Michael Northrup and Homer Max Wiesen v. Southwestern Bell Telephone Company ( 2000 )

NUMBER 13-00-377-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI

___________________________________________________________________

MICHAEL NORTHUP AND

HOMER MAX WIESEN

, Appellants,

v.

SOUTHWESTERN BELL

TELEPHONE COMPANY, ET AL.

, Appellees.

___________________________________________________________________

On appeal from the 357th District Court of Cameron County, Texas.

___________________________________________________________________

O P I N I O N

Before Chief Justice Seerden and Justices Dorsey and Rodriguez

Opinion Per Curiam

Michael Northrup and Homer Max Weisen have filed notices of appeal attempting to appeal the settlement of a class action. The lawsuit was filed over certain fees charged by SWBT. The case settled for $10 million. The trial court approved the settlement. Northrup and Weisen are both attempting to appeal the settlement. We dismiss the notices of appeal for want of jurisdiction. We have addressed Northrup and Weisen separately, as the issues relevant to each are slightly different.

(1) Northrup

Northrup was a member of the class who was not named as a party. He did not intervene in the class prior to the fairness hearing on the settlement, nor did he appear at the hearing or opt out of the class. He did file an objection to the settlement and a notice of appeal. In the notice of appeal, he included language indicating that he was "formally intervening" in the suit.

There is no binding authority on this issue in Texas. A couple of courts of appeals have reached similar questions, both holding that the court had no jurisdiction because the party attempting to appeal was not a party to the suit below. The federal courts, interpreting a similar federal rule, are split concerning whether an unnamed class member may appeal a settlement without formally intervening prior to settlement.

The Houston 14th Court has written:

An unnamed class member is not technically a "party" under the rules. . . [R]easons for requiring unnamed class members to intervene formally in the action to gain standing to appeal . . . [are]:

(1) Unnamed individuals cannot represent the class absent the procedural protections provided for by the class action rules.

(2) Class members who disagree with the course of a class action have adequate procedures available through which their individual interests may be protected. Unnamed class members who disagree with the actions taken by the class representatives may (a) seek a separately represented sub-class; (b) ask for replacement of the class representative; (c) intervene in the class action, (d) file their own collateral suit to establish that their interests were not adequately represented, or (e) opt out of the class.

(3) Class actions would become entirely unmanageable and unproductive if each member had standing to individually appeal a judgment. Permitting direct appeals by individual unnamed class members would necessarily defeat the very purpose of class action lawsuits.

San Juan 1990-A, L.P. v. Meridian Oil Inc., 951 S.W.2d 159, 161­63 (Tex. App.--Houston [14th Dist.] 1997, pet. denied).

This Court also holds that an unnamed class member may not appeal because he is not--technically--a party to the suit unless he has filed a formal intervention prior to approval of the settlement.

(2) Weisen

Weisen was not a member of the class as the class was defined. He argues that he was a class member because he was charged the fees at issue in the litigation, even though they were called something else.

Assuming that Weisen is not a member of the class, the San Antonio court was presented with a similar question in O'Reilly v. Brodie, 975 S.W.2d 57, 59 (Tex. App.--San Antonio 1998, no pet.). First, noting that, "No Texas court has addressed the discrete issue of whether a non-class member, a "stranger" to the class action suit, has standing to appeal the judgment approving the settlement," it explained:

We begin with the general rule that only parties (named class members) to a class action have standing to object to a settlement. See Gould v. Alleco, Inc., 883 F.2d 281, 284 (4th Cir.), cert. denied, 493 U.S. 1058, 110 S. Ct. 870, 107 L. Ed. 2d 953 (1989). This general rule is consistent with the fundamental nature of a class suit as a representative procedural tool. NEWBERG & CONTE, NEWBERG ON CLASS ACTIONS § 1.02 (3rd ed.1992). "Where the parties interested in the suit are numerous, their rights and liabilities are so subject to change and fluctuation by death or otherwise, that it would not be possible, without very great inconvenience, to make all of them parties, and would often time prevent the prosecution of the suit to a hearing, a portion of the parties in interest represent the entire body." Id. (quoting Smith et al. v. Swormstedt et al., 16 How. 288, 302, 14 L. Ed. 942 (1853)). The named class members represent all who share a common interest but whose joinder is impracticable. Id. In order to achieve the goals of manageability and efficiency, only named class members are given standing in the suit. See In re Domestic Air Transp. Antitrust Litig., 148 F.R.D. 297, 342-43 (N.D.Ga.1993); see also San Juan 1990-A, 951 S.W.2d at 163. If non-class members were allowed to object, the court would be forced to examine the effects of the proposed settlement on an individual whose rights are not affected by the terms of the settlement; such rule is contrary to the purpose of the notice requirement. See Gould, 883 F.2d at 284. In furtherance of due process concerns, the notice and objection requirement allows those whose rights and privileges are affected by a class settlement the opportunity to be heard. It is axiomatic that only those whose rights and privileges are bound by the terms of the settlement have standing to object to the settlement, and by extension, have standing to appeal from the final order approving the settlement.

Ultimately, the San Antonio court held that it did not have jurisdiction to hear an appeal of a class settlement filed by a non-class member. Id. It reasoned that non-class members are not parties to the suit, not bound by the terms of the settlement, and have no standing to appeal the settlement. Id.

We also dismiss Weisen's notice of appeal for lack of jurisdiction. Regardless of whether Weisen was a member of the class or not, he was at least an unnamed member of the class, and thus, we would dismiss his notice of appeal for the same reasons we dismissed Northrup's. A non-member is not a party, but a complete stranger. He has no standing to appeal.

PER CURIAM

Do not publish.

Tex. R. App. P. 47.3(b).

Opinion delivered and filed

this the 21^st day of December, 2000.