ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:
R. BROCK JORDAN IRWIN B. LEVIN
Rubin & Levin, P.C. DAVID J. CUTSHAW
Indianapolis, Indiana SCOTT D. GILCHRIST
ERIC S. PAVLACK
Cohen & Malad, L.L.P.
KARL L. MULVANEY
CANDACE L. SAGE
Bingham McHale, LLP
CORE FUNDING GROUP, LLC, ) ) Appellant-Defendant, ) ) vs. ) No. 49A05-0208-CV-364 ) JAMES H. YOUNG, on behalf of himself and all ) others similarly situated, ) ) Appellee-Plaintiff. )
OPINION FOR PUBLICATION
(A) Prerequisites to a class action. One or more members of
a class may sue or be sued as representative parties on behalf of
all only if:
(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.
(B) Class actions maintainable. An action may be maintained as a class action if the prerequisites of subdivision (A) are satisfied, and in addition:
(1) the prosecution of separate actions by or against individual members of the class would create a risk of:
(a) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or
(b) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interest of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or
(2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or
(3) the court finds that the 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.
(C) Determination by order whether class action to be maintained--Notice--Judgment--Actions conducted partially as class actions.
(1) As soon as practicable after the commencement of an action brought as a class action, the court, upon hearing or waiver of hearing, See footnote shall determine by order whether it is to be so maintained. An order under this subdivision may be conditional, and may be altered or amended before the decision on the merits.
(Emphasis and footnote supplied.)
Core asserts appellate review of the class-certification issue is permissible and appropriate despite the default judgment, relying on Davis v. Hutchins, 321 F.3d 641 (7th Cir. 2003). Davis does not support Cores position. Davis brought a class action against Hutchins, an attorney, alleging Hutchins violated the Fair Debt Collection Practices Act. The trial court entered a default judgment and awarded attorneys fees, $2,000 in actual damages for Davis, and $500,000 in damages for the class.
Hutchins appealed, arguing among other things that the default judgment and the award of class-action damages were error. The Seventh Circuit determined the default was properly entered but that class-action damages should not have been awarded. Hutchins argued, as does Core in the case before us, that at least some of the class certification requirements were lacking. See Associated Med. Networks, Ltd. v. Lewis, 785 N.E.2d 230, 235 (Ind. Ct. App. 2003) (in determining the propriety of class action certification, a trial court must first determine whether the class meets the four prerequisites of T.R. 23(A), generally known as numerosity, commonality, typicality, and adequacy of representation). However, the Seventh Circuit did not address those arguments because although the district court awarded class damages, no class had ever been certified.
Davis argued the class was effectively certified by the entry of default because when a default is entered, the factual allegations in the complaint are deemed admitted by the defendant. 321 F.3d at 648. The panel acknowledged the general principle that factual allegations in the complaint are deemed admitted by the defendant upon default, id., but noted that Rule 23 imposes an independent duty on the trial court to determine by order that the requirements of Rule 23 are met regardless of the defendants admissions. Id. A class may be certified only if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied. Id. at 649 (quoting Gen. Tel. Co. of the S.W. v. Falcon, 457 U.S. 147, 160-61 (1982)). That requirement serves the important function of protecting absent class members whose rights might be affected by the class certification. Id.
No such judicial determination had been made in Davis; however, in the case before us the trial court did determine by order that the requirements of T.R. 23 had been satisfied. Core asserts the required rigorous analysis was not performed, apparently on the ground Core did not appear at the class certification hearing to oppose Youngs motion.
We decline to adopt Cores apparent premise that a trial court cannot conduct a sufficiently rigorous analysis of the propriety of a class action without participation by the defendant. Under Cores rationale, a defendant could prevent any class action from ever going forward merely by failing to participate in the class certification phase of the litigation.
Youngs complaint included the allegations necessary to support an action under the TCPA and a class action under T.R. 23, the trial court conducted a hearing on the class certification, and it issued an order certifying the class. Youngs complaint alleged, among other things, a violation of the TCPA and it defined the class as all persons or entities in the United States who received facsimile transmissions from Core Funding that contained advertising during the two years before the complaint was filed. (Appellants App. at 15.) It alleged at least forty people had received such faxes, so it was impracticable to join all the individual class members. It alleged common questions of law and fact that predominated over any questions affecting individual class members. It alleged Youngs claims were typical of the class claims and that Young would protect the interests of the class. Young moved for a hearing on his petition for certification of the class and the trial court held the hearing. Core submitted a motion asking the court to reconsider the class certification and it attached case law supporting its motion. The trial courts analysis of the class certification question was as thorough as it could be without Cores participation.
We decline to hold the trial courts analysis of the propriety of a class action was not sufficiently rigorous. Cores challenge to the class certification is therefore foreclosed by the default judgment against it.