John Tuohy et al. v. Town of Groton et al. (2013)

MEMORANDUM OF DECISION ON PLAINTIFFS' MOTION FOR CLASS CERTIFICATION # 103

This case is a real estate tax appeal brought pursuant to General Statutes § 12–119.   The named plaintiffs in this action own homes on building lots in the Groton Long Point (GLP) subdivision in the defendant town of Groton (town).   They seek a declaration that a 1.35 multiplier of the taxable value of all residential buildings in GLP is illegal and void;  injunctive relief reducing the assessments by the 1.35 adjustment factor;  the prohibition of uniform adjustment factors being applied to those residential properties in the future;  reimbursement of any overpayment of taxes;  attorneys fees and costs.

Presently before the court is the plaintiffs' motion for class certification on behalf of “[a]ll owners of taxable residential real property with buildings thereon in the [GLP] section of the Town of Groton as of October 1, 2011, the Assessment Date, excluding those owners who have individually appealed their real property tax assessments to the Superior Court and whose appeals have reached a final judgment.”

For the following reasons, the plaintiffs' motion for class certification is granted.

This case presents two separate but related questions of law.   The first issue is whether a class action is permissible under § 12–119.   The second, and more complex issue, is whether to certify these particular plaintiffs' class action challenging an assessment method ¹ that increased the taxable value of a geographical set of properties by a certain factor.

Taking the plaintiffs' allegations as true for the purposes of this decision, the court finds that a class action is permissible where, as in this case, a discrete legal issue equally applicable to all members of the class is raised by the plaintiffs.   Furthermore, the court finds that, as the plaintiffs' proposed class meets all requirements for class certification, the class is hereby ordered certified and the named plaintiffs are appointed as representative of the class.

Section 12–119 does not expressly allow class action lawsuits.   The statute provides, in relevant part, as follows:

“When it is claimed that ․ a tax laid on property was computed on an assessment which, under all the circumstances, was manifestly excessive and could not have been arrived at except by disregarding the provisions of the statutes for determining the valuation of such property, the owner thereof or any lessee thereof whose lease has been recorded as provided in [§ ]47–19 and who is bound under the terms of his lease to pay real property taxes, prior to the payment of such tax, may ․ make application for relief to the superior court ․”

Therefore, two elements must be satisfied, namely, that the plaintiffs' assessments were “manifestly excessive and ... could not have been arrived at except by disregarding the provisions of the statutes for determining the valuation of the property ․” (Emphasis in original;  internal quotation marks omitted.)  Redding Life Care, LLC v. Redding, 308 Conn. 87, 105, 61 A.3d 461 (2013).

Section 12–119 specifies that only an “owner” (or “any lessee thereof” who has contracted to pay real property taxes on behalf of the owner) may apply for relief to the superior court for a “manifestly excessive” tax or assessment resulting in a tax.   Thus, whether through traditional joinder or through a certified class action, only a proper party could be added under § 12–119 to challenge the property tax.   But the plaintiffs in this case are not attempting to add any non-property owners.   On the contrary, their proposed class is limited to “[a]ll owners of taxable residential real property ․, in ․ [GLP] ․” (Plaintiffs' 3/19/13 Memorandum of Law (MOL), p. 24.   Therefore, certification of this particular class of owners does not violate the text of § 12–119.

Connecticut courts have previously certified classes challenging improper assessments under § 12–119.   See, e.g., Tibbetts v. Greenwich, Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV–96–0153184–S (February 14, 1997) (19 Conn. L. Rptr. 165);  Humiston v. Southbury, Superior Court, judicial district of Waterbury, Docket No. CV–96–0133244–S (September 28, 2000).   While these cases predate Collins v. Anthem Health Plans, Inc., 275 Conn. 309, 331–32, 880 A.2d 106 (2005) (Collins II) (delineating “a three part inquiry to determine whether common questions of law or fact predominate” for courts deciding whether to certify a class), as well as the 2009 amendments to Practice Book (P.B.) §§ 9–8 and 9–9 concerning class actions, their precedent is still valuable to show that a class action under § 12–119 is not a novel concept.

Moreover, “doubts regarding the propriety of class certification should be resolved in favor of certification ․” (Internal quotation marks omitted.)   Artie's Auto Body, Inc. v. Hartford Fire Ins. Co., 287 Conn. 208, 213, 947 A.2d 320 (2008).

Therefore, § 12–119 does not, on its face, prohibit plaintiffs from joining together in a class action lawsuit.   Where, as in this case, plaintiffs present a discrete legal issue equally applicable to the entire class, a class action may be brought under § 12–119.

“The standards for class certification are well settled:  A trial court must undertake a rigorous analysis to determine whether the plaintiffs have borne the burden of demonstrating that the class certification requirements of [P.B.] §§ 9–7 and 9–8 have been met ․ A trial court nonetheless has broad discretion in determining whether a suit should proceed as a class action ․ As long as the trial court has applied the proper legal standards in deciding whether to certify a class, its decision may ․ be overturned only if it constitutes an abuse of discretion ․

“In determining whether to certify the class, a trial court is bound to take the substantive allegations of the complaint as true ․ That does not mean, however, that a court is limited to the pleadings when determining whether the requirements for class certification have been met.   On the contrary ․ class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action ․ and ․ it sometimes may be necessary for the court to probe behind the pleadings before coming to rest on the certification question ․ In determining the propriety of a class action, however the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of the class action rules are met ․ Although no party has a right to proceed via the class mechanism ․ doubts regarding the propriety of class certification should be resolved in favor of certification ․

“The rules of practice set forth a two step process for trial courts to follow in determining whether an action or claim qualifies for class action status.   First, a court must ascertain whether the four prerequisites to a class action, as specified in [P.B.] § 9–7, are satisfied ․

“Second, if the foregoing criteria are satisfied, the court then must evaluate whether the certification requirements of [P.B.] § 9–8 are satisfied ․ Because our class certification requirements are similar to those embodied in Rule 23 of the Federal Rules of Civil Procedure, and our jurisprudence governing class actions is relatively undeveloped, we look to federal case law for guidance in construing the provisions of [P.B.] §§ 9–7and 9–8 ․” (Brackets omitted;  internal quotation marks omitted.)  Sal's Glass Co., LLC v. Duplicating Methods Co., Superior Court, judicial district of Hartford, Docket No. CV10–6016006–S (March 11, 2013) (Sal's Glass ) [55 Conn. L. Rptr. 764].

P.B. § 9–7 requirements

Practice Book § 9–7 sets out four prerequisites to a class action:  “(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.”   Briefly stated, P.B. § 9–7 requirements cover numerosity, commonality, typicality and adequacy of representation.   See Collins II, supra, 322.   The town has conceded the relatively low-threshold commonality requirement, leaving the court to consider the remaining requirements.   See defendant's 4/26/13 MOL, p. 18.

1. Numerosity

“There is no mechanical test for determining whether in a particular case the class is so numerous that joinder of all members is impracticable.   The issue is one for the court to be resolved in light of the facts and circumstances of the case.”  (Citation omitted.)  Campbell v. New Milford Board of Education, 36 Conn.Sup. 357, 360–61, 423 A.2d 900 (1980).

“There is no ‘magic number’ that automatically fulfills the numerosity requirement;  because numerosity is tied to the impracticality of joinder under the particular circumstances of the case.”  (Citation omitted.)  Arduini v. Automobile Ins. Co. of Hartford, Connecticut, 23 Conn.App. 585, 590, 583 A.2d 152 (1990).

From a purely numerical standpoint, a class of approximately 620 plaintiffs well exceeds accepted notions of numerosity.   But a proper judicial inquiry into numerosity depends not on “any particular size or number,” but on the impracticability of joinder “in the particular circumstances of the case.”   Sal's Glass, supra.

“Apart from class size, factors relevant to the joinder impracticability issue include judicial economy arising from avoidance of a multiplicity of actions, geographic disbursement of class members, size of individual claims, financial resources of class members, [and] the ability of claimants to institute individual suits ․” (Internal quotation marks omitted.)   Maltagliati v. Wilson, Superior Court, judicial district of Hartford, Docket No. CV–97–0575612–S (October 7, 1999) (quoting 1 H. Newberg, Class Actions (3d Ed.1992) § 3.06, pp. 27–28).

In terms of judicial economy, certainly one class action lawsuit to recover for overpayment of taxes based on an allegedly improper assessment method is more economical than a multitude of individual lawsuits.   The town, however, argues that because the deadline has passed for filing individual suits under § 12–119, any potential inconvenience is no longer at issue.   As the plaintiffs point out, the filing of a class action lawsuit suspends the statute of limitations for all class members who would have been parties if the suit were permitted to continue as a class action.   See Grimes v. Housing Authority, 242 Conn. 236, 242–43, 698 A.2d 302 (1997) (adopting the rule set forth by the United States Supreme Court in American Pipe & Construction Co. v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974)).

In the present case, the class members are not widely geographically disbursed;  on the contrary, they are confined to a discrete section of the town.  “Proximity and ease of identification tend to make joinder more practicable.”  Maltagliati v. Wilson, supra.   But concentration of class members in one particular area has not been much of a barrier to class certification, as many courts have certified classes defined by geography, including the contours of a particular neighborhood.   See Collins v. Olin Corp., 248 F.R.D. 95, 101 (D.Conn.2008).

The town points out that the plaintiffs had other opportunities to challenge their assessments, such as informal hearings and Board of Assessment appeals, and that only a fraction of them actually took those opportunities.   See defendant's 4/26/13 MOL, p. 15.   But the fact that some or even most of the plaintiffs did not exhaust every opportunity for a legal remedy does not necessarily indicate widespread disinterest in the current litigation.   Moreover, the assertion that these opportunities were “cost-free” methods of challenging property taxes is unconvincing.   Mounting even an informal tax appeal requires an investment of time and effort, along with an understanding of why and how an assessment can be challenged.   In this case, to exclude potential class members for not fully utilizing other legal options would be to deny legal recourse “for individuals ․ who by reason of ignorance ․ or lack of counsel may not have been in a position to seek [a hearing] on their own behalf.”  (Internal quotation marks omitted.)   Macomber v. Travelers Property, Superior Court, judicial district of New Britain, Complex Litigation Docket, Docket No. X03–CV–99–0496761–S (May 26, 2004) (37 Conn. L. Rptr. 349) (quoting U.S. ex rel. Morgan v. Sielaff, 546 F.2d 218, 222 (7th Cir.1976)).

The fact only 25 taxpayers initiated individual lawsuits may have been due to the relatively small size of individual claims.   The plaintiffs assert that the yearly average tax increase due to the allegedly improper assessment method is $1,129 per property, or $5,645 over five years.   For an individual claimant, a few thousand dollars saved in taxes would quickly be consumed by the costs of litigation.   But through a class action, those costs can be shared among plaintiffs.

The plaintiffs present an affidavit describing an organized, democratic decision-making process through the GLP Association, which held a meeting attended by over 200 members in which only two negative votes were cast against the mounting of a class action.   See plaintiffs' 5/10/13 reply, p. 6, n.2;  affidavit of John P. Tuohy (Tuohy) (dated 5/10/13), ¶ 6.   Taking this allegation as true, see Sal's Glass, supra, the circumstances in the present case are distinguishable from the cases on numerosity that the town relies upon.

Specifically, in Maltagliati v. Wilson, supra, the numerosity requirement was not satisfied by 118 potential plaintiffs because the plaintiffs did not produce any “evidence that any appreciable number of these property owners are interested in pursuing a class action,” and therefore, “118 should, at best, be viewed as the upper limit with respect to the size of a potential class.”   Likewise, in Independent Sch. Dist. No. 89 v. Bolain Equipment, 90 F.R.D. 245, 247–48 (W.D.Okla.1980), a claimed class of up to 600 members failed to satisfy the numerosity requirement, because the plaintiffs only had evidence that “only forty-one of the six hundred districts [had] even a minimal interest in participating in the instant action.”   These cases demonstrate that even classes with potentially large counts can fail to satisfy the numerosity requirement if the evidence is insufficient.   Here, however, Tuohy's affidavit satisfies that evidentiary burden.

2. Commonality

The second prerequisite under P.B. § 9–7 is commonality, meaning that “there are questions of law or fact common to the class[.]”  Historically, commonality has been “relatively easy to satisfy,” and though the United States Supreme Court has recently cautioned that courts “must not define common questions too broadly,” the town conceded that this case involves legal and factual questions common to the class.  Sal's Glass;  see also defendant's 4/26/13 MOL, p. 18.   Therefore, the court finds that the plaintiffs have satisfied the commonality requirement.

3. Typicality

Typicality requires a showing that “the claims or defenses of the representative parties are typical of the claims or defenses of the class [.]”  (P.B. § 9–7(3)).  “The typicality inquiry is intended to assess whether the case can be efficiently maintained as a class action and whether the named plaintiffs have incentives that align with those of absent class members so as to assure that the absentees' interests will be fairly represented.”  Matyasovszky v. Hous. Auth. of Bridgeport, 226 F.R.D. 35, 42 (D.Conn.2005).

As with commonality, the town appears to concede that the plaintiffs can satisfy the typicality requirement.   The court agrees that typicality is satisfied under these circumstances.   This case can be efficiently maintained as a class action because each plaintiff seeks relief based on the same factual allegation and the same legal theory.   Their incentives to recoup allegedly overpaid taxes is the same, and their interests do not compete with one another.   While their individual damages would be different, calculating those damages would be, in all likelihood, a straightforward mathematical exercise.

The town claims that the adjustment factor was part of a comprehensive revaluation process designed to equalize the tax burden amongst all of the town's property owners.   The plaintiffs argue that the adjustment factor was a systematic inflation of property values that were already correctly valued.   For the purposes of class certification, the court accepts the plaintiffs' version as true, see Sal's Glass, supra, and in light of this, the court finds that the typicality requirement has been satisfied.

4. Adequacy of Representation

The final requirement of P.B. § 9–7 provides for representative parties to fairly and adequately protect the interests of the class.  “The adequacy-of-representation requirement addresses concerns about the competency of class counsel and conflicts of interest ․ The adequacy requirement is met [when] the representatives:  (1) have common interests with the unnamed class members;  and (2) will vigorously prosecute the class action through qualified counsel.”  (Citations omitted;  internal quotation marks omitted.)  Collins II, supra, 326.

As explained above, the interests of the representative plaintiffs are allied with the unnamed class members.   There is no conflict of interest as their claims are not in competition with one another.   Regarding the qualification of counsel, Robinson & Cole is one of the largest law firms in the state, and it is undisputed that the attorneys representing the plaintiffs are competent and experienced.   The town attempts to implicate due process concerns by suggesting that the representative plaintiffs may not diligently prosecute this action if the cost of proving their allegations becomes overly burdensome.   But the town's concern for the substantive rights of the unnamed plaintiffs rings hollow, especially considering how many of those taxpayers did not pursue individual tax appeals and how the current litigation strategy was overwhelmingly supported by the GLP Association.   See Tuohy affidavit, ¶ 6.   Moreover, if the cost of proving the allegations of the class proves to be prohibitively expensive for the representative class, then proving those same allegations would likely be just as prohibitively expensive for individual unnamed plaintiffs.   Therefore, the court finds that the adequacy prerequisite has been satisfied.

Practice Book § 9–8 Requirements

In addition to the class action prerequisites listed in P.B. § 9–7, at least one out of three conditions from P.B. § 9–8 must be satisfied.   The plaintiffs argue that this class can be certified under either § 9–8(2) or § 9–8(3).

Practice Book § 9–8(2) allows a class action if all of the P.B. § 9–7 requirements are satisfied and “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole[.]”  In this case, the town has acted “on grounds generally applicable to the class,” as the 1.35 adjustment factor was applied to every class member.   Also, the plaintiffs seek both injunctive and declaratory relief as well as a refund for the overpayment of taxes.

The town argues that Wal–Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2557, 180 L.Ed.2d 374 (2011), demonstrates that a class action is inappropriate when individualized determinations of money damages are necessary.   See defendant's 4/26/13 MOL, p. 36.   According to the plaintiffs, this case does not involve individualized determinations of liability if the 1.35 adjustment factor is improper;  the monetary remedy would require only individualized mathematical calculations as to what each plaintiff's refund should be.   Therefore, the Wal–Mart case, involving individual determinations of eligibility for back pay, is inapposite.   Therefore, the class action may proceed under P.B. § 9–8(2).

Even if P.B. § 9–8(2) did not apply under these circumstances, the plaintiffs could still proceed with a class action under P.B. § 9–8(3), which permits a class action if the P.B. § 9–7 requirements are satisfied and “the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.   The matters pertinent to the findings include:  (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions;  (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class;  (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum;  (D) the difficulties likely to be encountered in the management of class action.”

“The Collins II Court set forth a three-part test for determining if common questions of law or fact predominate in a case where class certification is sought.   First, the court should review the elements of the causes of action that the plaintiffs seek to assert on behalf of the putative class.   Second, the court should determine whether generalized evidence could be offered to prove those elements on a class-wide basis or whether individualized proof will be needed to establish each class member's entitlement to monetary or injunctive relief.   Third, the court should weigh the common issues that are subject to generalized proof against the issues requiring individualized proof in order to determine which predominate ․ Only when common questions of law or fact will be the object of most of the efforts of the litigants and the court will the predominance test be satisfied.”  (Citations omitted;  internal quotation marks omitted).  Sal's Glass, supra (quoting Ahmad v. Yale–New Haven Hospital, Inc., 104 Conn.App. 380, 391, 933 A.2d 1208 (2007)).

The predominance inquiry serves as a more demanding version of the commonality criterion, “in that it requires a probing inquiry to determine whether the common issues that are subject to generalized proof are more substantial than the issues subject only to individualized proof.”  (Internal quotation marks omitted.)  Id. Even under this probing standard, by accepting the plaintiffs' version of the facts as true, this court finds that the common issue in this case is far more substantial than issues subject to individualized proof.²

One last wrinkle to this issue arises in the context of § 12–119, which, as the town points out, has its own burdens of proof in that the plaintiffs must prove that their assessments were “manifestly excessive” and “could not have been arrived at except by disregarding the provisions of the statutes for determining the valuation of the property.”  Redding Life Care, LLC v. Redding, supra, 308 Conn. 105.

Neither of these elements necessarily requires an individual inquiry, if, as in this case, an allegedly improper methodology were uniformly applied to all members of a proposed class.

For all of the foregoing reasons, the plaintiffs' motion for class certification is granted.

Henry S. Cohn, Judge

FOOTNOTES

FN1. The court notes that this case shares similarities with Chamber of Commerce of Greater Waterbury, Inc. v. Waterbury, 184 Conn. 333, 439 A.2d 1047 (1981)..  FN1. The court notes that this case shares similarities with Chamber of Commerce of Greater Waterbury, Inc. v. Waterbury, 184 Conn. 333, 439 A.2d 1047 (1981).

FN2. At least according to the plaintiffs, this case does not require individualized showings of class members' actual property values;  it only requires the mathematical exercise of removing the 1.35 adjustment factor from each valuation.   Once again, the court has reached a merits issue, and an issue of fact, that should not be considered during a class certification.   If the court were to accept the town's position that the adjustment factor was an inseparable part of a comprehensive valuation process, then class certification would be inappropriate, because removal of the adjustment factor would necessitate redoing the revaluations of each individual property.For a recent example of “substantial areas of individualized proof” causing a proposed class to fail the predominance requirement, see Cook v. Family Dollar Stores of Conn., Inc., Superior Court, judicial district of Waterbury, Complex Litigation Docket, Docket No. X10–CV–11–6011946–S (March 18, 2013) (55 Conn. L. Rptr. 726).   In that case, store managers at a chain of dollar stores could not be certified as a class for the purposes of a claim for unpaid overtime, where their responsibilities varied between stores of different sizes and number of other employees available to perform nonmanagerial tasks.  Id., 730.   Thus, each manager would need to present individual evidence in order to establish that he or she was not an executive exempt from overtime regulations.   In the present case, however, if the 1.35 adjustment factor is an illegal assessment method, it is illegal for the stand for the entire class of taxpayers, regardless of any individualized evidence..  FN2. At least according to the plaintiffs, this case does not require individualized showings of class members' actual property values;  it only requires the mathematical exercise of removing the 1.35 adjustment factor from each valuation.   Once again, the court has reached a merits issue, and an issue of fact, that should not be considered during a class certification.   If the court were to accept the town's position that the adjustment factor was an inseparable part of a comprehensive valuation process, then class certification would be inappropriate, because removal of the adjustment factor would necessitate redoing the revaluations of each individual property.For a recent example of “substantial areas of individualized proof” causing a proposed class to fail the predominance requirement, see Cook v. Family Dollar Stores of Conn., Inc., Superior Court, judicial district of Waterbury, Complex Litigation Docket, Docket No. X10–CV–11–6011946–S (March 18, 2013) (55 Conn. L. Rptr. 726).   In that case, store managers at a chain of dollar stores could not be certified as a class for the purposes of a claim for unpaid overtime, where their responsibilities varied between stores of different sizes and number of other employees available to perform nonmanagerial tasks.  Id., 730.   Thus, each manager would need to present individual evidence in order to establish that he or she was not an executive exempt from overtime regulations.   In the present case, however, if the 1.35 adjustment factor is an illegal assessment method, it is illegal for the stand for the entire class of taxpayers, regardless of any individualized evidence.

Cohn, Henry S., J.