You Need to Identify Other Class Members to Certify a Class; Dempsey v. Winski

Not every lawyer has litigated a class action, and they are a different kind of animal. In order to certify a case as a class action, you need to convince the court that the case is amenable to class certification. This involves proof on each factor in a multifactor test. This case shows the dangers of attempting to certify a case for class treatment the easy way.

Dempsey owns land in LaPorte County. The County reassessed the real property for taxation purposes in 2008. After the reassessment was completed, taxpayers received reconciliation bills, some of which showed reduced tax bills. In those cases, a taxpayer would typically receive a check, but if the taxpayer owed delinquent taxes, a credit would be applied to the delinquency. However, the County did not pay interest on these amounts. Rather, it offset the interest (4%) against any delinquency charge (5% or 10%).

Dempsey sued, arguing that he should have been paid the interest. After the parties conducted some discovery, Dempsey moved for class certification. In support of the motion, Dempsey estimated that numerous taxpayers would fall within the proposed class but did not specifically identify any other class member. Rather, Dempsey asked that this identification be done after class certification. The trial court denied Dempsey’s motion, and Dempsey appealed.

On appeal, the Court noted that the merits of an action are unrelated to the question of whether a class should be certified. Rather, the inquiry needs to focus on Rule 23’s requirements, which include showing that “common questions of law or fact
predominate over individual ones and a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” And the Court found it “difficult, if not impossible, to” apply this test because Dempsey had not identified any
other putative class members.

Despite the breadth of class description, Dempsey has not identified a person (other than arguably himself) falling within the proposed class. He implicitly argues that the Auditor’s office responded to an external communication by denying interest in all cases where the refund was traceable to the reassessment. He then offers argument based upon statistical probability, that is, with 88,000 parcels of real estate in LaPorte County, someone would surely fall within his proposed class. This is a logical proposition, but it stops short of Dempsey meeting his burden of proof to show that common issues predominate.

This failure to show that there are actually any other members of the putative class meant that Dempsey also failed to show the superiority of a class action to resolve claims. Fundamentally, Dempsey’s problem in the Court’s eyes was that he failed to do the work before moving for class certification.

Dempsey had to show that the proposed class action was the superior method of resolution. He insists that the broad class description can be modified, and he is willing to strenuously represent anyone who can be identified as an aggrieved person after examination of the relevant paper records. However, he did not accept the invitation to review records in discovery. At bottom, Dempsey has not identified any person he expects to vigorously represent. He suggests that other taxpayers are ignorant of their rights and are not participating in other litigation. But he simply does not know what taxpayers, if any, have initiated individual litigation or are interested in doing so. With the core deficit of information, Dempsey could not by bald assertions meet his burden of showing that class action litigation was superior to other methods for the fair and efficient adjudication of the controversy.

The denial of Dempsey’s motion to certify the class was affirmed.

Lessons:
1. In order to maintain a class action, you need to put the work in to identify at least one absent class member.
2. Statistical roof that there may be absent class members is not sufficient to show that common issues predominate over individual issues in a class action.
3. You cannot show a class action is superior to other methods for adjudicating a controversy if you cannot identify any absent class members.

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