Florida appellate court: Extensive delay can warrant denial of class certification

By Jessica Karmasek | Feb 19, 2016

Florida's Fourth District Court of Appeal in West Palm Beach.  

WEST PALM BEACH, Fla. (Legal Newsline) - A Florida appellate court recently ruled that a plaintiff’s failure to timely seek class action certification is grounds for denial of certification.

Florida’s Fourth District Court of Appeal, in a per curiam opinion filed Feb. 3, said a lower court was correct in issuing a non-final order denying class certification based on the delay in the case.

Plaintiffs Antonio and Angelia Osborne appealed to the Fourth District, arguing that the trial court applied the wrong legal standards by denying certification on the grounds they did not pursue class representation “as soon as practicable,” as required by the state Rule of Civil Procedures.

They also argued that the Palm Beach County Circuit Court did not consider evidence and make findings of fact.

But the appellate court agreed with the trial court, noting the case’s “extensive” delay and counsel’s “inaction.”

The Osbornes, who claim the defendant companies made usurious mortgage loans to them and 400 other borrowers, filed a complaint seeking civil remedies for RICO violations, usury and licensing violations in July 2009. Three months later, they filed an amended complaint including allegations for class certification. The RICO counts were later dismissed.

The defendants moved to deny class certification, arguing, in part, that the Osbornes did not prove the elements required for class certification.

At a hearing last March, the defendant companies -- represented by West Palm Beach law firm Rosenbaum Mollengarden PLLC -- reminded the trial court that the case was brought in 2009 and although there had been an appeal during this time, the appeal became final more than a year prior, while the class certification remained pending.

According to the Fourth District’s opinion, the trial court asked the plaintiffs’ counsel why he had “slept” on his client’s right. Counsel -- Tim Wright of Stuart, Fla., firm Wright Ponsoldt & Lozeau Trial Attorneys LLP -- did not dispute that he had not been diligent in moving the case forward.

The trial court therefore granted the motion to deny class certification and instructed the lawyers to set the case for trial.

The Osbornes, on appeal, argued the trial court applied the wrong law because the obligation in the rule to seek class certification as soon as practicable does not apply solely to the party seeking class certification. They argued this was not a basis to deny them class certification.

The Osbornes also complained the court focused on the age of the case.

“Although rule 1.220(d)(1) allows any party, or the court on its own, to seek a determination of class certification, we agree with defendants that this should primarily be the responsibility of the proponent of the class,” the appellate court wrote in its four-page ruling. “But even if the court misapplied this burden to the plaintiffs, the court acted within its discretion in denying class certification based on the delay in this case.”

The Fourth District explained that Rule 1.220 does not specifically require an evidentiary hearing, but one may be necessary if the elements for class certification are not clear from the pleadings.

“Here, unreasonable delay was apparent from the face of the record, and plaintiffs’ counsel conceded that he had not diligently moved the case forward,” the court wrote.

“Defendants informed the court that the Osbornes had not taken discovery since 2010, and plaintiffs’ counsel did not dispute this or offer any reason for failing to take action on class certification.”

The appellate court said extensive delay, alone, can warrant denial of class certification.

“Delay clearly affects potential class members and defendants,” the court wrote. “The requirement of diligence in the pursuit of class certification is not a matter of mere judicial window dressing. Failure to timely certify prejudices putative class members by delaying recovery of funds to which they are ostensibly entitled.

“Delaying certification can foster a false sense of security in claimants who may sit on their rights in the mistaken belief they are being protected by the class counsel. If class certification ultimately is denied, the ability of putative class members to proceed thereafter might be barred or hindered.

“Defendants, too, are entitled to know at the earliest practicable date whether they will be facing a limited number of known plaintiffs or a much larger mass of generally unknown plaintiffs.”

Wystan Ackerman, a partner at the Hartford, Conn., office of Robinson+Cole and who chairs the firm’s class action team, says the appellate court’s decision makes an interesting point -- one that defendants could effectively raise in other jurisdictions.

“This is an argument that may sometimes be overlooked by defendants as litigation drags on,” he wrote on his blog, Class Actions Insider. “It is an argument that, as this case demonstrates, can be effectively made in appropriate cases.”

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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Rosenbaum Mollengarden PLLC Wright Ponsoldt & Lozeau Trial Attorneys LLP

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