Corley, et al v. Entergy Technol Hold, et al

United States Court of Appeals
Fifth Circuit
F I L E D
October 13, 2005
Charles R. Fulbruge III
Clerk
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 04-41113
_____________________
DUANE T. CORLEY; ET AL.,
Plaintiffs,
DUANE T. CORLEY; WILLIAM A. ROANE,
Plaintiffs - Appellants,
versus
ORANGEFIELD INDEPENDENT SCHOOL DISTRICT; WILLIAM EDWARD
WINFREE; PAUL CORMIER, Individually and as Independent
Executor of the Estate of Jewell E. Cormier, deceased; ROBERT
CORMIER; DEVRA CORMIER; CORMIER FAMILY LIMITED PARTNERSHIP,
Intervenor Plaintiffs - Appellees,
versus
ENTERGY TECHNOLOGY HOLDING CO.; ENTERGY CORP.; ENTERGY
ARKANSAS INC.; ENTERGY LOUISIANA INC.; ENTERGY MISSISSIPPI
INC.; ENTERGY SERVICES INC.; ENTERGY TECHNOLOGY CO.,
Defendants - Appellees.
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DOUGLAS C. DISHMAN; TIM E. DISHMAN,
Plaintiffs - Appellants,
versus
ENTERGY CORPORATION; ENTERGY GULF STATES INC.;
ENTERGY ARKANSAS INC.; ENTERGY LOUISIANA INC.;
ENTERGY MISSISSIPPI INC.; ENTERGY SERVICES INC.;
ENTERGY TECHNOLOGY HOLDING COMPANY; ENTERGY
TECHNOLOGY COMPANY,
Defendants - Appellees.
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_____________________
consolidated with
No. 04-41127
_____________________
DUANE T. CORLEY; ET AL.,
Plaintiffs,
DUANE T. CORLEY; WILLIAM A. ROANE;
FEAR FARM INC.; RUBY B. WILSON,
Plaintiffs - Appellants,
versus
ORANGEFIELD INDEPENDENT SCHOOL DISTRICT; WILLIAM EDWARD
WINFREE; PAUL CORMIER, Individually and as Independent
Executor of the Estate of Jewell E. Cormier, Deceased;
ROBERT CORMIER; DEVRA CORMIER; CORMIER FAMILY LIMITED
PARTNERSHIP,
Intervenor Plaintiffs - Appellees,
versus
ENTERGY TECHNOLOGY HOLDING CO.; ENTERGY CORP.; ENTERGY
ARKANSAS INC.; ENTERGY LOUISIANA INC.; ENTERGY MISSISSIPPI
INC.; ENTERGY SERVICES INC.; ENTERGY TECHNOLOGY CO.,
Defendants - Appellees.
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DOUGLAS C. DISHMAN; TIM E. DISHMAN,
Plaintiffs - Appellants,
versus
ENTERGY CORPORATION; ENTERGY GULF STATES INC.; ENTERGY ARKANSAS
INC.; ENTERGY LOUISIANA INC; ENTERGY MISSISSIPPI INC.; ENTERGY
SERVICES INC.; ENTERGY TECHNOLOGY HOLDING COMPANY; ENTERGY
TECHNOLOGY COMPANY,
Defendants - Appellees.

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* Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
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_________________________________________________________________
Appeals from the United States District Court
for the Eastern District of Texas
USDC Nos. 1:98-CV-2006-RAS and 1:98-CV-2054-RAS
_________________________________________________________________
Before JOLLY, WIENER and DENNIS, Circuit Judges.
PER CURIAM:*
The appellants in this case, a group of landowners in
Louisiana, Mississippi and Texas (“the landowners”), brought suit
against Entergy Corporation and its subsidiaries (collectively,
“Entergy”), alleging that the company engaged in unauthorized
transmission of voice, data and video communications across their
land. Specifically, the landowners contend that Entergy contracted
with various third parties to carry general telecommunications via
fiber optic cables installed in its existing network, thereby
violating easements and rights-of-way obtained in order to transmit
electricity and internal communications.
The landowners moved to certify the case as a class action
under FED. R. CIV. P. 23. The district court virtually lived with
the case for several years and the proceedings before the court
were extensive. After discovery, briefing, and a certification
hearing, the district court, in a thorough and well-considered
opinion, denied the motion. We granted the landowners’ Rule 23(f)

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petition for leave to appeal. Finding no reversible error, we
AFFIRM.
I
The question before us is whether the district court, which
appears to have been extremely familiar with all facets of the
case, erred in denying class certification. The certification
inquiry is essentially a factual one, which we review only for
abuse of discretion. See Allison v. Citgo Petroleum Corp., 151
F.3d 402, 408 (5th Cir. 1998). Whether the district court applied
the correct legal standard in reaching its decision, however, is a
question that we review de novo. See id. (citing Forbush v. J.C.
Penney Co., 994 F.2d 1101, 1104 (5th Cir. 1993)). Although the
landowners insist that a number of their arguments raise legal
questions, the bulk of the district court’s analysis is fact-bound.
As such, our review is for abuse of discretion.
The landowners contend that class certification is appropriate
under all three provisions of Rule 23(b). In the alternative, they
argue that the district court should have certified a “composite
class” –- that is, it should have certified “the class under Rule
23(b)(2) on liability”, while “provid[ing] class members with Rule
23(b)(3) notice and the right to opt out on damages issues”. We
consider these contentions in turn.
First, it is clear that the district court did not err in
declining to certify a class under Rule 23(b)(1)(A). A class may
be certified under Rule 23(b)(1)(A) if the prosecution of separate

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actions by or against individual members of the class would
establish incompatible standards of conduct for the party opposing
the class. In this case, the party opposing the class –- Entergy
–- does not seek to avail itself of the safeguards of Rule
23(b)(1)(A).
Moreover, the landowners have failed to put forward any
scenario under which this litigation might establish incompatible
standards of conduct. At worst, Entergy might be found liable to
some landowners and not liable to others, forcing it to negotiate
with victorious plaintiffs for the right to continue transmitting
telecommunications over their property, or to reroute its
transmissions. Were this to happen, Entergy’s obligations to
various landowners would vary, but they would not be inconsistent.
That is, it would not be the case that Entergy could not satisfy
one judgment without contradicting the terms of another. As such,
the district court did not abuse its discretion in denying
certification under Rule 23(b)(1)(A).
Next, we turn to the district court’s denial of class
certification under Rule 23(b)(2). Rule 23(b)(2) permits
certification where “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”. Although
the focus of a Rule 23(b)(2) class action is injunctive relief,
plaintiffs may also seek monetary damages, provided they are

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“incidental” to the requested injunction. See Allison, 151 F.3d at
412. That is, the damages must be “capable of computation by means
of objective standards and not dependent in any significant way on
the intangible, subjective differences of each class member's
circumstances.” In re Monumental Life Ins. Co., 365 F.3d 408, 416
(5th Cir. 2004) (quoting Allison, 151 F.3d at 415).
In the instant case, the district court held that calculation
of damages would require examination of the peculiar circumstances
of individual landowners. The reason is intuitive: rights-of-way
over some parcels of land would fetch a higher price from telecom
companies seeking to buy access in a free market than would others.
One parcel, for instance, might be situated in a geographic “choke
point”, such that a telecom company would be forced go many miles
out of its way if that parcel proved unavailable. The owner would
therefore be able to extract a payment much higher than the per-
foot average of the entire network. Thus, his damages in a suit
for trespass would be commensurately higher. In short, the value
of the myriad easements would randomly vary in such a way as to
defy any coherent system of determining damages.
The landowners contend that, empirically, this is not the case
in Louisiana, Mississippi and Texas –- that is, that these
strategic points in the network are rare, if they exist at all.
However, they provide no evidentiary support for this claim. Thus,
we cannot say that the district court abused its discretion in

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concluding that individualized damage calculations would defeat
certification under Rule 23(b)(2).
The landowners’ argument for certification under Rule 23(b)(3)
fails for similar reasons. Rule 23(b)(3) requires that questions
common to the class predominate over individualized questions, and
that class treatment provide a superior means of adjudicating the
controversy. In its opinion, the district court cited various
factors –- including the proximate cause requirement of RICO and
the varying lengths of state statutes of limitations -- supporting
its finding that individual questions predominate over common ones.
Here again, however, the most important factor is the
necessity of individualized damage calculations. Although
“relatively few motions to certify a class fail because of
disparities in the damages suffered by the class members”, Bell
Atlantic Corp. v. AT&T Corp., 339 F.3d 294, 306 (5th Cir. 2003), we
have nonetheless noted that the lack of a suitable formula for
calculation of damages may defeat predominance. That is to say,
where the issue of damages “does not lend itself to ... mechanical
calculation, but requires separate mini-trial[s] of an
overwhelmingly large number of individual claims,” class
certification will not be appropriate. Id. (quoting Windham v.
American Brands, Inc., 565 F.2d 59, 68 (4th Cir. 1977)). Here, the
failure of predominance might be stated in a different way, that
is, the injury to the landowners varies in substantial ways,

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depending on the value, character and location of the property over
which the easement prevails.
As explained supra, the district court concluded that
geographic variations would render some parcels more valuable than
others, thus precluding any mechanical calculation of damages in
this case. The landowners dispute this conclusion, contending that
damages may be calculated based on a per-foot extrapolation of the
per-mile rate that Entergy charges telecom companies. This
argument ignores the fact that Entergy’s flat per-mile rate,
although a near-perfect proxy for the overall value of network
access, is a poor proxy for the price of gaining access to any
given parcel of land. The flat rate is, by definition, an average
of the values of many different parcels. As such, it would
necessarily yield a windfall to some landowners at the expense of
others. Thus, the district court did not abuse its discretion in
rejecting Entergy’s flat rate as a model for damages, or in denying
class certification under Rule 23(b)(3).
Finally, the landowners contend that the district court abused
its discretion in refusing to certify this case as a “composite
class”. That is to say, the district court should have certified
the liability issues for class treatment under Rule 23(b)(2), while
providing class members with notice and opt out rights under Rule
23(b)(3), thus allowing separate trials on damages issues.
Although FED. R. CIV. P. 23(c)(4) does permit a district court
to certify “a class action with respect to particular issues”, we

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have previously held that, in order to maintain a “composite class”
of the sort the landowners describe, plaintiffs must first show
that the cause of action, taken as whole, satisfies the
predominance requirement of Rule 23(b)(3). See, e.g., Castano v.
American Tobacco Co., 84 F.3d 734, 745 n.21 (5th Cir. 1996). To
hold otherwise would permit plaintiffs to evade the predominance
requirement “through the nimble use of subdivision (c)(4)”. Id.
In the instant case, the landowners seek to excise from the
class the very issue that defeats predominance under Rule 23(b)(3)
–- i.e., the assessment of injury and the calculation of damages.
Thus, the district court did not abuse its discretion in declining
to certify this case as a “composite class”.
II
For the foregoing reasons, the decision of the district court
is, in all respects,
AFFIRMED.

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