FROM THE PULASKI COUNTY CIRCUIT COURT [NO. 60CV-16-3432]
HONORABLE WENDELL GRIFFEN, JUDGE REVERSED AND REMANDED WITH
INSTRUCTIONS TO DECERTIFY THE CLASS.
Williams & Anderson, PLC, by: Heather G. Zachary, Philip
E. Kaplan, David M. Powell, and Alec Gaines, for appellants.
Shukur, for appellees.
A. WOMACK, Associate Justice
Street Pawn Shop, LLC, and Rocky Carter ("Arch
Street") appeal the Pulaski County Circuit Court's
order granting class certification for a group of Arch
Street's customers including Anita Gunn and Maurice
Spencer. Appellees allege that Arch Street's business
practices violated the anti-usury language of amendment 89 to
the Arkansas Constitution and of the Arkansas Deceptive Trade
Practices Act. The circuit court's order defined the
class as "[a]ny and all persons who have owed, currently
owe or will incur debts directly arising out of pawn
transactions with Defendant Arch Street Pawn Shop, LLC within
five years of the date this Complaint was filed and
continuing up through and until judgment may be rendered in
this matter." Arch Street argues on appeal that the
circuit court abused its discretion in determining that a
class exists, in determining that the putative class
satisfied the requirements of Arkansas Rule of Civil
Procedure 23 (2016), and in refusing to admit testimony
relevant to these issues at the hearing on class
certification. We reverse and remand with instructions to
decertify the class.
review a trial court's decision to certify a class under
an abuse of discretion standard. See SEECO, Inc. v.
Hales, 330 Ark. 402, 954 S.W.2d 234 (1997). When
scrutinizing the trial court's decision, we look to the
evidence in the record to see if the grant of certification
is supported. See Ark. Blue Cross & Blue Shield v.
Hicks, 349 Ark. 269, 279, 78 S.W.3d 58, 64 (2002). It is
not appropriate for either the trial court or this court to
delve into the merits of the legal claims asserted by the
class representatives at the certification stage; the only
inquiries are whether a class exists and, if so, whether that
class satisfies the requirements of Rule 23. Id.
Street argued below and maintains on appeal that
certification is improper in this case because no class is
"ascertainable." Ascertainability is an aspect of
the requirement that a class must exist prior to running that
class through Rule 23's gauntlet of requirements.
See, e.g., Sw. Bell Yellow Pages, Inc. v. Pipkin
Enters., Inc., 359 Ark. 402, 405, 198 S.W.3d 115, 117
(2004). The class definition must lay out objective factors
from which it is "administratively feasible" for
the circuit court to ascertain "whether a particular
individual is a member of the proposed class."
Id. In Southwestern Bell, for example, the
circuit court certified a class definition including all the
defendant's customers who were charged "usurious
interest charges." Id. We reversed, however,
because the legal dispute in the case was whether the rates
charged amounted to usury at all. Using the class definition
to sort out which customers were or were not members of the
class would require a resolution of the ultimate issue in the
the class definition attempts to lasso all who "owe or
will incur debts" springing from business with Arch
Street. Given the nature of the legal claims, however,
proceeding with class litigation on this basis would put the
cart before the horse just as in Southwestern Bell.
The ultimate legal issue in this case is whether the
transactions Arch Street typically engages in are
"loans" that create "debts" for which
appellees "owe" payment as those terms are
contemplated in, or controlled by, the Arkansas
Constitution's anti-usury language. See Ark.
Const. amend. 89, § 3. Determining whether a particular
pawn transaction was a loan and thus created a debt is the
sort of predicate question that would have to be determined
by reference to each potential class member's situation
rather than a uniform set of objective criteria. All
customers at Arch Street received similarly phrased pawn
tickets. However, some customers redeemed their pawned items,
some surrendered their pledges intending to redeem them but
ultimately did not, and still others pawned items with no
intent to redeem them at all. Proposed class definitions
posing such administrative difficulties are not suitable for
certification. Because the class as defined is not
ascertainable as a ...