Jimmy Glen Riemer v. the State of Texas and Jerry Patterson, as Commissioner of the General Land Office of the State of Texas

IN THE SUPREME COURT OF TEXAS
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NO . 11-0548
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JIMMY GLEN RIEMER, ET AL.,
PETITIONERS,

v.

THE STATE OF TEXAS AND JERRY PATTERSON, AS COMMISSIONER OF THE
GENERAL LAND OFFICE OF THE STATE OF TEXAS,
RESPONDENTS

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ON PETITION FOR REVIEW FROM THE
COURT OF APPEALS FOR THE SEVENTH DISTRICT OF TEXAS
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Argued November 6, 2012

JUSTICE GREEN delivered the opinion of the Court.

CHIEF JUSTICE JEFFERSON did not participate in the decision.

Prior to proceeding as a class action, Rule 42 of the Texas Rules of Civil Procedure requires

certain prerequisites to be met. In this case, a small group of landowners sought to certify a class

composed of all owners of any real property interests in a twelve-mile stretch of land located

adjacent to the Canadian River in the Panhandle to litigate alleged takings claims against the State

of Texas. The trial court denied certification, finding that the landowners failed to satisfy two of

Rule 42(a)’s prerequisites and any one of the three Rule 42(b) requirements. The court of appeals
affirmed, holding that certain conflicts identified by the trial court prevented the landowners from

satisfying Rule 42(a)(4)’s adequacy-of-representation prerequisite. We conclude that neither of the

conflicts identified by the trial court prevented the landowners from satisfying Rule 42(a)(4);

therefore, the trial court abused its discretion when it found otherwise. Accordingly, we reverse the

court of appeals’ judgment and remand the case back to that court for further proceedings consistent

with this opinion.

I. Background

This is the second case to reach this Court involving an ongoing dispute between landowners

and the State concerning the boundaries of the Canadian River in Hutchinson County. See generally

Brainard v. State, 12 S.W.3d 6, 11–12 (Tex. 1999) (discussing the history and impetus surrounding

the dispute, namely the completion of the Sanford Dam in 1965 and resulting surveys). The origins

of this particular suit trace back to 1993 when the State sued Hugo A. Riemer, Jr. for an alleged

trespass to land. On Riemer’s motion, the trial court abated the case until this Court’s consideration

of Brainard. See Brainard, 12 S.W.3d at 10 (holding that changes brought about or influenced by

an artificial structure that was not created by the riparian owner must be considered in marking the

gradient boundary of a river). Because the State owns the riverbeds and the minerals underneath the

riverbeds in Texas, the boundary of the riverbed is critical in determining the rights of the State,

riparian mineral interest owners, and riparian surface owners. See TEX . PARKS & WILD . CODE

§ 1.011(c); see also TEX . NAT . RES. CODE §§ 11.041(a)(1), 51.011 (providing that the Permanent

School Fund includes the mineral estate in riverbeds).

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 After this Court’s decision in Brainard, Glen Riemer, individually and as independent

executor of his father’s estate, filed a counterclaim against the State for trespass and conversion. The

State nonsuited its claims against Riemer. Riemer, joined by Richard Coon, Jr., the June Meetze

Coon Trust, and the Johnson Borger Ranch Partnership (collectively “class representatives”), filed

this putative class action against the State of Texas and its oil and gas lessee, J.M. Huber

Corporation. The class representatives alleged, inter alia, an unconstitutional taking of their property

arising from the State’s approval of a 1981 survey that established the boundaries of a portion of the

Canadian River at issue in this case.1 Pursuant to Rule 42, the class representatives moved to certify

a class composed of all owners of any real property interests in a twelve-mile stretch of land adjacent

to the Canadian River in Hutchinson County. Prior to the certification hearing, the State, Huber, and

various non-party mineral interest owners settled their disputes by entering into the “Canadian River

Mineral Boundary Agreement” (MBA), which used the 1981 survey to establish the boundary lines

amongst the parties to the settlement. The named plaintiffs in this case also settled with Huber.

The trial court ultimately denied class certification, finding that certain named plaintiffs

lacked standing to bring the alleged takings claims. The trial court also found that the proposed class

action failed to satisfy the typicality and adequacy-of-representation prerequisites of Rule 42(a), and

any one of the requirements outlined in Rule 42(b). The class representatives filed an interlocutory

appeal challenging the trial court’s order denying class certification. The court of appeals rejected

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The State filed a plea to the jurisdiction on sovereign immunity grounds, which the trial court denied. The
court of appeals reversed, dismissing all claims against the State except the class action takings claim and Riemer’s
individual claim for trespass to try title. State v. Riemer, 94 S.W .3d 103, 112–13 (Tex. App.— Amarillo 2002). Neither
party sought review of that decision in this Court. Thus, the only live class action claim at this time is the takings claim.

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the trial court’s findings on standing but affirmed its order denying class certification, holding that

the trial court did not abuse its discretion in finding that the class representatives would not fairly

and adequately protect the interests of the class. 342 S.W.3d 809, 813. Central to the court of

appeals’ holding that the trial court did not abuse its discretion in refusing to certify the proposed

class was that conflicts of interest existed among the class representatives and the other proposed

class members. Id. at 815–16. Due to these conflicts, the court of appeals held that the class

representatives failed to satisfy the adequacy-of-representation requirement. Id. at 818. In particular,

the court of appeals focused on the following two conflicts initially identified by the trial court: “(1)

the claims of the [class] representatives conflict with the claims of other proposed class members

who ha[d] signed [the MBA,] . . . and (2) the claims of the [class] representatives conflict with

claims of other proposed class members who own land on opposite sides of the Canadian River.”

Id. at 815.

The class representatives petitioned this Court for review, complaining that the court of

appeals erred in affirming the trial court’s order denying class certification. We granted the class

representatives’ petition. This Court has jurisdiction to review an interlocutory order refusing to

certify a class in a suit brought under Rule 42. TEX . GOV ’T CODE § 22.225(d); TEX . CIV . PRAC. &

REM . CODE § 51.014(a)(3). We review a class certification order for abuse of discretion, which

occurs when the trial court acts arbitrarily, unreasonably, or without reference to any guiding

principles. Bowden v. Phillips Petroleum Co., 247 S.W.3d 690, 696 (Tex. 2008).

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 II. Class Action Certification Under Rule 42

A class action is an extraordinary procedural device designed to promote judicial economy

by allowing claims that lend themselves to collective treatment to be tried together in a single

proceeding. See generally Ford Motor Co. v. Sheldon, 22 S.W.3d 444, 452–53 (Tex. 2000)

(discussing the origination and purpose of the class action device). Because Rule 42 is patterned

after Federal Rule of Civil Procedure 23, federal decisions and authorities interpreting current federal

class action requirements are instructive. Sw. Ref. Co. v. Bernal, 22 S.W.3d 425, 433 (Tex. 2000).

There is no right to litigate a claim as a class action under Rule 42. Id.

Rule 42 establishes four initial prerequisites to class certification: numerosity, commonality,

typicality, and adequacy of representation. See TEX . R. CIV . P. 42(a). In addition to Rule 42(a)’s

prerequisites, a proposed class action must satisfy at least one of the three subdivisions of Rule

42(b). TEX . R. CIV . P. 42(b). A trial court must apply a rigorous analysis to determine whether Rule

42’s certification requirements have been satisfied. Bowden, 247 S.W.3d at 696. The class

representatives argue that the court of appeals erred in holding that the conflicts identified by the trial

court prevent the class representatives from establishing Rule 42(a)(4)’s adequacy-of-representation

prerequisite. We agree.

Rule 42(a)(4)’s adequacy-of-representation prerequisite requires the proponent of class

certification to establish that the class representative will fairly and adequately protect the interests

of the class. TEX . R. CIV . P. 42(a)(4); Bowden, 247 S.W.3d at 707 (“The class representative has the

burden of proving adequacy.”). “[A] class representative whose interests conflict with the interests

of other class members may not adequately represent a class.” State Farm Mut. Auto. Ins. Co. v.

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Lopez, 156 S.W.3d 550, 556 (Tex. 2004). The existence of minor conflicts standing alone, however,

will not prevent a class representative from adequately representing a class. See Valley Drug Co.

v. Geneva Pharms., Inc., 350 F.3d 1181, 1189 (11th Cir. 2003). For a conflict of interest to prevent

class certification under Rule 42(a)(4), the conflict must be fundamental and go to the heart of the

litigation. See Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 430–31 (4th Cir. 2003); see also

In re K-Dur Antitrust Litig., 686 F.3d 197, 223 (3d Cir. 2012) (“Only a fundamental conflict will

defeat adequacy of representation.”). A conflict that is merely speculative or hypothetical will not

defeat the adequacy-of-representation requirement. See Gunnells, 348 F.3d at 430. We address each

of the conflicts identified by the trial court in turn.

A. Conflict Regarding the MBA

Prior to the hearing on the class representatives’ motion to certify, the settling parties to the

MBA agreed upon a location for the banks of the Canadian River so that the boundary between the

settling landowners and the State could be established. The settling landowners were necessarily

included within the definition of the class that the class representatives initially sought to be

certified. The court of appeals held that the testimony of one landowner who opposed his inclusion

in the class coupled with the class representatives’ questioning of the validity of the MBA lent

sufficient support to a potential conflict that would prevent class certification. 342 S.W.3d at

817–18. The class representatives argue that the MBA fails to create a real conflict between the class

representatives and the settling landowners because the conflict does not go to the heart of the

litigation. The State responds that antagonism between the settling landowners and class

representatives is sufficiently established by the settling landowner’s testimony and the class

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representatives’ counsel’s statements at the certification hearing regarding their intent to challenge

the MBA.

We disagree with the State and the court of appeals’ holding that a potential conflict among

the settling landowners and the class representatives regarding the MBA is sufficient to deny class

certification in this case. First, Rule 42 does not require that all members agree on the propriety of

the action in order to certify the class. Cf. 5 JEROLD S. SOLOVY ET AL., MOORE ’S FEDERAL PRACTICE

§ 23.25[2][b][iii] (3d ed. 2012) (providing that disagreements regarding the appropriateness of the

litigation generally will not defeat certification under Rule 23(a)(4) of the Federal Rules of Civil

Procedure). The landowners’ motion for class certification alleges that certification is proper under

Rule 42(b)(2) and 42(b)(3). If the settling landowners wished to honor the MBA and thus dispute

the appropriateness of this lawsuit, then they may utilize Rule 42’s procedures for opting out of the

class. See TEX . R. CIV . P. 42(c)(2)(B)(v) (allowing plaintiffs in a certified class under Rule 42(b)(3)

to be excluded from the class); Compaq Computer Corp. v. Lapray, 135 S.W.3d 657, 667–68 (Tex.

2004) (providing that trial courts must consider opt-out rights for class members under any theory,

including Rule 42(b)(2)). Second, the class representatives clarify their position in this Court that

it is not their intention to invalidate the MBA. Again, we see no reason why the settling landowners

could not continue to honor the MBA, to the extent it is valid, regardless of the relief, if any, that

may be ultimately awarded in this case. Finally, the State argues that Swain v. Brinegar, 517 F.2d

766, 769, 779–80 (7th Cir. 1975), supports its argument that a conflict fatal to class certification

exists when other potential class members have already settled with the defendant. We find

Brinegar distinguishable and thus unpersuasive.

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 In Brinegar, a group of landowners sought to certify a class composed of owners and tenants

of farmland who were subject to having their land condemned for the purposes of the construction

of a highway. Brinegar, 517 F.2d at 779–80. The class definition specifically included “those who

have already conveyed or agreed to convey their property under threat of condemnation.” Id. at 780.

The court in Brinegar held that the named plaintiffs could not meet Federal Rule of Civil Procedure

23(a)(4)’s adequacy-of-representation requirement because those who had “‘already conveyed or

agreed to convey their property’ will have an interest in the integrity of their bargain,” and will also

oppose any change in the proposed highway’s route. Id. In other words, the named plaintiffs in

Brinegar were directly challenging the location of the proposed highway, and as noted by the trial

court, if the class action succeeded, then the state would likely choose a different route thus negating

the state’s need for the land already conveyed or land that landowners had agreed to convey. See

Swain v. Brinegar, 378 F. Supp. 753, 756 (S.D. Ill. 1974). In this case, however, any relief granted

would not prevent the settling landowners from continuing to honor the MBA, and the class

representatives do not intend to attack that settlement like the named plaintiffs intended to attack the

conveyances in Brinegar. While the conflict identified in Brinegar went directly to the heart of the

class action litigation, the conflict regarding the MBA in this case does not. Therefore, the potential

conflict among the settling landowners and the class representatives does not prevent the class

representatives from serving as adequate representatives of the proposed class. The court of appeals

erred in holding otherwise.

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 B. North-South Conflict

The trial court found—and the court of appeals held without analysis—that the class

representatives failed to satisfy Rule 42(a)(4)’s adequacy-of-representation requirement due to the

potential conflict between landowners on the north and south of the Canadian River in locating the

boundaries of the riverbed. The class representatives argue that no evidence supports antagonism

between proposed class members on opposite sides of the river, and even if there was a conflict, the

class representatives direct the Court to authority that holds that a conflict must be more than

speculative or hypothetical. See Emp’rs Cas. Co. v. Tex. Ass’n of School Bds. Workers’ Comp.

Self-Ins. Fund, 886 S.W.2d 470, 476 (Tex. App.—Austin 1994, writ dism’d w.o.j.). The State

responds that locating the riverbed creates a “risk” that landowners on the north side will attempt to

locate their lands as far south as possible while landowners on the south side want the exact opposite.

While we do not disagree with the State that there is a risk for a conflict between the

proposed class members on opposite sides of the river, we hold that this risk is too speculative and

theoretical to prevent class certification under Rule 42(a)(4). See Gunnells, 348 F.3d at 431. Our

holding is supported by the fact that the purported conflict rests on the questionable proposition that

locating the northern boundary of the riverbed is dependent on locating the southern boundary. It

is entirely probable—and we are presented with no evidence to the contrary—that locating the

northern boundary of the Canadian River will have no effect on where its southern boundary is

located. Therefore, the court of appeals erred in holding that the purported conflict between class

members on opposite sides of the river prevented the class representatives from establishing

adequacy under Rule 42(a)(4).

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 C. Family Dispute Conflict

The trial court also found that Montford Johnson III, who is the assistant managing partner

of class representative Johnson Borger Ranch Partnership, was not an adequate representative for

his relatives that were are also members of the proposed class. The court of appeals did not address

this conflict. The State argues that this conflict also prevents the class representatives from

establishing adequacy under Rule 42(a)(4) because Johnson’s relatives have sued him in the past and

have no reason to trust him. In addition, the State argues that all of Mr. Johnson’s relatives that

would be members of the proposed class signed the MBA. For similar reasons articulated in section

II.A of this opinion, supra, we disagree that this potential conflict prevents certification of the

proposed class in this case. Again, to the extent Mr. Johnson’s relatives disagree with the propriety

of the litigation, the class representative, or the class representative’s counsel, they may utilize Rule

42’s procedures for opting out of the class. See TEX . R. CIV . P. 42(c)(2)(B)(v).

III. Conclusion

For these reasons, we conclude that the trial court abused its discretion by relying on the

conflicts identified in its order denying class certification to establish that the class representatives’

failed to satisfy Rule 42(a)(4)’s adequacy-of-representation prerequisite. And, the court of appeals

erred when it affirmed the trial court’s order on the same grounds. Accordingly, we reverse the court

of appeals’ judgment affirming the trial court’s order denying class certification and remand the case

back to the court of appeals to address the remaining contested requirements of class certification

under Rule 42.

___________________________

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 Paul W. Green
Justice

OPINION DELIVERED: February 22, 2013

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