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LITTLE ROCK, Ark. (Legal Newsline) – On Feb. 7, the Supreme Court of Arkansas reversed an order that denied a man’s third attempt for a class certification in a lawsuit against a pawn shop over allegations of charging excessive interest.
The high court ruled that the lower court's ruling denying the class certification was "inadequate."
"We conclude that the circuit court was required to enter specific findings of fact and conclusions of law, even in denying class certification, and that it would be advisory to address the parties’ remaining arguments at this juncture. We reverse and remand for further proceedings consistent with this opinion," Associate Justice Josephine Linker Hart wrote. Chief Justice John Dan Kemp concurred.
Herman Conley, who filed the lawsuit with Kenneth Edwards, James Tate Sr. and others against Boll Weevil Pawn Co. in 2016, appealed a ruling from Pulaski County Circuit Court that shut down his third amended motion for class certification in a June 2017 ruling.
Conley challenged the ruling and said the lower court didn’t properly give him and the other plaintiffs the specific discovery of facts that led to the denial of the class certification. Conley also wanted the Supreme Court to reverse the lower court’s decision because he alleged he had proven prima facie showings of commonality and typicality, as well as the notion surrounding Rule 52 of the Arkansas Rules of Civil Procedure, the requirement that a circuit court has to present specific findings when making a decision for a class certification.
While Boll Weevil said the classes Conley proposed aren’t ascertainable, the Supreme Court concluded that the lower court was indeed obliged to display specific findings that made it deny the class certification. It also instructed the lower court to address the other concerns Conley had in the case.
“The Circuit Court's order made no mention of adequacy, predominance or superiority,” the Supreme Court said. “Additionally, the Circuit Court’s order did not in any manner specify which of the two proposed classes any of these conclusions would refer to.”
Boll Weevil wanted the Supreme Court to only apply Rule 52 if the class was actually approved. However, the Supreme Court said that wasn’t the case as its position is to encourage efficiency and expedience. Plus, if the Supreme Court didn’t invoke Rule 52, the Circuit Court would still be out of order because the ruling only mentions one class despite Conley’s proposal for two different classes.
Justice Rhonda K. Wood dissented and said the Supreme Court misapplied a subsection of Rule 52 that says “[r]equests for findings are not necessary for purposes of review,” according to the opinion.
Conley alleged in his original complaint that Boll Weevil charged excessive interest in violation of the state's constitution and Arkansas Deceptive Trade Practices Act.
Conley proposed two different class. Class A represented those who had pawn transactions with Boll Weevil since June 2011 and made a service fee payment on the transaction within a year of entering the agreement. Class B was very similar, the only difference being that the pawn service fee amounted to more than 17 percent of the amount dispersed to the consumer by the pawn shop.