Corley v. Orangefield Independent School District

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
October 13, 2005
FOR THE FIFTH CIRCUIT
_____________________ Charles R. Fulbruge III
Clerk
No. 04-41113
_____________________

DUANE T. CORLEY; ET AL.,
Plaintiffs,
DUANE T. CORLEY; WILLIAM A. ROANE,

Plaintiffs - Appellants,

versus

ORANGEFIELD INDEPENDENT SCHOOL DISTRICT; WILLIAM EDWARD
WINFREE; PAUL CORMIER, Individually and as Independent
Executor of the Estate of Jewell E. Cormier, deceased; ROBERT
CORMIER; DEVRA CORMIER; CORMIER FAMILY LIMITED PARTNERSHIP,

Intervenor Plaintiffs - Appellees,

versus

ENTERGY TECHNOLOGY HOLDING CO.; ENTERGY CORP.; ENTERGY
ARKANSAS INC.; ENTERGY LOUISIANA INC.; ENTERGY MISSISSIPPI
INC.; ENTERGY SERVICES INC.; ENTERGY TECHNOLOGY CO.,

Defendants - Appellees.

-----------------------------------------------------------------

DOUGLAS C. DISHMAN; TIM E. DISHMAN,

Plaintiffs - Appellants,

versus

ENTERGY CORPORATION; ENTERGY GULF STATES INC.;
ENTERGY ARKANSAS INC.; ENTERGY LOUISIANA INC.;
ENTERGY MISSISSIPPI INC.; ENTERGY SERVICES INC.;
ENTERGY TECHNOLOGY HOLDING COMPANY; ENTERGY
TECHNOLOGY COMPANY,

Defendants - Appellees.

*****************************************************************
 _____________________

consolidated with
No. 04-41127
_____________________

DUANE T. CORLEY; ET AL.,

Plaintiffs,

DUANE T. CORLEY; WILLIAM A. ROANE;
FEAR FARM INC.; RUBY B. WILSON,

Plaintiffs - Appellants,

versus

ORANGEFIELD INDEPENDENT SCHOOL DISTRICT; WILLIAM EDWARD
WINFREE; PAUL CORMIER, Individually and as Independent
Executor of the Estate of Jewell E. Cormier, Deceased;
ROBERT CORMIER; DEVRA CORMIER; CORMIER FAMILY LIMITED
PARTNERSHIP,

Intervenor Plaintiffs - Appellees,

versus

ENTERGY TECHNOLOGY HOLDING CO.; ENTERGY CORP.; ENTERGY
ARKANSAS INC.; ENTERGY LOUISIANA INC.; ENTERGY MISSISSIPPI
INC.; ENTERGY SERVICES INC.; ENTERGY TECHNOLOGY CO.,

Defendants - Appellees.

-----------------------------------------------------------------

DOUGLAS C. DISHMAN; TIM E. DISHMAN,

Plaintiffs - Appellants,

versus

ENTERGY CORPORATION; ENTERGY GULF STATES INC.; ENTERGY ARKANSAS
INC.; ENTERGY LOUISIANA INC; ENTERGY MISSISSIPPI INC.; ENTERGY
SERVICES INC.; ENTERGY TECHNOLOGY HOLDING COMPANY; ENTERGY
TECHNOLOGY COMPANY,

Defendants - Appellees.

2
_________________________________________________________________

Appeals from the United States District Court
for the Eastern District of Texas
USDC Nos. 1:98-CV-2006-RAS and 1:98-CV-2054-RAS
_________________________________________________________________

Before JOLLY, WIENER and DENNIS, Circuit Judges.

PER CURIAM:*

The appellants in this case, a group of landowners in

Louisiana, Mississippi and Texas (“the landowners”), brought suit

against Entergy Corporation and its subsidiaries (collectively,

“Entergy”), alleging that the company engaged in unauthorized

transmission of voice, data and video communications across their

land. Specifically, the landowners contend that Entergy contracted

with various third parties to carry general telecommunications via

fiber optic cables installed in its existing network, thereby

violating easements and rights-of-way obtained in order to transmit

electricity and internal communications.

The landowners moved to certify the case as a class action

under FED. R. CIV. P. 23. The district court virtually lived with

the case for several years and the proceedings before the court

were extensive. After discovery, briefing, and a certification

hearing, the district court, in a thorough and well-considered

opinion, denied the motion. We granted the landowners’ Rule 23(f)

*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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petition for leave to appeal. Finding no reversible error, we

AFFIRM.

I

The question before us is whether the district court, which

appears to have been extremely familiar with all facets of the

case, erred in denying class certification. The certification

inquiry is essentially a factual one, which we review only for

abuse of discretion. See Allison v. Citgo Petroleum Corp., 151

F.3d 402, 408 (5th Cir. 1998). Whether the district court applied

the correct legal standard in reaching its decision, however, is a

question that we review de novo. See id. (citing Forbush v. J.C.

Penney Co., 994 F.2d 1101, 1104 (5th Cir. 1993)). Although the

landowners insist that a number of their arguments raise legal

questions, the bulk of the district court’s analysis is fact-bound.

As such, our review is for abuse of discretion.

The landowners contend that class certification is appropriate

under all three provisions of Rule 23(b). In the alternative, they

argue that the district court should have certified a “composite

class” –- that is, it should have certified “the class under Rule

23(b)(2) on liability”, while “provid[ing] class members with Rule

23(b)(3) notice and the right to opt out on damages issues”. We

consider these contentions in turn.

First, it is clear that the district court did not err in

declining to certify a class under Rule 23(b)(1)(A). A class may

be certified under Rule 23(b)(1)(A) if the prosecution of separate

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actions by or against individual members of the class would

establish incompatible standards of conduct for the party opposing

the class. In this case, the party opposing the class –- Entergy

–- does not seek to avail itself of the safeguards of Rule

23(b)(1)(A).

Moreover, the landowners have failed to put forward any

scenario under which this litigation might establish incompatible

standards of conduct. At worst, Entergy might be found liable to

some landowners and not liable to others, forcing it to negotiate

with victorious plaintiffs for the right to continue transmitting

telecommunications over their property, or to reroute its

transmissions. Were this to happen, Entergy’s obligations to

various landowners would vary, but they would not be inconsistent.

That is, it would not be the case that Entergy could not satisfy

one judgment without contradicting the terms of another. As such,

the district court did not abuse its discretion in denying

certification under Rule 23(b)(1)(A).

Next, we turn to the district court’s denial of class

certification under Rule 23(b)(2). Rule 23(b)(2) permits

certification where “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”. Although

the focus of a Rule 23(b)(2) class action is injunctive relief,

plaintiffs may also seek monetary damages, provided they are

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“incidental” to the requested injunction. See Allison, 151 F.3d at

412. That is, the damages must be “capable of computation by means

of objective standards and not dependent in any significant way on

the intangible, subjective differences of each class member's

circumstances.” In re Monumental Life Ins. Co., 365 F.3d 408, 416

(5th Cir. 2004) (quoting Allison, 151 F.3d at 415).

In the instant case, the district court held that calculation

of damages would require examination of the peculiar circumstances

of individual landowners. The reason is intuitive: rights-of-way

over some parcels of land would fetch a higher price from telecom

companies seeking to buy access in a free market than would others.

One parcel, for instance, might be situated in a geographic “choke

point”, such that a telecom company would be forced go many miles

out of its way if that parcel proved unavailable. The owner would

therefore be able to extract a payment much higher than the per-

foot average of the entire network. Thus, his damages in a suit

for trespass would be commensurately higher. In short, the value

of the myriad easements would randomly vary in such a way as to

defy any coherent system of determining damages.

The landowners contend that, empirically, this is not the case

in Louisiana, Mississippi and Texas –- that is, that these

strategic points in the network are rare, if they exist at all.

However, they provide no evidentiary support for this claim. Thus,

we cannot say that the district court abused its discretion in

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concluding that individualized damage calculations would defeat

certification under Rule 23(b)(2).

The landowners’ argument for certification under Rule 23(b)(3)

fails for similar reasons. Rule 23(b)(3) requires that questions

common to the class predominate over individualized questions, and

that class treatment provide a superior means of adjudicating the

controversy. In its opinion, the district court cited various

factors –- including the proximate cause requirement of RICO and

the varying lengths of state statutes of limitations -- supporting

its finding that individual questions predominate over common ones.

Here again, however, the most important factor is the

necessity of individualized damage calculations. Although

“relatively few motions to certify a class fail because of

disparities in the damages suffered by the class members”, Bell

Atlantic Corp. v. AT&T Corp., 339 F.3d 294, 306 (5th Cir. 2003), we

have nonetheless noted that the lack of a suitable formula for

calculation of damages may defeat predominance. That is to say,

where the issue of damages “does not lend itself to ... mechanical

calculation, but requires separate mini-trial[s] of an

overwhelmingly large number of individual claims,” class

certification will not be appropriate. Id. (quoting Windham v.

American Brands, Inc., 565 F.2d 59, 68 (4th Cir. 1977)). Here, the

failure of predominance might be stated in a different way, that

is, the injury to the landowners varies in substantial ways,

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depending on the value, character and location of the property over

which the easement prevails.

As explained supra, the district court concluded that

geographic variations would render some parcels more valuable than

others, thus precluding any mechanical calculation of damages in

this case. The landowners dispute this conclusion, contending that

damages may be calculated based on a per-foot extrapolation of the

per-mile rate that Entergy charges telecom companies. This

argument ignores the fact that Entergy’s flat per-mile rate,

although a near-perfect proxy for the overall value of network

access, is a poor proxy for the price of gaining access to any

given parcel of land. The flat rate is, by definition, an average

of the values of many different parcels. As such, it would

necessarily yield a windfall to some landowners at the expense of

others. Thus, the district court did not abuse its discretion in

rejecting Entergy’s flat rate as a model for damages, or in denying

class certification under Rule 23(b)(3).

Finally, the landowners contend that the district court abused

its discretion in refusing to certify this case as a “composite

class”. That is to say, the district court should have certified

the liability issues for class treatment under Rule 23(b)(2), while

providing class members with notice and opt out rights under Rule

23(b)(3), thus allowing separate trials on damages issues.

Although FED. R. CIV. P. 23(c)(4) does permit a district court

to certify “a class action with respect to particular issues”, we

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have previously held that, in order to maintain a “composite class”

of the sort the landowners describe, plaintiffs must first show

that the cause of action, taken as whole, satisfies the

predominance requirement of Rule 23(b)(3). See, e.g., Castano v.

American Tobacco Co., 84 F.3d 734, 745 n.21 (5th Cir. 1996). To

hold otherwise would permit plaintiffs to evade the predominance

requirement “through the nimble use of subdivision (c)(4)”. Id.

In the instant case, the landowners seek to excise from the

class the very issue that defeats predominance under Rule 23(b)(3)

–- i.e., the assessment of injury and the calculation of damages.

Thus, the district court did not abuse its discretion in declining

to certify this case as a “composite class”.

II

For the foregoing reasons, the decision of the district court

is, in all respects,

AFFIRMED.

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