Procedure 23 (2016). Circuit courts have broad discretion regarding class certification, and we will not reverse a circuit court's decision to grant or deny class certification absent an abuse of discretion. See Gen. Motors Corp. v. Bryant, 374 Ark. 38, 285 S.W.3d 634 (2008). When reviewing a class-certification order, we focus on the evidence contained in the record to determine whether it supports the circuit court's conclusion regarding certification. Asbury Auto. Grp., Inc. v. Palasack, 366 Ark. 601, 237 S.W.3d 462 (2006). Our focus is "whether the requirements of Rule 23 are met, " and "it is totally immaterial whether the petition will succeed on the merits or even if it states a cause of action." Am. Abstract & Title Co. v. Rice, 358 Ark. 1, 9, 186 S.W.3d 705, 710 (2004). Stated another way, we "will not delve into the merits of the underlying claims when deciding whether the Rule 23 requirements have been met." Nat'l Cash, Inc. v. Loveless, 361 Ark. 112, 116, 205 S.W.3d 127, 130 (2005). Rule 23 imposes ...


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