Stromwall v. Van Hoose

Summary

The Arkansas Supreme Court affirmed orders dismissing and granting summary judgment against Linda Stromwall's illegal-exaction claims concerning municipal payments to the Arkansas Municipal League's Municipal Legal Defense Program and a related settlement. The court held that an illegal-exaction action under Arkansas Constitution article 16, section 13 is a class action as a matter of law, but the plaintiff failed to establish an adequate representative for a defendant class under Arkansas Rule of Civil Procedure 23.2. The court further held that the Municipal Legal Defense Program was a lawful municipal association and not a contract or dry-hole contract.

Holdings

1. An illegal-exaction action under article 16, section 13 is a constitutionally created class action, and adequacy of representation under the ordinary class-action rules is not an issue for the plaintiff representative. A taxpayer may sue on behalf of all taxpayers affected by the alleged exaction.
2. A plaintiff seeking to proceed against members of an unincorporated association as a defendant class under Rule 23.2 bears the burden of showing that the proposed representative will fairly and adequately protect the interests of the association and its members.
3. Summary judgment was proper because municipal payments to participate in the Municipal Legal Defense Program and payments to settle the Bitner litigation were authorized by law and therefore were not illegal exactions.
4. The Municipal Legal Defense Program was not a contract or a dry-hole contract; it was a program within a constitutionally valid municipal association authorized by section 14-54-101.
5. The circuit court did not err by failing to enter findings of fact and conclusions of law under Rule 52 because Rule 23.2 is separate from Rule 23 and does not require class certification before proceeding under that rule.

Questions Presented

1. Whether an illegal-exaction action under article 16, section 13 of the Arkansas Constitution permits a taxpayer from one municipality to represent taxpayers in other municipalities.
2. Whether Stromwall could proceed against the Arkansas Municipal League and its municipal members as a defendant class under Arkansas Rule of Civil Procedure 23.2.
3. Whether the circuit court improperly considered the merits at the class-certification stage.
4. Whether summary judgment was proper on the claims that municipal payments to the Municipal Legal Defense Program and the Bitner settlement were illegal exactions.
5. Whether the Municipal Legal Defense Program was an unlawful or dry-hole contract.
6. Whether the circuit court erred by failing to enter findings of fact and conclusions of law under Rule 52.
7. Whether joinder of the Bitner plaintiff presented a nonmoot issue on appeal.

Disposition

affirmed