Court of Appeals of Texas, Beaumont.

Robert C. GRONWALDT, et al, Appellants,

v.

Jerry C. McCLELLAND, et al, Appellees.

Nos. 09-99-125-CV, 09-99-591-CV.

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Submitted May 18, 2000.

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Delivered June 22, 2000.

Before WALKER, C.J., BURGESS and STOVER, JJ.

OPINION

PER CURIAM.

*1 This is a second interlocutory appeal of a class action certification. See Tex.Civ.Prac. & Rem.Code Ann. § 51.014(a)(3)(Vernon Supp.2000). The plaintiff-appellee, Jerry C. McClelland (“appellee”), originally filed this action against defendants-appellant, Mobil Oil Corp., Robert C. Gronwaldt, Individually and as Agent of Mobil Oil, and National Union Fire Insurance Company of Pittsburgh, Pennsylvania (“appellants”). In his amended motion for class certification, appelle petitioned to represent a class of persons consisting generally of all Mobil employees in the past ten years who have been injured in the course and scope of their employment and have had their claims adjusted by Mobil employees. On June 20, 1994, the trial court¹ entered its order designating and declaring a class certification. The trial court found McClelland had met the requirements of Tex.R.Civ .P. 42(a) and (b)(1)(a) and/or (b)(4). This court affirmed that certification order by per curiam opinion in Gronwaldt v. McClelland, No. 09-94-238-CV (Tex.App.-Beaumont, Dec. 29, 1994, writ dism’d w.o.j.)(not designated for publication), 1994 WL 720018.²

On February 19, 1999, the trial court³ redefined the class as: “all persons suffering bodily injuries, including all persons claiming by, through or under them as a result of death or disability, who were injured in the course and scope of their employment with any Mobil entity in Texas and who filed worker compensation claims during the time periods that Defendants Forum Insurance and National Union Fire Insurance serves as alleged ‘front’ companies and alleged workers’ compensation insurers, such time period believed to be from January 1, 1965 to December 31, 1991, inclusive….” The order further decreed Veronica Wellons to be an additional representative.

On November 18, 1999, the trial court redefined and expanded the class to include

a mandatory ‘Siamese Twin’ class-a class joined at the hip with the previously certified class, for the sole and only purpose of determining the question articulated in I. above⁴-to include the following persons: ‘All persons who claim to have suffered bodily injuries or illness [including all persons claiming by, through or under them as a result of death or disability, their heirs and/or administrators of their estates and all wrongful death beneficiaries], in the course and scope of their employment with any Mobil entity in Texas during the time period that Defendants Forum Insurance, National Union Fire Insurance, American Home Assurance Company, and The Insurance Company of the State of Pennsylvania purported to be workers’ compensation insurers for Mobil entities from January 1, 1965 to December 31, 1993, inclusive, and who did not file workers’ compensation claims for their injuries or illness.’

The trial court amended and superceded the November 18, 1999 order on December 7, 1999. This new order included the language quoted above from the November 18, 1999 order and further ordered “that the class previously certified be expanded temporally to include:

*2 All persons who claim to have suffered bodily injuries or illness [including all persons claiming by, through or under them as a result of death or disability, their heirs and/or administrator of their estates and all wrongful death beneficiaries], in the course and scope of their employment with any Mobil entity in Texas during the time period that Defendants Forum Insurance, National Union Fire Insurance, American Home Assurance Company, and The Insurance Company of the State of Pennsylvania purported to be workers’ compensation insurers for Mobil entities from January 1, 1965 to December 31, 1993, inclusive, and who did file workers’ compensation claims for their injuries or illness.’

The court additionally ordered that “[b]oth the original class, and any and all expansions thereof, including the ‘Siamese Twin’ class certified herewith, are mandatory, and shall be considered as such at least until the common question articulated in I. above is resolved.”

Appellees initially argue this court has no jurisdiction to review the February 19, 1999 and December 7, 1999 orders because they only modify the previous order; thus a second accelerated appeal is improper. However, in De Los Santos v. Occidental Chemical Corp., 933 S.W.2d 493, 494 (Tex.1996), our supreme court held an order changing a class action from opt-out to mandatory, despite the objections of plaintiffs that had already opted out of the class, was an appealable interlocutory order. The court found the order did not simply enlarge membership of the class by adding plaintiffs that had previously opted out, but altered the fundamental nature of the class. Id. at 495. As in De Los Santos, the orders involved here changed the class from opt-out to mandatory. Accordingly, we have jurisdiction to review those orders.

Concerning that portion of both orders dealing with the class certified by the June 20, 1994 order, we have previously considered that order and the “law of the case” doctrine⁵ applies to that portion of the December 7, 1999 order. However, there are other portions of the December 7, 1999 order we must consider.

Appellants raise numerous issues complaining of the trial court’s order of class certification. Before addressing those complaints, we find it necessary to note recent supreme court decisions regarding class certification.

In Intratex Gas Co. v. Beeson, 43 Tex.Sup.Ct.J. 489, 493-94, 2000 WL 266700 (March 9, 2000),⁶ the court reversed a class certification because the class was not precisely defined, but refused to redefine the class and remanded the case to the trial court.

The class had been defined by the trial court as: “All persons who were producers of natural gas sold to the defendant between January 1, 1978 and December 31, 1988 whose natural gas was taken by the defendant in quantities less than their ratable proportions.” 43 Tex.Sup.Ct.J. at 490. The court held

[f]or a class to be sufficiently defined, it must be precise: the class members must be presently ascertainable by reference to objective criteria…. For a class definition to be objective and its members presently ascertainable, the definition cannot require a determination of the merits. Deciding the merits of the suit in order to determine the scope of the class or its maintainability as a class action is not appropriate.

*3 Id. at 492 (citations omitted). The court found the class definition rested upon the paramount liability question, i.e., whether Intratex took gas from the plaintiffs in less than ratable shares. Thus, the definition was not objective and the class members could not be presently ascertained. See id. at 493.

Justice Hankinson explained the court’s reasoning for remanding the case, rather then redefining the class:

Remanding for the trial court to consider redefinition is consistent with the trial court’s discretion with regard to class certification and its responsibility to manage a class action. First, the class definition is “a matter within the broad discretion of the district court.” The trial court is also accorded discretion in determining whether to grant or deny a class certification.

….

Second, under rule 42(c)(1), the trial court may alter, amend, or withdraw class certification at any time before final judgment. For example, the contours of the case may change after discovery is completed and as the parties prepare for trial, necessitating modification of the class definition. Rule 42(c)(1) invests the trial court with the responsibility of managing the class action, and provides it with the tools to respond to changes in the case’s development. Prescribing the class definition for the trial court, therefore, interferes with the trial court’s discretion to monitor the class.

Id. at 494-95 (footnote omitted) (citations omitted).

Subsequently, in Ford Motor Co. v. Sheldon, 43 Tex.Sup.Ct.J., 719, 2000 WL 566766 (May 11, 2000)⁷, the court found both the trial court’s definition and the court of appeals’ modified definition of a class to be defective. The court reversed the court of appeals’ judgment affirming the class certification and remanded the cause to the trial court with orders to decertify the class, expressing no opinion as to whether the trial court could certify a class meeting the requirements of Rule 42 if a different definition were proposed. Sheldon, 43 Tex.Sup.Ct.J. at 726.

Under Tex.R.Civ.P. 42(b)(4), the trial court had certified the class, determining the following questions were common to the class: “(1) whether there was a defective paint process by reason of lack of primer, (2) whether Ford had knowledge of the defect, (3) whether Ford withheld information of the defect when it had a duty to disclose, and (4) how the discovery rule applied to delay the running of limitations.” Id. at 720. The trial court contemplated a two-phase trial: the first would determine the common liability questions; if Ford were found liable, phase two would then proceed to determine individualized damages. Id.

The court of appeals approved of the trial plan, but determined the class definitions violated Rule 42 by allowing the named plaintiffs to proceed before showing a class existed. Id. at 721. The trial court defined the class as all persons who purchased one of the listed new Ford vehicles in Texas “which was painted with high build electrocoat or medium build electrocoat and no spray primer and who suffered past and/or future damage as a result of peeling or flaking paint on these vehicles caused by a defective paint process (i.e., high build electrocoat or medium build electrocoat and no spray primer) excluding persons who purchased vehicles pursuant to a fleet account or fleet identification number.” The class was divided into two subclasses, the first being those persons who purchased certain Ford vehicles on or after March 8, 1988, and the second being persons who purchased other Ford vehicles prior to March 8, 1988. Id at 720.

*4 The court of appeals modified the definitions by inserting the phrase “who allege the peeling or flaking was” before the clause “caused by a defective paint process” in both subclasses. Id. at 721. Thus, “[a]s modified, the class include[d] those purchasers of certain specified Ford vehicles who suffered past or future diminution in value damages or out of pocket expenses from peeling paint, and who allege that the cause of the peeling is the lack of spray primer in the paint process.” Id. at 721.

Chief Justice Phillips agreed with the court of appeals that the class defined by the trial court failed to meet the clearly-ascertainable requirement set forth in Intratex. Id. at 725. He found that “[i]ncluding the defect theory as an element of the class definition impermissibly requires a determination of the merits before the court can ensure the existence of a class.” Id . at 725. Chief Justice Phillips went on to hold that the class as modified by the court of appeals’ definition also failed. Id. at 726. He determined “there are no realistic means for the trial court to determine which class members ‘allege that the peeling or flaking was caused by a defective paint process.’ The trial court would have to inquire individually into each proposed class member’s state of mind to ascertain class membership under the court of appeals’ class definition.” Id. at 725. Accordingly, the cause was reversed and remanded with instructions to decertify the class. Id at 726.

Lastly, in Southwest Rfg. Co. Inc. v. Bernal, 43 Sup.Ct.J. 706, 2000 WL 566745 (May 11, 2000),⁸ the court stated the principal issue was the propriety of certifying a class action of 904 plaintiffs against Southwest Refining Company for alleged personal injuries arising from a refinery tank fire in Corpus Christi, Texas. Justice Gonzales found the common issues did not predominate over the individual issues, reversed the court of appeals, and remanded the case to the trial court.

The trial court’s certification order provided for three phases. Phase I would address liability on the issues of negligence, strict liability, toxic trespass, nuisance and gross negligence, and establish whether the defendants were liable for the explosion and whether the released materials were capable of causing the harm alleged by the class. If gross negligence was found, Phase II would determine punitive damages. Phase III would then determine whether the individual class members could show sufficient specific injuries or damages that were proximately caused by the release from the tank explosion. The amount of punitive damages awarded in Phase II, if any, would then be proportionately reduced by the number of individuals, if any, who were unable to satisfy the requisites of actual damages and proximate cause in Phase III. Id. at 706-07. The order did not indicate whether or not a single jury would decided all three phases, including the 904 individual damage claims. Id.

*5 The court of appeals held the class action prerequisites were satisfied. It acknowledged individual issues might predominate in determining causation and damages, but reasoned the class was maintainable because the modified trial plan called for the individual issues to be litigated separately from the common issues. Id. at 707. The court of appeals indicated those issues would not necessarily overwhelm the jury because it remained to be seen whether causation and damages might be proven expeditiously by the use of models, formulas, and damage brochures. Id. The court of appeals suggested that, in any event, separate juries could be summoned to resolve the individual issues. Id.

However, the court of appeals modified the trial plan to require proof of actual damages by the nineteen class representatives before the jury might resolve punitive damages for the entire class. Under the modified trial plan, Phase I remained the same, Phase II would determine proximate cause and actual damages for the nineteen class representatives, Phase III would determine punitive damages for the entire class, and Phase IV would determine proximate cause and actual damages for the remaining 885 class members. Id.

Justice Gonzales rejected the approach of certify now and worry later and concluded a cautious approach to class certification is essential. Id. at 711-12. He noted it is improper to certify a class without knowing how the claims can and will likely be tried. Id. at 712. A certification order must therefore indicate how the claims are likely to be tried in order to meaningfully evaluate conformance with Rule 42. Id. Gonzales further observed that certification is not appropriate if it is not determinable, from the outset, that the individual issues can be considered in a manageable, time-efficient, yet fair manner. Id.

It is clear our highest court is “tightening the noose” on class certification orders. From these recent writings, we glean two new requirements for a proper class certification order. First, the order must contain a definition of the class such that it is clearly ascertainable by objective criteria and does not require a determination of the merits. See Intratex, 43 Tex.Sup.Ct.J. at 489; Sheldon, 43 Tex.Sup.Ct.J. at 719. Second, the order must indicate how the claims are likely to be tried. See Bernal, 43 Tex.Sup.Ct.J. 706. We cannot fault Judge Mehaffy for not having a “crystal ball;” however, his December 19, 1999 order does not comport with the new requirements as delineated by Intratex, Sheldon and Bernal. Therefore we are constrained to conclude his order should be reversed and the case remanded to the trial court for compliance with our latest supreme court holdings.

REVERSED AND REMANDED

	Footnotes
1		The Honorable J. Michael Bradford was judge of the 58th District Court at that time.
2		Although generally an unpublished opinion may not be cited as authority, we may take judicial notice of our own unpublished opinion from the prior appeal in this case because it contains the law of the case. See Sledge v. Mullin, 927 S.W.2d 89, 93 (Tex.App.-Fort Worth 1996, no writ); ITC Cellular, Inc. v. Morris, 909 S.W.2d 182, 183 (Tex.App.-Texarkana 1995, no writ); Lake v. Lake, 899 S.W.2d 737, 739 n. 3 (Tex.App.-Dallas 1995, no writ).
3		The Honorable James W. Mehaffy is the current judge of the 58th District Court.
4		“The overriding and novel question in this litigation is whether or not there is a worker’s compensation bar for Mobil employees who might sue Mobil but for such bar-the so-called ‘non-subscriber status question.’ “
5		Under the law of the case doctrine, the initial determinations of questions of law in a case are held to govern throughout the subsequent stages of the case. See Julian Oil & Royalty Co. v. Cade, 7 S.W.3d 767 (Tex.App.-Texarkana 1999, no pet.) (citing Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex.1986)).
6		The court found it had jurisdiction under Tex.Gov’t Code Ann. § 22.001(a)(1) (Vernon 1988) because there was a dissent in the court of appeals.
7		The court accepted jurisdiction under section 6.06(g) of the Texas Motor Vehicle Commission Code. Tex.Rev.Civ.Stat. art. 4413(36), § 6.06(g) (Vernon Supp.2000).
8		The court accepted jurisdiction because the court of appeals’ decision conflicted with a prior decision of another court of appeals or this Court on a question of law material to the decision of the case. Bernal, 43 Tex.Sup.Ct.J. at 707. See Tex.Gov’t Code Ann. §§ 22.225(c); 22.001(a)(2). This jurisdiction issue was decided on a 6-3 ruling.