Class Action Countermeasures
Real Property is a Real Problem for Class Actions -Onyx Props. LLC v. Bd. Cty. Comm'ners of Elbert Cty
Property-rights class actions are difficult to bring, because property tends to be unique, and class actions do not work well with unique claims. But that doesn't stop plaintiffs from trying to certify classes asserting property based claims.
This week's case--Onyx Props. LLC v. Bd. Cty. Comm'ners of Elbert Cty., 2013 U.S. Dist. LEXIS 7151 (D. Colo. Jan. 17, 2013).--arises out of one such effort. The specific details are convoluted, but basically amount to the following: two developments in Elbert County, Colorado were, for various reasons, rezoned from an "A-Agriculture" designation to an "A-1" designation. This was apparently important to at least one set of property owners who ran a composting business--acceptable under one designation but not the other. When Elbert County told them to cease composting, they challenged its ruling in state court, and won; the court found that the rezoning was fatally flawed because it was based on the wrong map.
Not content with their victory in state court, the plaintiffs filed a §1983 class action, alleging that the defendant had violated their constitutional rights (and other property owners') by enacting and then enforcing invalid zoning regulations against them.
The trial court in the District of Colorado denied their request for class certification on a number of grounds, but the most significant was that
the property rights at issue differ appreciably between the proposed class members and, as such, the analysis as to whether the alleged illegal activities of the [Elbert County] BOCC violated the property owners' substantive due process rights requires individualized inquiry.
As a result, the plaintiffs could not establish commonality. But the court went further, pointing out that the unique nature of the plaintiffs' property rights also precluded certification of either a damages class under Rule 23(b)(3) or an injunctive-relief class under 23(b)(2).
Among other problems, any damages class would have trouble showing superiority, since in a property-based case
each class member has an interest in controlling his or her claim given the individualized nature of that claim.
Similarly, the plaintiffs' request for injunctive relief was not appropriate for class treatment because
the BOCC's reliance on the regulations/map at issue to consider past determinations would require an individualized assessment of the applicability and the appropriate relief, as opposed to future injunctive relief to Elbert County citizens and members of the public
In short, the more the plaintiffs relied on their due process rights to their real property, the harder it was to fit their lawsuit into any classwide relief.
For defense lawyers, the takeaway here is simple: the unique nature of property rights means that property-based class actions are almost always a bad idea. The key is showing the court the specific ways in which real property differs in a given area.