Carwell Elevator Co., Inc. v. Leathers

Annabelle Clinton Imber, Jusand ng While I

concurring in part and dissenting part. While I concur in majority that this case must be reversed and remanded, I must respectfully disagree with the majority’s contention that res judicata is not a bar under the facts in this case. Quite the contrary, res judicata does apply to the appellants in this case, but res judicata itself does not negate the remedy they seek.

In our recent decision in State Office of Child Support Enforcement v. Willis, 347 Ark. 6, 59 S.W.3d 438 (2001), we set out the factors of res judicata:

Res judicata bars relitigation of a subsequent suit when: (1) the first suit resulted in a final judgment on the merits; (2) the first suit was based on proper jurisdiction; (3) the first suit was fully contested in good faith; (4) both suits involve the same claim or cause of action; and (5) both suits involve the same parties or their privies .... The policy of the doctrine is to prevent parties relitigating issues on which they have already been given a fair trial.

Id. at 13, 59 S.W.3d at 443.

In this case, the original suit brought by Gulf Rice was an illegal-exaction suit; therefore, it was a class action as a matter of law. Worth v. City of Rogers, 351 Ark. 183, 89 S.W.3d 875 (2002). Though the appellees in this case attempt to carve the appellants out of the order of the trial court in the original suit, Gulf Rice was merely the named party who represented all other affected parties in the class action, including the appellants. Id.; see also Laman v. Moore, 193 Ark. 446, 100 S.W.2d 971 (1937) (in a class action, no plaintiff may recover a personal judgment against a defendant except for the benefit of all similarly situated taxpayers).

As to res judicata, the five elements are met; therefore, res judicata does apply. First, the original suit, Leathers v. Gulf Rice Arkansas, Inc., 338 Ark. 425, 994 S.W.2d 481 (1999), resulted in a final judgment on the merits, in that the trial court’s decree found that Act 344 was “unconstitutional as to all first buyers of Arkansas Rice” (emphasis added). The decree enjoined the collection of all assessments, not just those of Gulf Rice, the named plaintiff. Second, the Gulf Rice suit was based on proper jurisdiction. Third, the first suit was fully contested in good faith, as evidenced by the decree, which found the assessments unconstitutional and ordered an injunction and a refund. Fourth, both the original suit and this suit involve the same claim or cause of action — that Act 344 was unconstitutional. Finally, both suits involve the same parties because all first buyers of rice were parties in the original suit, by virtue of its status as an illegal-exaction class-action suit. Therefore, res judicata applies to the appellants in this case as to the outcome of the litigation.

However, that is not to say that the appellants are without a remedy. On the contrary, because the remedy granted in the original suit was an injunction and a refund to the named plaintiff, that remedy applies to all the plaintiff parties in the original case, including the appellants in this subsequent suit, and all other rice buyers who were affected by the illegal assessment. Thus, res judicata applies to all affected rice buyers as to both points: the result of the litigation and the remedy, and all affected rice buyers are entitled to a refund of any payments they made under the unconstitutional assessment.1

The decision of the trial court should be reversed, and the case remanded for notification to all affected rice buyers so that they can make a claim for their refunds, if they so choose. I would remand this case for this notification, and for the trial court to set up a system by which claims may be made in a timely fashion.

Glaze and Thornton, JJ., join.

The majority directs the trial court to “require proper notice and proceed with an illegal-exaction class suit.” This direction is erroneous in that it violates the doctrine of res judicata and would relitigate that which has already been litigated to final judgment. As the majority notes, an illegal-exaction suit is a class action as a matter of law. Worth v. City of Rogers, 351 Ark. 183, 89 S.W.3d 875 (2002). To require notice now, after the completion of the suit, would undercut this principle, and would have long-reaching effects in other illegal-exaction suits. Following the majority’s “notice” requirement to its logical conclusion would mean that all illegal-exaction suits could be re-litigated again and again, if a taxpayer received no notice of the suit. This flies in the face of the history of illegal-exaction suits in Arkansas, and has the potential of opening the floodgates of litigation every time a taxpayer is not happy with the results of an illegal-exaction lawsuit. In this case, no “notice” as set forth in Worth, supra, is required to be given to the affected rice buyers, because that notice is pre-litigation notice that is given in order that affected taxpayers in an illegal-exaction suit may intervene if they wish, in order to have greater input into the remedy sought. In this case, the greatest possible remedy, both an injunction and a refund, was granted by the trial court, so there is no need to notice the class for this purpose. The only notification necessary is that which would instruct the affected class members on how to claim their refunds.