Mid-South Adjustment Co., Inc. v. Brittany Smith, on Behalf of Herself and All Others Similarly Situated

Citation: 2022 Ark. 196

Court: Supreme Court of Arkansas; November 3, 2022; Arkansas; State Supreme Court

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Mid-South Adjustment Co. Inc. appealed a class-action certification order from the Pulaski County Circuit Court, which found that Mid-South violated the Arkansas Fair Debt Collection Practices Act when collecting a debt on behalf of Jacksonville Water Works. The class action, initiated by Brittany Smith, claims that Mid-South sent a collection letter for a debt that was beyond the three-year statute of limitations. The circuit court defined the class as individuals in Arkansas who received a similar letter after December 2, 2017, for debts with no payments made in the last three years.

Mid-South contended that the class definition was unworkable due to the need for individualized inquiries to determine payment histories, which are maintained by Jacksonville Water Works, a nonparty. Additionally, Mid-South argued that the circuit court erroneously concluded that a class action was the superior method for adjudication and challenged the adequacy of Smith as the class representative. The Supreme Court of Arkansas affirmed the circuit court’s decision, emphasizing the broad discretion circuit courts have in class certification and confirming that the class definition meets the requirement of being sufficiently definite and identifiable by objective criteria.

In *Ferguson v. Kroger Co.*, the court found that a five-criteria inquiry to determine class members' intent was overly complex and subjective, leading to a denial of class certification. Conversely, in *Baggett*, class certification was affirmed despite the defendant's claim that class membership was not readily ascertainable through individual insurance-claim file reviews. The court determined that class membership could be objectively established by comparing requested and received payments, with the criteria being ascertainable by specific dates and conditions. Specifically, class members must be Arkansas individuals who received a letter from Mid-South regarding Jacksonville Water Works after December 2, 2017, and made their last payment over three years prior to receiving that letter. The court emphasized that while Mid-South's arguments about the statute of limitations and record control were relevant, they fell outside the scope of the class certification review.

Regarding superiority, Mid-South argued that individual lawsuits would yield greater recoveries than a class action, where recoveries are capped at $500,000 or 1% of Mid-South's net worth. Mid-South suggested that individual plaintiffs could recover up to $1,000, while class members might only see nominal damages. The court rejected this argument, stating that any potential recovery for individual members was speculative at this stage, and emphasized that class actions are more efficient than multiple individual lawsuits.

Finally, Mid-South contended that class representative Brittany Smith was inadequate under Rule 23(a), which requires representatives to fairly protect class interests. The court noted that a representative must show interest in the case, familiarity with the issues, and the ability to assist in decision-making. The discussion implies that the adequacy of Smith will be assessed based on these criteria.

Mid-South contends that Smith's deposition conduct indicates her unfamiliarity with the case, citing her initial belief that she was involved in a different lawsuit and her misunderstanding of the lawsuit's basis. They also claim she was evasive and took frequent breaks. However, the court affirms that there was no abuse of discretion, noting that Smith articulated her claims clearly, stating that the debt was too old to be collected, and acknowledged her role in representing individuals with similar issues. Regarding the timeliness of Smith's class certification motion, filed approximately eighteen months after her amended complaint, the court finds this period reasonable based on the case's progression. Mid-South's argument about the circuit court's delay in ruling on this motion was not preserved for appeal and thus not considered. The ruling is affirmed.