


NUMBER 13-00-321-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI
____________________________________________________________________


REYNOLDS METALS COMPANY,					Appellant,


v.

LESLIE MUMPHORD AND CATHEDRAL OF THE PALM,	Appellees.

____________________________________________________________________


On appeal from the 214th District Court of Nueces County,

Texas.
____________________________________________________________________


O P I N I O N

Before Chief Justice Valdez and Justices Hinojosa and

Rodriguez

Opinion by Justice Hinojosa

	This is an interlocutory appeal from the trial court's order certifying
a class.(1)  In five issues, appellant, Reynolds Metals Company ("Reynolds
Metals"), contends the trial court erred in certifying the class because
of the lack of classwide impact, the failure of common issues to
predominate, the unmanageability of the class, and the lack of a trial
plan showing how class claims are to be tried.  We remand this case to
the trial court for a new determination of whether class certification is
appropriate.

A.  Background
	Various plaintiffs who sold recyclable metals to Reynolds Metals
and Commercial Metals Company ("Commercial Metals") sued Reynolds
Metals, Commercial Metals and Kenneth Hobbs,(2) alleging the
defendants violated numerous provisions of the Texas Free Enterprise
and Antitrust Act of 1983 ("TFEAA").  See Tex. Bus. & Comm. Code Ann.
§ 15.01 (Vernon 1987).  Specifically, they alleged that Reynolds Metals
and Commercial Metals conspired to drive three other companies out
of the scrap metal business by paying sellers of used beverage
containers ("UBCs") an above-market-average price.(3)  The plaintiffs
further alleged that after driving their competitors out of the UBC
market, Reynolds Metals and Commercial Metals began to pay UBC
sellers below-market-average prices to recoup the profits lost while
driving their competitors out of the business.(4)  The plaintiffs alleged the
defendants violated the TFEAA by:

(1)	entering into a contract, combination, or conspiracy in
restraint of trade or commerce (Tex. Bus. & Comm. Code
Ann. § 15.05(a)(Vernon Supp. 2001));


(2)	engaging in conduct to monopolize, attempting to
monopolize, or conspiring to monopolize any part of
trade or commerce (Tex. Bus. & Comm. Code Ann. §
15.05(b)(Vernon Supp. 2001)); and


(3)	engaging in conduct to acquire, directly or indirectly,
the whole or part of the stock or other share capital or
the assets of any other person or persons, where the
effect of such acquisition may be to lessen competition
substantially in any line of trade or commerce (Tex.
Bus. & Comm. Code Ann. § 15.05(d)(Vernon Supp.
2001)).


	In a successful suit under the TFEAA, the plaintiffs may recover
actual damages, interest on actual damages, costs and attorney's fees. 
Tex. Bus. & Comm. Code Ann. § 15.21(a)(1)(Vernon 1987).  Upon a
finding by the trier of fact that the unlawful conduct was willful or
flagrant, as appellees have alleged, the plaintiffs may also recover
statutory damages of treble the actual damages, costs and attorney's
fees.  Id.

	Upon motion by the plaintiffs, the trial court found that the
requirements of Texas Rules of Civil Procedure 42(a) and 42(b)(4) had
been met, and certified a class defined as:

[a]ll recyclers who sold UBCs to Commercial Metal Company
or Reynolds Metals Company in Nueces County, Texas or
Kingsville, Texas in quantities less than 500 pounds per
transaction, and limited to the time period beginning
February, 1993 through August, 1996.


The court named appellees, Leslie Mumphord and the Cathedral of the
Palms, as class representatives.



B.  Standard of Review
	It is well established that a trial court has broad discretion in
determining whether to grant or deny class certification.  Entex v. City
of Pearland, 990 S.W.2d  904, 909 (Tex. App.--Houston [14th Dist.]
1999, no pet.); Union Pac. Res. Co. v. Chilek, 966 S.W.2d 117, 120
(Tex. App.--Austin 1998, pet. dism'd w.o.j.).  A class certification order
will be reversed only if the record shows a clear abuse of discretion. 
General Motors v. Bloyed, 916 S.W.2d 949, 955 (Tex. 1996);
FirstCollect, Inc. v. Armstrong, 976 S.W.2d 294, 298 (Tex.
App.--Corpus Christi 1998, pet. dism'd w.o.j.); Chilek, 966 S.W.2d at
120; Central Power & Light, 962 S.W.2d at 607.  A trial court abuses its
discretion if it acts arbitrarily, unreasonably or without reference to any
guiding principles.  Downer v. Aquamarine Operators, Inc., 701 S.W.2d
238, 242 (Tex. 1985); Entex, 990 S.W.2d at 909; FirstCollect, 976
S.W.2d at 298.  

	A trial court also abuses its discretion when it fails to properly
apply the law to undisputed facts, or when its ruling is based on factual
assertions not supported by material in the record.  Texas Commerce
Bank Nat'l Ass'n v. Wood, 994 S.W.2d 796, 801 (Tex. App.--Corpus
Christi 1999, pet. dism'd); Hi Lo Auto Supply, L.P. v. Beresky, 986
S.W.2d 382, 386 (Tex. App.--Beaumont 1999, writ mand. denied).  On
appeal, the reviewing court must view the evidence in the light most
favorable to the trial court's ruling and indulge every presumption in
favor of that ruling.  Wood, 994 S.W.2d at 801; Entex, 990 S.W.2d at
908; FirstCollect, 976 S.W.2d at 299. In applying this standard, the
reviewing court must defer to the trial court's factual determinations, so
long as they are properly supported by the record, while reviewing its
legal determinations de novo.  Entex, 990 S.W.2d at 909; Remington
Arms Co., Inc. v. Luna, 966 S.W.2d 641, 643 (Tex. App.--San Antonio
1998, pet. denied). 

C.  General Requirements for Class Certification
	Class action suits furnish an efficient means for numerous
claimants with a common complaint to obtain a remedy where it is not
economically feasible to obtain relief within the traditional framework of
a multiplicity of small individual suits for damages.  Bloyed, 916 S.W.2d
at 952-53 (citing Deposit Guar. Nat'l Bank v. Roper, 445 U.S. 326, 339
(1980)).  Class actions also facilitate the spreading of litigation costs
among numerous litigants with similar claims.  Bloyed, 916 S.W.2d at
952-53 (citing U. S. Parole Comm'n v. Geraghty, 445 U.S. 388, 403
(1980)).  However, even though it is an efficient device, there is no right
to litigate a claim as a class action; rule 42 provides only that the court
may certify a class action if the plaintiff satisfies the requirements of the
rule.  Ford Motor Co. v. Sheldon, 22 S.W.3d 444, 452-53 (Tex.
2000)(citing Weatherly Deloitte & Touche, 905 S.W.2d 642, 647 (Tex.
App.--Houston [14th Dist.] 1995, writ dism'd w.o.j.), mand. denied,
951 S.W.2d 394 (Tex. 1997)).  The class action format must not unduly
restrict a party from presenting viable claims or defenses without that
party's consent.  Southwestern Refining Co. v. Bernal, 22 S.W.3d 425,
437 (Tex. 2000) (citing Tex. R. Civ. P. 815 and Tex. Gov't Code §
22.004(a)(state procedural rules may not abridge, enlarge, or modify the
substantive rights of a litigant)).  The class action device is not meant
to alter the parties' burden of proof, right to a jury trial, or the
substantive prerequisites to recovery.  Bernal, 22 S.W.3d at 437.

	All class actions must satisfy four threshold requirements: (1)
numerosity; (2) commonality; (3) typicality; and (4) adequacy of
representation.  Id. at 433.  These requirements are set out in Texas
Rule of Civil Procedure 42(a), which provides:

(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. 


Tex. R. Civ. P. 42(a). 
	Additionally, at least one of the enumerated requirements set out
in rule 42(b) must be met.  Tex. R. Civ. P. 42(b); Bernal, 22 S.W.3d at
433.  In this case, the trial court found that the requirements of rule
42(b)(4) were met.  Rule 42(b)(4) provides:

(b) Class Actions Maintainable.  An action may be
maintained as a class action if the prerequisites of
subdivision (a) are satisfied, and in addition


* * * * *

 	(4)  the court finds that 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.


Tex. R. Civ. P. 42(b)(4).(5)
	The trial court is charged with the initial task of identifying the
substantive law issues and determining whether the character and
nature of the class satisfies the requirements of class action. 
FirstCollect, 976 S.W.2d at 299; Central Power & Light, 962 S.W.2d at
627; Rio Grande Valley Gas Co. v. City of Pharr, 962 S.W.2d 631, 640
(Tex. App.--Corpus Christi 1997, pet. dism'd).  The plaintiffs' right to
proceed as a class may be established by materials which need not
meet all the requirements of admissibility at trial.  Wood, 994 S.W.2d
at 801; Health & Tennis Corp. of Am. v. Jackson, 928 S.W.2d 583, 587
(Tex. App.--San Antonio 1996, writ dism'd w.o.j.); Vinson v. Texas
Commerce Nat'l Bank, 880 S.W.2d 820 (Tex. App.--Dallas 1994, no
writ); Dresser Indus., Inc. v. Snell, 847 S.W.2d 367, 376 (Tex. App.--El
Paso 1993, no writ).  In Bernal, the supreme court stated:

it is improper to certify a class without knowing how the
claims can and will likely be tried.  A trial court's certification
order must indicate how the claims will likely be tried so that
conformance with Rule 42 may be meaningfully evaluated. 
"Given the plaintiffs' burden, a court cannot rely on [mere]
assurances of counsel that any problems with predominance
or superiority can be overcome."  To make a proper analysis,
"going beyond the pleadings is necessary, as a court must
understand the claims, defenses, relevant facts, and
applicable substantive law in order to make a meaningful
determination of the certification issues."  Any proposal to
expedite resolving individual issues must not unduly restrict
a party from presenting viable claims or defenses without
that party's consent.  If it is not determinable from the outset
that the individual issues can be considered in a
manageable, time-efficient, yet fair manner, then certification
is not appropriate.


Bernal, 22 S.W.3d at 435-36; see also Nissan Motor Co., Ltd. v. Fry, 27
S.W.2d 573, 591-92 (Tex. App.--Corpus Christi 2000, pet. denied).  

D.  Lack of a Trial Plan
	In its fifth issue, Reynolds Metals contends the trial court erred
because the certification order does not include a trial plan showing
how individual claims will likely be tried.

 Bernal clearly requires that the certification order contain a plan for
dealing with individual issues, and for the specifics of the plan to be
considered by the trial court in determining whether the rule 42
requirements of predominance of common issues over individual ones
and superiority of the class action method have been met.  See Bernal,
22 S.W.3d at 435; see also Nissan, 27 S.W.2d at 592.

	The record reflects that the trial court issued its certification order
before the supreme court issued Bernal.  We do not fault the trial court
for failing to predict that a trial plan would be later mandated by the
Texas Supreme Court.  However, because predominance of common
issues over individual ones and superiority of the class action method
are hotly contested in this case, we conclude that a trial plan is
necessary.  We sustain Reynolds Metals' fifth issue.

	In light of our disposition of this issue, we decline to address
Reynolds Metals' remaining issues at this time.  Tex. R. App. P. 47.1.

	We remand this case to the trial court for a new determination of
whether, under the Bernal standards, class certification is appropriate. 
See Bernal, 22 S.W.3d at 435; see also Nissan, 27 S.W.3d at 592.




							FEDERICO G. HINOJOSA

							Justice



Publish.  Tex. R. App. P. 47.3.


Opinion delivered and filed this 

the 3rd day of May, 2001.

1. A party may complain of all matters pertaining to a class action certification
by interlocutory appeal.  Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(3) (Vernon
Supp. 2001); Nissan Motor Co., Ltd. v. Fry, 27 S.W.2d 573 (Tex. App.--Corpus Christi
2000, pet. denied); Central Power & Light Co. v. City of San Juan, 962 S.W.2d 602,
607 (Tex. App.--Corpus Christi 1998, pet. dism'd w.o.j.).  
2. Kenneth Hobbs is an employee of Commercial Metals.  Neither Commercial
Metals nor Hobbs are parties to this appeal.
3. This is referred to by the plaintiffs as the "predatory phase."  
4. This is referred to by the plaintiffs as the "recoupment phase."  
5. Appellees pleaded that the requisites of rule 42(b)(1) were also met.  Rule
42(b)(1) permits certification of a class when the plaintiffs show that prosecution of
separate actions by different plaintiffs creates a risk of varying adjudications.  See Tex.
R. Civ. P. 42(b)(1).  However, the trial court found only that the requirements of rule
42(b)(4) had been met.

