Appendix — Deposit Guaranty Nat. Bank v. Roper

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Supreme Court, U. &-

FILED

APR 18 1979

APPENDIX ICR

MICRABL RODAK, JR., CLERK

In the Supreme Court of the United States

OCTOBER TERM, 1978

No. 78-904

DEPOSIT GUARANTY NATIONAL BANK,

JACKSON, MISSISSIPPI,

Petitioner,

VS.

ROBERT L. ROPER, ET AL.,

Respondents.

On WRIT OF CERTIORARI TO THE UNITED STATES COURT

oF APPEALS FOR THE FIFTH CIRCUIT

Petition for Certiorari Filed November 29, 1978

Certiorari Granted March 5, 1979

PO St ele OORT BAS a ne

SIG TNT snsccsecaccsslieridcabedeomasiniebinarennekionsceanidlcoostansionpinnhs

Amended Class Action Complaint -..0..02................c1.00-0+

Motion for Order Determining Whether Class Action

Is to Be Maintained and for Designation of Class

UN ini cssecidnacesitieconinisknasstesthcliothamakeeiditceasnttoion

Answer of Defendants to Amend ‘Class Action Com-

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COUPONS nisi cscs es insieetestcncsesrimrennnce

Answer of Defendants to “Supplemental Complaint”

Memorandum Order

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Order Overruling Motion and Denying Class Action

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Interlocutory Order on Plaintiffs’ Motion for Summary

IN Pacis atddadeleectacdaiats aetna ac gaps sbbededecsnieistiesieas

Offer of Defendants to Enter Judgment As by Consent

and Without Waiver of Defenses or Admission of Lia-

SONI chicks sbsessomesaistisicadsephscneliinniatieeeahlaes adiatbe he tu

Exhibit A—Letter of May 13, 1976, to Federal

Court Law Clerk Dukes from Toxey Hall Smith,

5 REE Ee RRS ST SA POET MLE SPOTS Nat REP AIUGN

Order of Dismissal With Prejudice of Truth-in-Lending

RUSHERS SEA te Bt APL UME SCANS WAV Eales aE PN

Interlocutory Order on Plaintiffs’ Motion for Summary

Judgment and Defendants’ Offer to Enter Judgment

As by Consent

Plaintiffs’ Calculation of Damages

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Final Judgment on Plaintiffs’ Motion for Summary

Judgment and Defendants’ Offer of Judgment As by

Consent

FR eR eR EEE EERE E EE EEE EE EEE EEE E OREO EEE Oe ene ener ee eeeeeneeeeeeeeees

Clerk’s Receipt for Deposit ~...............-.-.-....:seceseceeeeeeeeeeeees

BUN OE FAME ncaa anf ose cce sn senenennessnsnsncesencennivtonts

Motion to Dismiss Appeal for Wani of. Jurisdiction ....

Opinion, United States Court of Appeals, Fifth Cir-

MUIR sdi.casssss has shanethccakdialeskagiipaseeeieilooeviinssdalnine telhenteinietnisiinigdetbinniions

PINES ea TSR I Sy Oe TR Bs INDIR le Cai cad (O1ARE aS BY BES ne aon

Letter of October 20, 1978, From Edward W. Wads-

worth, Clerk, to EN NSN ee

Letter to Clerk of Fifth Circuit From Vardaman S.

DOCKET ENTRIES*

[Docket 1-6]

Date Proceeding

9/17/71 Complaint, original and four copies, filed.

1i-17-71 Amended Complaint, original and four copies,

filed.

1-6—72 Motion of Bankamerica Service Corporation to

{ dismiss the Amended Complaint, with NOTICE

' that motion be heard on 1-19-72 at 9 AM, with

certificate of service and Supplemental affidavit

of D. R. McBride, with attachments, filed.

2-9-72 Motion of Jack E. Hudgins to enter appearance

by additional named party plaintiff, with cer-

tificate of service, Attorneys were notified by

Mrs. Swetman to contact Judge Nixon to arrange

for hearing date for motion, filed.

2-23-72 Motion of Robert L. Roper to amend plaintiff's

Complaint, with certificate of service, with

NOTICE iat motion be heard before Judge

Nixon on 2-23-72 at 9 AM, with attached exhibit

A, filed.

2-28-72 ORDER, dismissing as to BankAmerica Service

Corporation, Bank of America National Trust

& Savings Association, and National BankAmeri-

card, Inc. No notice thereof save the entry of

this Order being necessary, filed and entered in

OB-1972, page 221. Copies mailed to attorneys,

WLN

3-6-72 ORDER allowing amendment and plaintiff al-

lowed 10 days, filed & ent in OB 1972-page 235-A.

*Entries relating to unsubstantial matters have been omitted.

Date

3-6—72

4-21-72

10-16-72

11-10-72

11-17-72

Proceeding

Amended cormplaint, original and two (2) copies,

filed. (Ciass Action)

Motion for Order determining whether class

action is to be maintained and for designation

of class representative, with certificate of ser-

vice, filed. No notice necessary at this time

per WLN.

Memorandum Opinion and Order—1. The defts

Motion for dismissal for lack of jurisdiction is

denied. 2. Motion of deft. Bank for dismissal,

or in alternative for change of venue, is denied.

3. Deft’s Motion for Dismissal for improper

joinder of dauses [sic] of action or in alterna-

tive to strike and dismiss pltff’s second cause

of action is denied, filed and entered in OB-1972,

pages 991-993. Copies mailed to attorneys. WLN

(Copies mailed to attorneys. )

PROCEDURAL ORDER—1. Deposition of

Defts. postponed until 11-15-72 at 2 PM. 2.

Defts. not required to answer Interrogatories

heretofore filed by pltf’s until expiration of 30

days after ruling of Court on Pltf’s Motion to

proceed as class action. Defts required to an-

swer amended complaint within 10 days from

11-6-72. 4. Deft’s not required to elect whether

to request trial by jury when filing answer but

may, by notice, within 10 days after Court has

ruled on Pitf’s motion for class action, filed and

entered on OB-1972, pages 1067-1068. Copies

mailed to attorneys. WLN

Answer of Defendants to amend “Class Action

Complaint”, with certificate of service, with

Exhibit A and B, filed.

Date

4-30-73

6-13-73

8-9-73

1-7-74

Proceeding

Appearance of Robert S. Vance, Jack C. Gallalee

and Frederick G. Helmsing as counsel for palin-

tiffs [sic], with certificate of service, filed.

MEMORANDUM OPINION AND ORDER:

Ordered that pltf’s motion to maintain second

cause of action as a class action is hereby de-

nied; pltf’s motion to allow Jack Hudgins to

intervene as party pltf is granted; this Court

reserves ruling on pltf’s motion to maintain his

first cause of action as a class action until com-

pletion of additional discovery directed to is-

sues outlined herein; discovery is hereby re-

opened for this purpose and shall proceed in

accordance with F.R.C.P.; although this Court

anticipates the necessity of hearings directed to

discovery issues, each side shall submit monthly

reports by letter concerning progress of this

discovery and suggested times for submission

of supplemental briefs, filed and entered OB

1973, pages 696-701. (WLN (Copies mailed to

attorneys)

Plaintiff's motion to allow associate counsel] to

appear pro hac vice, with certificate of service,

with attached certificates of good standing of

Robert S. Vance, Jack C. Gallalee and Frederick

G. Helmsing, filed.

ORDER—plaintiffs given leave to file supple-

mental complaint seeking similar relief as orig-

inal complaint—FURTHER—Defendants move,

plead or otherwise respond to said supplemental

complaint on or before 20 days after filing of

same, filed and entered in OB-1974, page 17.

Copies to attorneys.

Date

1-15-74

2-5-74

5-6-74

7-5-74

9-3-74

9-29-75

10-15-75

Proceeding

Supplemntal complaint, with certificate of ser-

vice filed.

Ans ver of defendants to supplemental com-

plaint, with certificate of service, filed.

Motion of plaintiffs for partial summary judg-

ment, filed.

Amended Motion for partial summary judgment

as to issue of liability, with certificate of service,

filed.

ORDER—consideration by Court of motions for

partial summary judgment be abated pending

final determination of Court as to whether this

cause shall proceed as a class action under Rule

23, said abatement to be without prejudice to

right of moving parties to renotice said motions

for hearing after final determination of class

action issue before Court. Plaintiff may file a

brief on this issue on or before September 30,

1974 and defts. may file a responsive brief on

or before 14 days thereafter, filed and entered

in OB-1974, pages 888-889. Copies to attorneys.

MEMORANDUM OPINION—Order to be en-

tered, filed.

ORDER: Order Overruling Motion and Denying

Class Action Status—It is ordered that motion

of pltf and intervening pltf that this case pro-

ceed as a class be and it is hereby denied, and

this cause shall proceed in all respects upon the

indiv. complaints as in other cases, subject to

a temporary stay of proceedings as ordered be-

low. This Court being of the opinion that the

decision denying class action status in this case

Date

11-14-75

11-17-75

12-12-75

Proceeding

as evidenced by the Memorandum Opinion

dated 9-27-75, and as further evidenced by this

order, involves a controlling question of law as

to which there is substantial ground for a dif-

ference of opinion and that an immediate ap-

peal to the Court of Appeals for the Fifth Cir-

cuit may materially advance the ultimate de-

termination of the litigation; It is further

ORDERED that the order denying certification

of this case as a class action is hereby certified

for appeal pursuant to 28 U.S.C., §1292, and all

proceedings in this Court are hereby stayed for

a period of 30 days pending possible appellate

review of the said opinion and order, filed and

entered in O.B. 1975, pages 1316-1317. Copies

mailed to attys.

NOTICE OF APPEAL given that Robert L.

Roper and Jack Hudgins, on behalf of them-

selves and all others similarly situated, plain-

tiffs named above appeal to the United States

Court of Appeals for the 5th Circuit from the

Order of the United States District Court for the

Southern District of Ms. in the above-styled

cause filed and entered on on 10-15-75 in which

the Honorable Judge Nixon declined to permit

the action to proceed as a class action, Certified

copy to 5th Circuit Court.

Cash Bond in sum of $250.00, filed.

Mimeo Notice of Appeal mailed to Bobbie Price

with copies to Denten B. Jordan, Robert L.

Daniels and William A. Davis.

ORDER—From Fifth Circuit Court of Appeals—

leave to appeal from the interlocutory Order of

Date

1-16-76

3-12-76

3-17-76

5-10-76

6-1-76

Proceeding

the U. S. District Court for the Southern District

of Ms. entered on 10-14-75 is DENIED, filed and

entered in OB-1975, page 1670.

ORDER—appeal of the plaintiffs noticed under

28 U.S.C. 129], is hereby dismissed, filed and

entered in OB-1976, page 47. Copies to at-

torneys.

Motion of Plaintiffs for Summary Judgment and

attached NOTICE that motion be heard before

a Judge on 3-25-76 at 10 AM in Biloxi, Ms., with

certificate of service, filed.

Motion of defendants to strike plaintiffs’ motion

for Summary Judgment, with attached NOTICE

that motion be heard before Judge Nixon on

3-25-76 at 10 AM at Biloxi, Ms., with certificate

of service, filed.

Motion of plaintiffs for Summary Judgment, with

attached NOTICE that motion be heard before

Judge Nixon on 6-9-76 at 10 AM in Biloxi, Ms.,

with certificate of service, with attached Affi-

davit of Federal Reserve Discount Rate, with

certificate of service, with attached Affidavit

of G. Richard Thompson, Ph.D., supporting

plaintiff’s Motion for Summary Judgment, with

certificate of service, with attached exhibits,

filed.

Response of defendants to pltfs’ Motion for

Summary Judgment, with cert. of service, filed.

Offer of defendants to enter judgment as by

consent and without waiver of defenses or ad-

mission of liability, with cert. of service and

attachments, filed.

Date

6—9-—76

6-9-76

6-30-76

7-15-76

Proceeding

INTERLOCUTORY ORDER On Plaintiffs’ Mo-

tion for Summary Judgment and Defendants’

Offer to Enter Judgment as by Consent: pltfs

submit said calculation of amount for which

judgment is to be entered within 14 days from

6-9-76, filed and entered in O.B. 1976, pages

823-824. Copies mailed to attys (copy handed

to Vardeman Dunn).

ORDER: Second count of pltf’s Complaint, as

last amended, relating to the Federal Truth-in-

Lending Act is dismissed with prejudice, filed

and entered in O.B. 1976, page 836. Copies

mailed to attys.

Plaintiffs’ calculation of damages, with certif-

icate of service, filed.

FINAL JUDGMENT on Plaintiffs’ Motion for

Summary Judgment and Defendants’ Offer of

Judgment as by Consent: Pltf Robert L. Roper

recover of defts principal sum of $683.30 plus

legal interest in sum of $206.12 making total

of $889.42 for which judgment is rendered plain-

tiff Jack Hudgins recover of defts principal sum

of $322.70 plus legal interest in sum of $100.84

making total of $423.54 for which judgment is

rendered; judgment in favor of each of pltfs

bear interest at 8% per annum from its date

until paid and each of pltfs recover their costs

of Court to be taxed by the Clerk; defts may

discharge their liability by depositing sum

awarded herein with Clerk of Court and may

take Clerk’s receipt therefor, and Clerk there-

upon shall forthwith remit the amounts ad-

judged to respective parties on their request,

Date

7-15-76

7-16-76

8-10-76

Proceeding

filed and entered in O.B. 1976, page 937-938.

Copies mailed to attys.

Clerk’s Receipt for Deposit in sum of $889.42

for payment of judgment of Robert L. Roper

and sum of $423.54 for payment of judgment

of Jack Hudgins, filed.

Bill of Costs in sum of $1,427.52, filed.

Bill of Costs in sum of $419.60, filed.

Notice of Appeal given that Robert L. Roper

and Jack Hudgins, on behalf of all others sim-

ilarly situated to themselves and on whose be-

half the named plaintiffs sought class action

treatment, appeal the Judgment entered herein

on July 15, 1976, and all prior orders. A cer-

tified copy mailed to Fifth Circuit Court.

Cash Bond in sum of $250.00, filed.

Mimeo Notice of Appeal mailed to Bobbie Price

with copies to David Scott, Robert L. Daniels,

Denton B. Jordan and William A. Davis.

IN THE

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

No. 4261 (N)

ROBERT L. ROPER, on behalf of himself and all

others similarly situated,

Plaintiff,

VS.

CONSURVE, INC., d/b/a BankAmericard Center, Jackson,

Mississippi, and Deposit Guaranty National, Bank,

Jackson Mississippi, a body corporate,

Defendants.

AMENDED CLASS ACTION COMPLAINT

(Filed March 6, 1972)

Comes now the above styled Plaintiff, representative

Plaintiff, an adult resident citizen of Jackson County,

Mississippi, who files this complaint on behalf of himself

and all others similarly situated within the State of Mis-

sissippi against Deposit Guaranty National Bank of Jack-

son, Mississippi, a corporation, organized and doing busi-

ness as Deposit Guaranty National Bank of Jackson,

Mississippi, and Consurve, Inc., a wholly owned subsidiary

of the said Deposit Guaranty National Bank of Jackson,

Mississippi, service of process upon the said Deposit Guar-

anty National Bank of Jackson, Mississippi as well as the

said Consurve, Inc., may be had by service of process upon

any officer of the said Deposit Guaranty National Bank of

Jackson, Mississippi.

This cause of action arose within this District and

Division. The Plaintiff's claim arises under Title 12

USCA, Section 85 and 86 and under Section 36, Chapter 2,

Mississippi Code, 1942, as amended. This Court has juris-

diction of this cause without regard to the amount in

controversy or the citizenship of the parties under the

provisions of the Title 28, USCA, Section 1355, as well as

other sections of the United States Code. The Defendant,

The Deposit Guaranty National Bank of Jackson, Missis-

sippi, is a National Bank subject to the provisions of the

national bank act (Act June 3, 1964, c. 106, 13 stat. 99

et seq). All Defendants herein are subject to the laws

of the State of Mississippi.

The Defendant, Deposit Guaranty National Bank of

Jackson, Mississippi (hereinafter referred to as DGNB),

acts, in this jurisdiction, through Consurve, Inc., which is

a wholly owned subsidiary of the said DGNB. The Defen-

dants, and each of them, or the both of them, one acting

as a division of the other, engage in the business of ex-

tending loans and credit through the use of the credit

plan and credit card commonly referred to as “Bank-

Americard”. The Defendants furnish such cards upon

applications of persons, or, on occasions, without applica-

tions or request. In practice, the Defendants encourage

numerous merchants, dealers, professionals, etc., to sub-

scribe to their service whereby a holder of the card charges

purchases to his BankAmericard and the Defendants pay

such merchants, etc., after deducting a percentage of the

charge to the merchants as a service charge, thereafter,

the Defendants bill the card holder. If the holder fails

to pay the account promptly, the Defendants charges the

holder interest, sometimes disguised or referred as “Fi-

nance” or “Service Charges, in the amount of one and

one-half (1, 1/2%) per cent per month, (or eighteen

per cent (18%) per annum), on the unpaid balance. This

charge of interest is regularly made by the Defendants

in the course of their business.

III

Plaintiff on behalf of himself and all others similarly

situated would show unto the Court that in the regular

course of Defendants business the Defendants have will-

fully and knowingly taken, stipulated for, received, re-

served and charged interest greater than that allowed by

the laws of Mississippi, specifically section 36, Chapter 2,

Mississippi Code, 1942, as amended, which, inter alia, pro-

vides that interest on all notes, accounts and contracts

shall not exceed the rate of eight per cent (8%) per

annum and if a greater rate of interest than eight per cent

(8%) be stipulated for or received in any case, all interest

shall be forfeited, and may be recovered back, whether

the contract is executed or executory. Said interest

charged and received from Plaintiff and others similarly

situated also exceeds the rate equal to one percentum or

more to the discount rate on ninety day (90) commercial

paper in effect at the Federal Reserve Bank in the Federal

Reserve District where the Defendant, DGNB, is located.

Plaintiff, and other persons similarly situated within the

State of Mississippi, have been charged, or are being

charged, with such prohibited interest being in the amount

of one and one-half (1 1/2%) interest per month on the

unpaid balance of their accounts, or a total of eighteen

per cent (18%) interest per annum, or more, if the said

interest is compounded monthly.

This action is a Class Action provided for by rule 23

of the Federal Rules of Civil Procedure and is brought

by the named Plaintiff on his own behalf and on behalf

of all other persons similarly situated. The names, ad-

dresses, and number of similarly situated persons, being

holders of BankAmericards within the State of Mississippi

who have been charged such prohibited interest on the

unpaid balance of their accounts, are unknown to the

named Plaintiff, but are, on information and belief, averred

to be in excess of ten thousand (10,000) persons. Such

persons are known by the Defendants and may be readily

determined by records maintained by Defendants.

Claims of the Plaintiff and other persons similarly

situated in this Class Action, are practically identical and

represent substantially common questions of Law and fact.

The common question of Law is whether the Defendants

charged, or charge, or are charging, usurious interest in

violation of Title 12, USCA, Section 85, and/or Section 36,

Chapter 2, Mississippi Code, 1942, as amended. The com-

mon question of fact includes, but is not limited to, whether

Plaintiff and other similarly situated as credit card holders,

were charged, paid or billed, illegally, interest in excess

of eight per cent (8%) per annum, or otherwise, all as

set out above. The Allegations herein Represent a uniform

and regular course of conduct engaged in by the Defendants

against Plaintiff and members of the Class herein. The

questions common to Plaintiff and members of the class

predominate over any questions affecting individual mem-

bers.

A class action is a superior method for a fair and

effective adjudication of the controversy. Prosecution of

the Claims as a class action wili fairly and adequately

protect the interests of all members of the class. The

interests of the Plaintiff are identical to interests of all

persons within the class. Prosecution of separate actions

by individual members of the class would create a risk

of inconsistent or varying adjudications with respect to

the individual plaintiffs, which would thereby establish

incompatible standards of conduct for the Defendants.

Maintenance of the action on behalf of the class would,

as a practical matter, dispose of the interest of other

the expense of trial and preparation therefor which require

bringing separate actions. Plaintiff would show unto the

Court that the Federal Court is a proper and just forum

for the adjudication of the Claims of themselves and all

others similarly situated inasmuch as a class action is not

available in the state courts of the State of Mississippi;

and the nature and type of the claims of the Plaintiff

and all others similarly situated make it necessary that

they be litigated in a class action because of the individual

size thereof and the individual monetary amounts. Main-

tenance on behalf of the class would, as a practical matter,

dispose of the interests of other members of the class

not named as parties to this action and avoid the expense

of trial and preparation therefor which require bringing

separate actions.

VII

Plaintiff alleges that the Clerk of this Court be desig-

nated custodian of the funds and judgment to be paid

Plaintiff and other persons similarly situated, by Defen-

dants and the Clerk deposit said funds in a suitable

depository and, upon proper order of this Court, disburse

said funds after deduction of necessary expenses and attor-

ney fees to Plaintiff's attorneys herein of twenty-five per

cent (25%) of the amount so paid, the same being reason-

able by all standards, including that alleged and utilized

by Defendants in suing certain members in of the class

in State Courts for unpaid accounts.

Vill

SECOND CAUSE OF ACTION

And now for a Second Cause of Action Plaintiff on

behalf of himself and all others similarly situated, re-

alleges and reavers each and every, all and singular the

allegations hereinabove made and for a second cause of

action, reserving all rights and privileges, would show

unto the Court that the Defendants, DGNB and Consurve,

Inc. are liable to the members of the class for a failure

to correctly specify the annual interest rate on its open

credit extension accounts hereinabove mentioned, and

would show unto the Court the following:

Plaintiff, on behalf of himself and all other similarly

situated would show unto the Court that the Defendant

Bank and its wholly owned subsidiary, Consurve, Inc:,

have violated the disclosure requirements of the Truth-

In-Lending Act when they fail to show the proper annual

percentage rate of interest on the front and face of the

statement to the Plaintiff and all others similarly situated

under their open-end Consumer Credit Plan. Plaintiff

would show unto the Court on behalf of himself and all

others similarly situated that although the statements

furnished holders of BankAmericards on the face of them

state the interest thereto as a finance charge in conclusive

and definite terms and states no finance charge is added

to the first month or when balance is paid in full within

twenty-five days after date of statement, said disclosures

are inadequate.

Plaintiff would further show unto the Court that the

annual percentage rate as expressed on the monthly billing

statement rendered by the Defendants is not a true proper

or correct rate as charged by the Defendants. Plaintiff

would show unto the Court on behalf of himself and the

other members of the class that the actual percentage

rate charged by the Defendants varies within any given

monthly billing cycle period to such a degree that on

occasions the Defendants will be charging 1.6, 1.7 or in

some extreme cases 1.8% per month add-on percentage

rate, which is grossly in excess of 1/4 of 1% more than

1 1/2% monthly add-on.

Plaintiff would show unto the Court that the DGNB

and Consurve, Inc. are liable for violation of section 127

(B) (5) of the said Truth-In-Lending Act. Plaintiff

would show unto the Court that the Defendants conduct

is such as would preclude any “Good Faith” defense.

Plaintiff, on behalf of the Class and himself would show

unto the Court that the Defendants are in violation, there-

fore, of the Truth-In-Lending Act because, but not limited

to, they have violated the requirements of Regulation “Z”

(12 CFR 226) the same being regulations promulgated

pursuant to the Truth-In-Lending Act. Plaintiff specif-

ically charge the Defendants with violation of §226. 79 c,

and other paragraphs setting forth the requirements of

disclosure of annual percentage rate. Plaintiff alleges that

the Defendants actually charge in excess of one-fourth of

one percent, on many occasions, above the stated 18%

annual rate. Plaintiff charge Defendants with abjectly

failing to state the true annual percentage rate within the

nearest 1/4 or 1% on their statements as required by law.

DEMAND FOR JUDGMENT

WHEREFORE, Plaintiff on behalf of himself and all

others similarly situated, demands judgment of Defendants,

to wit:

1. The sum of $5,000,000.00 together with interest

according to law; or such other sum as represents the

aggregate of the following (a) Twice the amount of in-

terest paid within two years next preceding the filing of

this complaint by all members of this class; and (b) such

additional interest as has been charged to but not paid by

members of the class within two years next preceding

the filing of this complaint.

2. Any other remedies and relief afforded by the laws

of the United States or the State of Mississippi which may

be deemed appropriate by the Court.

3. Cost of this action as well as attorney fees in the

amount of 25% as hereinabove alleged, or such other

amount as may be deemed fit and proper by the Court.

4. Such other relief as the Court may deem just and

proper.

Respectfully submitted,

Robert L. Roper, on behalf of him-

self, and all others similarly sit-

uated.

By: /s/ W. R. Wilson, J.

Attorney at Law

P.O. Box 1507

Pascagoula, Mississippi, 39567

(601) 769-1247

and

Toxey Hall Smith, Jr.

Attorney at Law

Wiggins, Mississippi

(601) 928-4247

(Certificate of Service Omitted in Printing)

IN THE

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

(Title Omitted in Printing)

MOTION FOR ORDER DETERMINING WHETHER

CLASS ACTION IS TO BE MAINTAINED AND FOR

DESIGNATION OF CLASS REPRESENTATIVE

(Filed April 2, 1972)

Comes now Robert L. Roper, individually and on be-

half of all others similarly situated, and moves, under

the provisions of Rule 23 (c) (1) for an order determining

whether this action is to be maintained as a class action

and for designation as class representative and for other

relief specified in said Rule.

Respectfully submitted,

Robert L. Roper, Behalf of Himself

and all others similarly situated

By /s/Toxey H. Smith, Jr.

Attorney at Law

P. O. Drawer 8

Wiggins, Mississippi 39577

and

W. Robert Wilson, Jr.

Attorney at Law

3132 Canty Street, P.O. Box 1507

Pascagoula, Mississippi 39567

(Certificate of Service Omitted in Printing)

IN THE

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

(Title Omitted in Printing)

ANSWER OF DEFENDANTS TO AMEND

“CLASS ACTION COMPLAINT”

(Filed November 17, 1972)

Now come the Defendants, Consurve, Inc., d/b/a Bank-

Americard Center, and Deposit Guaranty National Bank,

and for answer to the Amended “Class Action Complaint”

say:

First Defense

Answering specifically the allegations of the Amended

Complaint, Defendants say:

1. They admit that the Deposit Guaranty National

Bank is a national bank subject to the provisions of the

National Bank Act. They deny that the Court has juris-

diction of the parties or subject matter, there being no

diversity of citizenship and the amount involved being

less than the jurisdictional minimum. They deny that

the Court has venue.

2. They deny the allegations of Paragraph II except

that they admit that Consurve, Inc. is a wholly owned

subsidiary of Deposit Guaranty National Bank, and, further

answering, would explain that charges are made to some

of the merchants who subscribe to the BankAmericard

service, said charges being in various amounts based on

volume and ranging from 0 to 5%; and finance charges

are made to consumer customers in varying amounts under

varying circumstances, with each account being different,

depending upon numerous variables.

3. They deny the allegations of Paragraph III and

would show that there are several statutes of the State

of Mississippi dealing with permissible interest or finance

charges including Chapter 662, Mississippi Laws of 1972,

specifically authorizing charges of 114% per month on

revolving charge accounts such as the accounts involved

herein.

4. They deny the allegations of Paragraph IV, except

they admit that the holders of BankAmericard Credit

Cards within the State of Mississippi exceed 10,000 and,

in fact, equal approximately 90,000.

5. They deny the allegations of Paragraph V.

6. They deny the allegations of Paragraph VI.

7. They deny the allegations of Paragraph VII.

[Answer to “Second Cause of Action’’]

8. They deny the allegations of Paragraph VIII.

9. They deny the allegations of Paragraph IX.

10. They deny the allegations of Paragraph X.

Second Defense

If the Plaintiff otherwise would have a cause of action

based on the charge of usury, which is denied, the Plain-

tiff is nevertheless barred by waiver and res judicata,

and in support of this defense, Defendants would show:

In February of 1971, Consurve, Inc. filed an action

in the County Court of Jackson County, Mississippi, being

No. 12,033 on the docket of that Court against Robert L.

Roper seeking recovery for the balance due on his Bank-

Americard Charge Account, plus attorney’s fees. Robert

L. Roper was duly served with a summons issued out of

said Court to answer the declaration therein, but after

entering an appearance, suffered default and failed to

interpose a plea, defense or assertion of usury. A judg-

ment was duly entered against Robert L. Roper in said

cause in favor of Consurve, Inc. in the total amount of

$2,782.94, plus Court Costs, and said Judgment having

been rendered by a court of competent jurisdiction, be-

came and is a final Judgment and entitled as such to full

faith and credit. A true copy of the official Record in

said Cause No. 12,033 is attached hereto as Exhibit A and

incorporated herein by reference.

If usury occurred in reference to the account of Robert

L. Roper, which is denied, such was merged into the

Judgment in said Cause No. 12,033.

Plaintiff's complaint in this cause amounts to a col-

lateral attack on the final Judgment of the County Court

of Jackson County, Mississippi, in said Cause No. 12,033

and as such, fails to state a claim on which relief can

be granted.

Third Defense

As an additional defense to Plaintiff's “Second Cause

of Action”, Defendants plead that the action is barred

by the applicable statute of limitations and herein would

show:

Plaintiff's “Second Cause of Action” alleges violation

of a Federal Statute known as the Federal Truth-In-

Lending Act, 15 U.S.C. 1640, and Subdivision (e) of said

Act provides in pertinent part that: “Any action under

this section may be brought .. . . within one year from

the date of the occurrence of the violation.”

Plaintiff's “Second Cause of Action” was not filed until

March 6, 1972, when it was incorporated in the Plaintiff's

“Amended Class Action Complaint” pursuant to leave

granted on a motion for leave to amend filed February 23,

1972; but the last use made by Plaintiff of his Bank-

Americard account occurred more than one year prior to

the last above mentioned date and is, therefore, barred

under the provisions of 15 U.S.C. 1640 (e).

Fourth Defense

Defendants deny that this cause should be allowed to

proceed as a class action under Rule 23 of the Federal

Rules of Civil Procedure or otherwise, but if the action

is allowed to so proceed, Defendants reserve the right to

defend and answer each and every claim which may

thereby be brought into litigation herein, including the

right as to each and all of such claims to interpose appro-

priate pleas of setoff and counterclaim.

SETOFF AND COUNTERCLAIM

Defendants aver that the Plaintiff, Robert L. Roper,

is indebted to the Defendant, Deposit Guaranty National

Bank, in the sum of $2,812.44 as of April 14, 1971, which

said indebtedness arises from the use by Plaintiff of a

BankAmericard Credit Card and which indebtedness is

evidenced by and merged into a final Judgment of the

County Court of Jackson County, Mississippi, Exhibit A

to this Answer, and if the Defendant is found to be liable

to the Plaintiff, Defendants demand the right of setoff

and aver that they are entitled to have the indebtedness

aforesaid credited thereon.

ANSWER TO DEMAND FOR JUDGMENT

Defendants deny that Plaintiff is entitled to the relief

demanded in his “Amended Class Action Complaint’, and

again deny that this action can properly be given the

status of a class action under Rule 23 of the Federal Rules

of Civil Procedure or otherwise.

Respectfully submitted,

/s/ Vardaman S. Dunn

1741 Deposit Guaranty Bank Bldg.

Jackson, Mississippi

Attorney for Defendants, Consurve,

Inc. and Deposit Guaranty Na-

tional Bank

Of Counsel:

Cox & Dunn, Ltd.

1741 Deposit Guaranty Bank Building

Jackson, Mississippi

(Certificate of Service Omitted in Printing)

(Exhibits Omitted As Irrelevant to Issue)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

(Title Omitted in Printing)

SUPPLEMENTAL COMPLAINT

(Filed January 15, 1974)

COME NOW, the Plaintiffs, Robert L. Roper and Jack

Hudgins, on behalf of themselves and all others similarly

situated, and file this Supplemental Complaint and for

cause of action would show unto the Court the following

facts, to-wit:

Plaintiffs reallege and reaver, each and every, all and

singular, every allegation of the original and amended

complaints and incorporate the same herein by reference

as if fully copied in words and figures herein.

II.

The named Plaintiffs on behalf of themselves and all

others similarly situated, would show unto the Court that

the Defendants, Consurve, Inc. and Deposit Guaranty Na-

tional Bank, have continued to exact interest in the same

manner, style and fashion as alleged in the preceding com-

plaints and that they have continued to do so from the

date of the filing of the original lawsuit down to, until,

and inculding the present, and that the named Plaintiffs

on behalf of themselves and the class would show unto

the Court that the same relief prayed for and sought

in the original and amended complaints should and ought

to be granted to them and the class for the period between

the filing of the lawsuit and the date of the filing of the

supplemental complaint, all as provided for by law.

WHEREFORE, PREMISES CONSIDERED, Plaintiffs

sue and demand judgment on behalf of themselves and

all others similarly situated in the same manner, style

and fashion as sought in the original complaint and

amended complaints for a supplemental period including

the period from the date of the filing of the original law-

suit down to the date of the filing hereof, and Plaintiffs

sue and demand damages for themselves and the class in

double the amount of interest exacted from them and the

class from the time of the filing of the original lawsuit

down to, until and including the date of the filing of this

supplemental complaint, and Plaintiffs pray on behalf of

themselves and all others similarly situated that the in-

terest charged but not yet collected be forfeited, and;

PLAINTIFFS PRAY that this Honorable Court set a

reasonable attorneys fee out of the award to the class as

the Court may deem fit and proper, and;

PLAINTIFFS RENEW THEIR DEMAND FOR JUDG-

MENT as set forth in the original complaint and the

amended complaints filed subsequent thereto, in addition

to the relief sought and demanded in this supplemental

complaint.

Respectfully submitted,

Robert L. Roper and Jack Hudgins

By: /s/ Toxey Hall Smith, Jr.

Attorney at Law

114 Cavers Street

Wiggins, Mississippi

(601) 928-3222

and

W. Roberts Wilson, Jr.

Attorney at Law

P. O. Box 1507

Pascagoula, Mississippi 39567

(601) 769-1247

(Of Counsel, Robert Vance, Fred-

rick Helmsing and Jack Gallalee)

By: /s/ Roberts Wilson, Jr.

Of Counsel

(Certificate of Service Omitted in Printing)

IN THE

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

(Title Omitted in Printing)

ANSWER OF DEFENDANTS TO

“SUPPLEMENTAL COMPLAINT”’

(Filed February 5, 1974)

Without waiver of objections to jurisdiction or venue,

and without waiver of the objections to the maintenance

of this suit as a “class action”, defendants answer the

Supplemental Complaint as follows:

FIRST DEFENSE

The Supplemental Complaint fails to state a claim

against defendants upon which relief can be granted.

SECOND DEFENSE

Neither the original plaintiff, Robert L. Roper, nor

the intervening complainant, Jack Hudgins, has standing

to maintain the alleged cause of action set forth in the

Supplemental Complaint for the reason that neither the

original plaintiff nor the intervening plaintiff has trans-

acted any credit card business with defendants since the

filing of the Amended Complaint in this cause on March 6,

1972, and neither the original plaintiff nor the intervening

plaintiff held a credit card during said period of time

encompassed by the Supplemental Complaint.

THIRD DEFENSE

Defendants deny that this cause should be allowed

to proceed as a class action under Rule 23 of the Federal

Rules of Civil Procedure, or otherwise, but if the action

is allowed to proceed under the Supplemental Complaint,

defendants reserve the right to defend and answer each

and every claim which may thereby be brought into litiga-

tion herein, including, as to each and all of such claims,

the right to interpose appropriate pleas of set-off and

counterclaim and to have all issues heard by a jury.

FOURTH DEFENSE

Answering specifically the allegations of the Supple-

mental Complaint, defendants say:

1, Paragraph number 1 of the Supplemental Com-

plaint re-alleges and re-avers each and every and all and

singular every allegation of the original and amended

complaints and incorporates the same by reference; and

in answer to this paragraph defendants re-allege and re-

aver each and every, all and singular, every allegation,

admission and denial of their answers to the original and

amended complaints and incorporate the same herein by

reference as if fully copied in words and figures herein;

and defendants further incorporate as a part of their an-

swer all of the motions, pleas and objections heretofore

filed in this cause and by reference make the same fully

applicable to the Supplemental Complaint as if re-filed

with this answer.

2. Answering paragraph 2, they admit that Deposit

Guaranty National Bank has continued to do business

under its credit card program in generally a similar

manner, style and fashion as its business was conducted

pric: te the date of the filing of the last amended com-

plaint herein, but they deny all of the remaining allega-

tions of this paragraph of the Supplemental Complaint.

SET-OFF AND COUNTERCLAIM

As a part of the answer to the Supplemental Com-

plaint defendants re-assert the set-off and counterclaim

as incorporated in the answer of defendants to the amended

“class action complaint.”

ANSWER TO DEMAND FOR JUDGMENT

Defendants deny that plaintiffs are entitled to the

relief demanded in the “Supplemental Complaint” and

again deny that this action can properly be given the

status of a class action under Rule 23 of the Federal Rules

of Civil Procedure, or otherwise.

Respectfully submitted,

/s/ Vardaman S. Dunn

Attorney for Defendants

Of counsel:

Cox & Dunn, Ltd.

Post Office Box 1046

Jackson, Mississippi 39205

(Certificate of Service Omitted in Printing)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

(Title Omitted in Printing)

MEMORANDUM ORDER

(Filed September 29, 1975)

The original plaintiff, Robert L. Roper, and the inter-

vening plaintiff, Jack E. Hudgins, former customers and

“Bankamericard” card holders of the defendant, Deposit

Guaranty National Bank of Jackson, Mississippi, brought

this suit against the defendants on behalf of themselves

and other Bankamericard card holders of the defendants.

It was designated as a class action under Rule 23, Federal

Rules of Civil Procedure, and although it named both of

the above defendants, the real party in interest is Deposit

Guaranty National Bank (Bank).

The Complaint sets forth two causes of action, the first

of which alleges violations of the sections of the National

Banking Act dealing with interest charges and penalties

for exacting usury, 12 U.S.C. §§85 and 86; the second cause

of action is based upon alleged violations of the federal

Truth-in-Lending Act, 15 U.S.C. §1601, et seq.

The violations of law for which this action was brought

were alleged to have been committed by the Bank in the

administration of its credit card program known as “Bank-

americard”, which was inaugurated in 1968 and which

developed between 90,000 and 100,000 individual credit

card accounts.

Plaintiffs seek to qualify and act as class representa-

tives for all Bankamericard credit card holders whose

accounts were active within the four year period covered

by the original and supplemental complaints filed herein,

or from September 18, 1969 until September 19, 1973. It

is conceded by both sides that there were 90,000 or more

card holders during this period of time. Furthermore, it

is agreed that the defendant Bank is subject to the provi-

sions of the National Bank Act of June 3, 1964, c. 106, 12

Stat 99 (Tit. 12 U.S.C. §1 ff).

This cause is now before the Court on the motion of

the plaintiff for an order certifying this as a class action

and for designation of a class representative. This Court

initially found that neither the plaintiffs’ first nor second

cause of action could be maintained as a class action under

Rule 23 and ordered that the motion to maintain the

second cause of action based upon an alleged violation of

the Truth-in-Lending Act as a class action be denied but

reserved final decision on the class action question as

related to the usury issue until the record was fully de-

veloped on the question of the over-all manageability of

the case as a class action.

The parties have fully utilized all desired discovery,

including taking of depositions, and have filed herein

additional affidavits. These have been considered along

with the evidence previously submitted, end in addition,

the Court and counsel have engaged in several conferences

following which both sides have submitted excellent briefs

and have orally argued all facets of this matter.

The Court is now called upon to determine whether

the conditions of Rule 23 have been met, including whether

a class action under the circumstances of this case is

superior to other available methods for the fair and effi-

cient adjudication of this controversy which must be re-

solved by the exercise of an informed and sound discretion

within the guidelines of the rule and cases construing it,

taking due care in the process to avoid encroaching upon

the substantive law of the forum to the extent that it

applies to the case sub judice and has not been pre-empted

by federal law.

Before proceeding to decide this class action question,

the Court notes that the merit issues herein include

whether the so-called service charge is subject to Missis-

sippi statutes on usury; what rate of interest is allowable

on loans of credit; whether the effective rate actually paid

in any given case is to be determined on a daily, monthly

or other basis; and whether the rate so determined was

exceeded in any given individual case. The Court may

not proceed to decide these issues as long as the class action

status of this case remains unanswered, because no merits

determination of fact or law can be made without due

process notice to all identifiable members of the proposed

class, if this is determined to be a proper class action.

Eisen v. Carlisle & Jacquelin, 94 S.Ct. 2140; 417 U.S. 156

(1974); Miller v. Mackey International, 452 F.2d 424 (5th

Cir. 1971).

A modern credit card system such as the Bankamer-

icard system is made possible by the utilization of computer

technology. Individual customers apply to a participating

bank which is part of the Bankamericard system for the

extension of credit by the issuance to the applying cus-

tomer of a credit card. The bank also makes contracts

with merchants and vendors of goods and services. A card

holder may purchase goods or services from any partic-

ipating merchant or various member establishments any-

where in the world and charge his purchase on his credit

card.

After an individual holder of a card issued by this

defendant charges goods or merchandise, his charge ticket

is deposited by the selling merchant at the bank with

which such merchant has contracted and the latter is given

credit to its account for the amount of the charge ticket

less an agreed discount. If the bank is one other than

the defendant, the ticket is transmitted through normal

banking channels to the defendant: and appropriate funds

or credits are transferrei by it to the transmitting bank.

When the ticket reaches the defendant Bank, it is fed into

its computer and is thereby charged to the card holder’s

account.

Once the purchase is made the customer is granted

several choices or options. The customer determines the

timing of his purchases or borrowings. If he is billed at

the end of each month, a purchase made near the first

of the month is not billed for almost thirty days. When

he receives the billing, he may wait thirty additional days

to pay without incurring any service charge and about

35% of the bank’s customers do not incur any service

charge at all. In any event, there is no service charge

for the period from the date of purchase to a date which

is thirty (30) days after the initial billing, which allows

a free credit use period of up to approximately sixty (60)

days, depending on the timing of the purchase in relation

to the billing date. In many instances, delayed deposits

of charge drafts by the merchants can extend this free

time up to ninety (90) days. If the customer does not

choose in any given month to pay that month’s billing in

full at the end of thirty days after billing, he may elect

to pay in installments, and it is within his discretion to

determine the amount of the first payment, subject to a

minimum requirement. He may pay the minimum ($10.00

or 5%) or any amount between 5% and 100% and vary

this at will from month to month. A service charge is

then applied on the remaining balance and it appears on

the next billing. Different customers have different pay-

ing preferences and the preferences may be changed and

varied at the option of the customer provided the payments

do not fall below the minimum required.

On the date appointed for billing of a particular card

holder’s account, the computer is programmed to add

charges, subtract credits, add any finance charge due under

the defendant’s contract with the customer and generate

a statement reflecting all such transactions. This state-

ment, together with all of the customer’s charge tickets

which have accumulated since his last billing are then

mailed to him. The data which the computer tapes con-

tain are updated from period to period as the process goes

on. Transaction data is not permanently retained on the

magnetic tapes. Data is printed and retained in the form

of “printouts” which are generated many times throughout

a billing cycle and on microfilm which is made of all

charge tickets, credit transactions and statements.

From the procedure outlined above, it is apparent

that the effective rate of service charges actually paid will

vary from one account to another and within each account

from month to month or from time to time. Indeed, the

witness called by plaintiff as an expert admitted that in

view of these options and variables, the effective rate paid

would vary from month to month and from day to day

and there would be some periods where the effective rate

paid would be above and some where it would be below

even 8% simple interest. To determine this crucial ques-

tion of the effective rate actually paid, a reconstruction

of each account, either totally or in some substantial

respect, would be necessary before the Court or a jury

could determine either liability or amount.

The cost of researching and reconstructing 90,000 ac-

counts, each involving numerous transactions, from micro-

film records, is the subject of estimates which vary widely,

due in some part to disagreement as to the extent of the

reconstruction required and the method to be used, but

in any event, the cost in time and money is very sub-

stantial, ranging from $367,700.00 to over $3,432,000.00 to

cover the four year period.

Even preliminary to this endeavor is the matter of

giving notice to at least 90,000 potential class plaintiffs,

the cost of which is also substantial.

Another facet of the case has to do with the ability

of potential class member plaintiffs to secure relief, if any

is due, outside of the class action arena. Pertinent to this

question is the fact that Mississippi provides small claims

courts conveniently throughout the state which handle a

multitude of small claims such as those which might arise

from usury. The amount of individual claims over the

four year suit period will, of course, vary, but if usury

has been committed, as the plaintiff claims, in respect to

all finance charges at the rate of 18% per annum, most,

if not all individual claims would be substantial. With

claims outgrowing from accounts with average balances

of $100.00 to $1,000.00, the ad damnum at 18% per annum

(doubled) would range from a low of $144.00 to a high

of $2,880.00, plus pre-judgment legal interest, and fall

within the jurisdiction of justice courts, county courts and

circuit courts, depending upon amounts. Many lawyers

throughout the state habitually handle cases in this range.

Unlike the highly complex anti-trust cases which have

found more than average favor as class actions, there is

nothing unduly complex involved in prosecuting actions

based on claims for usury. If a case has merit, both client

and lawyer make recoveries adequate to justify litigation

on an individual case basis. On an equal division arrange-

ment, the client still recovers all interest paid, plus legal

interest from the date paid. The lawyer recovers a like

amount for his services, because of the 100% penalty

which is mandatory in all usury recoveries against national

banks.

Against this factual background, the Court will pro-

ceed to a discussion of the reasons which have influenced

the Court’s decision to reject the use of the class action

device under Rule 23 in this case.

Under Rule 23, the Court must first determine whether

the prerequisites of subpart (a) have been met and ad-

ditionally whether at least one of the three provisions

of subpart (b) is applicable. In reaching a conclusion,

the Court adopted a pragmatic approach in an earnest

effort to balance the spirit of the Rule with fundamental

rights and traditional notions of fair play and equal justice

for all alike.

The burden of proof and of persuasion rests through-

out upon the plaintiff who seeks to represent a class of

numerous individuals. Poindexter v. Teubert, 462 F.2d

1096 (CA4, 1972); Rossin v. Southern Union Gas Co., 472

F.2d 707 (CA10, 1973). The broad terms of Rule 23 have

been recognized as calling for the exercise of some con-

‘siderable discretion of a pragmatic nature. Ratner v.

Chemical Bank New York Trust Co., 54 F.R.D. 412 (S.D.

N.Y. 1972). See also: Shumate & Co. v. National Assn.

of Securities Dealers, 509 F.2d 147 (CA5, 1975).

Speaking for the Court in Eisen III (Eisen v. Carlisle

& Jacquelin, 479 F.2d 1005 (CA2, 1973)), Judge Medina

observed that “[c]lass actions have sprouted and multi-

plied like the leaves of the green bay tree’”’ and the blame

is placed in part upon the “erroneous and frustrating view”

that some way “must” be found to entertain the case as

aclass action. There is no compulsion written into Rule 23.

On the contrary, the compulsion is to search the facts

of each case to determine whether justice to all and the

efficient administration of justice will best be served by

the use of such a device in the circumstances of the par-

ticular case at hand.

In this connection, it is not irrelevant to consider who

is to benefit and who is to suffer and how and to what

extent.

Another consideration is the effect of the class action

device on the defendant who finds himself suddenly con-

fronted with thousands of lawsuits, all built into one, and

who is faced with claims for damages and penalties reach-

ing astronomical amounts, in this case $14,000,000.00, of

which one-half is a statutory penalty,—enough to seriously

endanger if not to destroy the very solvency of the bank.

The threat implicit in this situation has been referred to

as “legalized blackmail.” Eisen III, 479 F.2d at 1019.

Other courts have placed emphasis upon the undesir-

able “horrendous penalty” that can be generated by the

pursuit of class actions to recover damages and penalties.

Cf. Ratner v. Cheinical Bank New York Trust Co., 54 F.R.D.

412 (S.D. N.Y.) 1972); Rogers v. Coburn Finance Corp., 54

F.R.D. 417 (N.D. Ga. 1972); Gerlach v. Allstate Ins. Co.,

338 F.Supp. 642 (S.D. Fla. 1972). When suffering on one

side is intense and the benefit on the other is minimal, if

any, the Court must proceed with due caution to avoid

an injustice, especially when it appears, as here, that each

individual who may have an interest is free and able to

pursue his own remedy.

In sum, the allowance of class action status in this

case will threaten the defendant with a horrendous penalty,

and will benefit individual customers little, if at all. On

the other hand, to deny the motion will harm no one

who sincerely desires to prosecute a claim against the bank,

because the statute of limitations has been suspended

(American Pipe and Corst. Co. v. Utah), 94 S.Ct. 756, 414

U.S. 538 (1974)), and everyone has a forum available for

prosecution of his claim in the traditional manner.

This brings the Court to the question of whether the

case is manageable as a class action and the related ques-

tion of whether common questions predominate.

One directive of Rule 23 is that the Court evaluate

“the difficulties likely to be encountered in the manage-

ment of a class action.” Commentins upon the quoted

directive the Supreme Court in its review of Eisen III

(Eisen v. Carlisle and Jacquelin, 94 S.Ct. 2140, 417 USS.

156 (1974)) said:

. . . Commonly referred to as ‘manageability,’

this consideration encompasses the whole range of

practical problems that may render the class action

format inappropriate for a particular suit... .” (94

S.Ct. at 2146, 417 U.S. at 164).

The Eisen cases, both Eisen II and Eisen III, include

one admonition which deserves threshold emphasis. Judge

Lumbard, in his dissenting opinion in Eisen II (Eisen v.

Carlisle and Jacquelin, 391 F.2d 555 (CA2 1968)), ob-

served:

. . Rule 23 does not require or contemplate

that courts will hear causes of action as class actions

merely because they will not get to hear the case

any other way....” (391 F.2d at 572).

The majority in its opinion in Eisen III (Eisen v.

Carlisle and Jacquelin, 479 F.2d 1005 (CA2 1973) ) sounded

the same note with the observation:

‘“. . Much of this time was devoted to an effort

by Eisen’s counsel to meet the apparently insurmount-

able difficulties of notice and manageability by adopt-

ing the erroneous and frustrating view that some way

must be found to make the case viable as a class

action... .” (479 F.2d at 1008).

In its review of Eisen III, the Supreme Court of the

United States indicated no disagreement whatever with

the stated truism. Moreover, this series of decisions, in-

cluding that of the Supreme Court of the United States,

makes it clear that in making the determination of the

lack of manageability and superiority and of other neces-

sary prerequisites to the class action approach, the so-

called “class” does not ever become a legal entity or a

litigant apart from the individual members of the class.

In short, even if the present action wears the cloak of

a class action, the individuals composing the class still

must be dealt with as individuals and each individual’s

case must stand or fall upon its own merits.

As a predicate for developing the testimony of the

witness offered by plaintiff as a computer expert, the

plaintiff’s ultimate contention or theory of the case was

stated into the record as follows:

“c

. . . The contention is that the only relevant

factors in computing the refund are the amount of

service charges or finance charges billed during the

suit period and the amount paid during the suit

period.” (Copeland dep., p. 46).

Looking solely to these factors asserted as the “only

relevant factors,” plaintiff would limit the case in its first

stage to a computation of the dollars paid by all credit

card customers in response to service charges for the suit

period (initially 24 months but expanded by supplemen’

complaint to four years). The total of all service charges

for all accounts for the four year period, fairly estimated

at $7,000,000.00, would then be multiplied by twe *> create

a $14,000,000.00 “fund” which which the bank would be

expected to pay into Court or disburse as directed, after,

of course deducting attorneys’ fees to plaintiff’s counsel

and other expenses incurred in administration of the case.

In phase two, a calculation of dollars paid during the suit

period by each customer is contemplated and the amount,

after deducting attorneys’ fees and expenses, prorated in

some fashion not explained, would then be automatically

disbursed. All of this, according to the plaintiff, is to be

done by devising new programs for the bank’s computers.

One trouble with the plaintiff's approach thus far is

that there is and can be no cause of action for recovery

of interest charged but only for recovery of interest paid.

In order to amount to actionable usury, the dollars paid

must convert into an effective percentage rate which ex-

ceeds the maximum per annum percentage rate found to

be allowed by the law. In this case, the dollar amount

charged or paid may or may not convert into an effective

percentage rate in excess of the rate found to be allowed

by law, depending upon the rate charges in relation to

the time the transactional credit is used by the borrower

or customer.

The alternative is to examine and reconstruct each

card holder account, which cannot be done without exam-

ining each transaction from the microfilm records and

either producing copies of each document involved or key-

punching the detailed information therefrom into a re-

programmed computer system, the cost and time for which

varies from several hundred thousand to several million

dollars.

This case is different from one where liability can be

shown as to all class members, with only the amount of

damages to be determined as to each. Shumate & Co.

v. Nat. Assn. of Security Dealers, 509 F.2d 147 (CA5, 1975).

This Court rejects plaintiff's contrary premise and

finds as a fact that each account would have to be recon-

structed and individually examined in order to determine

liability on the charge of usury as well as the amount in

case liability were found to exist. In other words, the

Court would be faced with some 90,000 separate cases for

trial, possibly by jury, on issues first of liability and then

on damages, and there is no way that the defendant may

be computerized into mass liability or mass damages in

the circumstances of this case. In addition, there are some

11,000 delinquent accounts involved, which would or could

become counterclaims and require adjudication, Issues of

fact affecting only individual members of the class clearly

predominate.

The possibility that the defendant, faced with the

enormous task of defending these thousands of claims,

might be pressured into a compromise settlement or even

a compromise on procedure to minimize the enormous cost

and disruption of its normal business functions is not a

result to be either forced or applauded by this Court. Nor

is the Court called upon to run the substantial risk of

another Eisen “Frankenstein monster posing as a class

action.” (Eisen II, 391 F.2d at 572; Eisen III, 94 S.Ct. at

2148, 417 U.S. at 169).

Since the plaintiffs seek to represent a class of individ-

uals who are strangers and who have no voice in the

selection of a class champion, the Court is obliged to look

closely to the ability of the plaintiffs to adequately repre-

sent the class. It is not enough that competent lawyers

have committed themselves to the legal representation,

although the existence of competent counsel is certainly a

prerequisite to adequate representation. In the instant

case, the Court is concerned that the stake of the nominal

plaintiffs is smail and there is no showing that they are

either willing or able to finance the litigation as a class

action. At the very least, a large sum must be committed

at the front end of a class action approach to provide the

notice to the class members which due process requires.

Eisen v. Carlisle & Jacquelin, 94 S.Ct. 2140, 417 U.S. 156

(1974). The postage alone on 90,000 notices would equal

$9,000.00 and the cost of labor and supplies would be

quite substantial, and this is only the beginning of economic

problems which would plague the case as a class action

requiring reconstruction in some form of 90,000 odd ac-

counts over a four year period.

At a conference with the Court, the lawyers for the

nominal plaintiffs indicated a willingness to advance the

cost of the notice and look to their clients for repayment

if the case were lost, but to expect the Court to assume

that the nominal plaintiff, with very little involved, would

be willing or expected to discharge the client’s liability

to reimburse the attorneys is too much. This may be to

prefer rich representatives to poor ones, but in this type

of case there is no compulsion that there be a representa-

tive at all and if there is to be one, he must have the

ability, economic and otherwise, to serve in his self-

appointed position. Cf. P.D.Q. Inc. of Miami v. Nissan

Motor Corporation In U.S.A., 61 F.R.D. 372 (S.D. Fla.

1973), and Sayre v. Abraham Lincoln Federal Savings &

Loan Assn., 65 F.R.D. 379 (E.D. Pa. 1974).

Finally, the Court must determine whether the pro-

cedural device, if applied in the circumstances of this case,

would do violence to the substantive law made applicable

to claims for the penalty of usury by state statutes and

decisions, because Rule 23, like the other federal rules of

civil procedure, may not abridge, enlarge or modify any

substantive right. 28 U.S.C. §2072. As pointed out in

Eisen v. Carlisle & Jacquelin, 479 F.2d 1005, 1014 (CA2

1973):

“,.. Amended Rule 23 was not intended to affect

the substantive rights of the parties to any litigation.

Nor could it do so as the Enabling Act that authorizes

the Supreme Court to promulgate the Federal Rules

of Civil Procedure provides that ‘such rules shall not

abridge, enlarge or modify any substantive right.’ ”

(28 U.S.C §2072).

Generally, the receipt of interest for the loan of credit

is not inherently evil. The common law did not condemn

the practice or limit the amount. 55 Am. Jur. 324; §3.

Usury laws derived from the efforts of local lawmakers

to strike a balance of fairness to lenders and borrowers

alike, having due regard to the economic necessities in the

particular locality involved. The right of the states to

legislate and formulate public policy in this area cannot

be disputed and the right to legislate and determine policy

includes the incidental right to condition or limit enforce-

ment of enacted usury laws expressly and by a judicial

policy determination.

If Mississippi has an ascertainable policy for deter-

mining what is or is not a “fair” method for adjudicating

the extent of the accountability of lenders who are alleged

to have received excessive interest under state law, then

that policy cannot be ignored either as substantive law

or as bearirg upon the question of whether a Rule 23

aggregation against the lender is superior for the required

“fair” adjudication of the controversy."

1. An overwhelming number of courts have ruled against

requested spurious class action treatment of Truth-in-Lending

actions. See Katz v. Carte Blanche Corp., 496 F.2d 747 (CA3),

cert. den. 419 U.S. 885 (1974). One reason is that the policy

underlying tne law is inconsistent with an aggregation of claims

to produce excessive penalties. Analogizing, this Court perceives

no good reason why like respect should not be accorded to state

policy where state laws are invoked as a basis for recovery.

ecw

pe a

The Court concludes that under the substantive law

of Mississippi, claims for usury are currently viewed as

actions for a penalty and are strictly personal to the bor-

rower and that the action may not be maintained by

anyone except the borrower or his legal representative

in the traditional sense and that the claim is not subject

to assignment to another for collection or otherwise. Spe-

cifically, Mississippi law denounces the aggregation of indi-

vidual usury claims as a “legal fraud” upon, and therefore

as being unfair to the lender.

The aggregation of usury claims is against public policy

in Mississippi and is stoutly condemned by its case law.’

A leading case is Fry v. Layton, 191 Miss. 17, 2 So.2d 561,

134 A.L.R. 1330 (1941).

In this case the plaintiff, Fry, was a customer of and

borrower from the defendant Layton, who was in the small

loan business. He filed a suit seeking recovery for usury

paid on his own loan and for that paid by eighteen other

customers similarly situated who had assigned their claim

to him. The Court held that Fry could not recover usury

paid as assignee of others similarly situated. This was

not grounded on procedure but upon the substantive policy

and law of Mississippi as it relates to usury actions. The

Court said:

“As was said by this Court in Byrd et al v.

Newcomb Mill & Lbr. Co., 118 Miss. 179, 79 So. 100,

101: ‘The statute protects and safeguards the bor-

rower by penalizing sharply the lender in the usurious

contract; but it was not meant to give to the borrower

any unjust advantage of the lender. Its good purpose

2. There is a sharp conflict of authority on the question of

whether an action for usury is exclusively personal and nonas-

signabie, but Mississippi takes a positive stand on the point. See

Anno. 82 A.L.R. 1008 and 134 A.L.R. 1335.

shouid not be perverted into a source of legal fraud

by borrowers upon lenders.’ ”

The Court concluded:

“We hold that appellee, as assignee, cannot recover

on these claims, but since he appears to have been the

borrower upon two of them, the case is reversed and

remanded.” (2 So.2d at 565).

See also: Liddell v. Litton Systems, Inc., 300 So.2d 455

(1974), citing and following Fry v. Layton, supra, wherein

the Court said:

“This Court has held that the forfeiture provisions

of the usury laws are highly penal in nature and must

be strictly construed. (Citing cases).” (300 So.2d at

456).

There is nothing contra in the National Banking Act.

The federal law fixes no interest rate limits apart from

local law and condemns no usury apart from state law.

The federal statutes reach only to the point of assuring

that national banks are not treated less favorably than

state banks or other competitive lenders in the interest

charge area and of limiting the penalty for violating state

usury laws, in any event, to double the amount of interest

actually paid. Indeed, like Mississippi, the National Bank-

ing Act expressly limits the right to sue for usury to “the

person by whom it has been paid or his legal representa-

tive,” 12 U.S.C. 86, again leaving to state law the question

of who is a “legal representative” who may maintain such

an action. See Louisville Trust Co. v. Kentucky National

Bank, 87 Fed. 143 (D. Ky. 1898), and cases annotated to

28 U.S.C. §86. State laws differ as to the definition of a

“legal representative”, but Mississippi happens to limit the

term to exclude even voluntary assignees of borrowers,

to the ultimate substantive end that the lender may not

be faced in any case with an aggregation of claims for

the usury penalty in the hands of a stranger to the indi-

vidual loan transactions, such being viewed as a “legal

fraud”. Fry v. Layton, supra, and Liddell v. Litton Sys-

tems, Inc., supra. There is no indication of a Congressional

interest to encourage litigation in this area or to override

state policy.

Since the Mississippi statute law alone determines the

matters of both interest and the existence of liability for

usury and since Mississippi prescribes conditions to the

invocation of its consequent penalties, we deal with sub-

stantive law and Rule 23, being neither substantive nor

compulsory, does not stand in the way or justify the Court

in violating the established policy of the state. To do so

would not only be contrary to the Enabling Act under

which the rules were adopted but would be to sanction

invidious discrimination against national banks in this area,

contrary to the letter and spirit of the National Banking

Act.’

Moreover, the Court would be hard pressed to conclude

that the aggregation of usury claims against this national

3. Attempted federal court actions against state banks or

other lenders would fail in most cases for lack of the minimum

jurisdictional amount, if not for lack of diversity. Cf. Snyder v.

Harris, 394 U.S. 332, 89 S.Ct. 1053 (1969). If the federal court

should allow aggregation of claims for usury against national

banks, viewed by Mississippi as a “legal fraud” and non-main-

tainable under its usury laws, the result would be to allow the

perpetration of legal frauds by local standards upon national

banks but not upon state banks or local lenders, since these could

not be reached by the Rule 23 procedural device. Cf. Union Na-

tional Bank v. Louisville N.A. & C. Ry. Co., 163 U.S. 325, 16 S.Ct.

1039 (1896); Daggs v. Phoenix National Bank, 177 U.S. 549, 20

S.Ct. 732 (1900). On the point that local law determines who may

maintain an action for usury, to the end that equal treatment may

be had by all, see Meadow Brook National Bank v. Recile, 302

F.Supp. 62 (E.D. La. 1969); Municipal Leasing Systems v. North-

ampton National Bank of Easton, 382 F.Supp. 968 (E.D. Pa. 1974).

bank was superior for the “fair” adjudication of the con-

troversy in the very face of the clear holding of the

Mississippi Court that such amounts to a “legal fraud” by

borrowers contrary to the intent of the state’s statutes on

usury. Rule 23 was not designed as a device to perpetrate

a legal fraud.

Turning, finally, in partial summary, to the specifics

of Rule 23, the Court finds that the numerosity, commonal-

ity and typicality requirements of subpart (a) are present

but that the plaintiffs cannot fairly and adequately protect

the interests of the class, because they are neither able

nor willing to finance the case as a class action.

Subparts (b)(1) and (2) are inapplicable. See Gold-

man Vv. The First National Bank of Chicago, 56 F.R.D. 587

(N.D. Ill. 1972); Kenny v. Landis Financial Group, Inc.,

349 F.Supp. 939 (N.D. Iowa, 1972); Eisen III, 479 F.2d

1005 (CA 2 1973); Eisen v. Carlisle & Jacquelin, 94 S.Ct.

2140, 417 U.S. 156 (1974), footnote 4.

Subpart (b)(3) conditions have not been met. The

proof fails to show that questions of law or fact common

to members of the class predominate over questions af-

fecting only individual members. While there are some

questions common to all, each individual case presents its

own questions of fact and its own problems on issues of

both liability and damages. By pragmatic standards, the

case is unmanageable as a class action.

A class action is not superior to other available methods

for the fair and efficient adjudication of the controversy,

especially in view of (1) the availability of traditional

procedures for prosecuting individual actions and the un-

desirability of concentrating the litigation of claims in this

federal forum; (2) the substantive law and policy of the

state which views the aggregation of usury claims as a

“legal fraud” and unfair to the lender; (3) the invidious

banks in the enforcement of usury laws contrary to the

discrimination which would be imposed upon national

intent of the National Banking Act; (4) the horrendous

penalty sought to be imposed, which could result in de-

struction of the bank and benefit no one substantially

other than the attorneys and (5) the tremendous burden

which would be imposed upon the Court in attempting to

handle 90,000 claims to the detriment of other deserving

litigants who have at least equal claim upon the Court's

time and energies.

The motion for an order that this case proceed as a

class action is denied. The cause will proceed upon the

individual complaints as in other cases.

We are of the opinion that this Opinion and the Order

which will be entered pursuant hereto involve a controlling

question of law as to which there is substantial ground

for a difference of opinion and that an immediate appeal

may materially advance the ultimate determination of the

litigation. The order denying certification of this case as

a class action is hereby certified for appeal pursuant to

28 U.S.C. §1292 and all proceedings in this Court are hereby

stayed for a period of thirty (30) days pending possible

appellate review of this Opinion and Order to be entered

pursuant hereto.

This 27th day of September, 1975 at Biloxi, Mississippi.

/s/ Walter L. Nixon, Jr.

United States District Judge

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

(Title Omitted in Printing)

ORDER OVERRULING MOTION AND DENYING

CLASS ACTION STATUS

(Filed October 15, 1975)

Came on to be heard the motion of the plaintiff and

intervening plaintiff for an order allowing this action to

be maintained as a class action under Rule 23 of the Federal

Rules of Civil Procedure, and the Court having heard and

considered the said motion on the evidence, both oral and

documentary, and having considered the briefs and argu-

ments of counsel and finding that this action should not

be allowed to proceed as a Class action for the reasons set

forth in the Memorandum Opinion dated September 27,

1975 as filed in this cause, which said Memorandum Opin-

ion is incorporated herein by reference but that this order

should be certified for possible appeal under 28 U.S.C.,

Section 1292:

IT IS ORDERED AND ADJUDGED that the motion

of the plaintiff and intervening plaintiff that this case

proceed as a class action be and it is hereby denied, and

this cause shall proceed in all respects upon the individual

complaints as in other cases, subject to a temporary stay

of proceedings as ordered below.

This Court being of the opinion that the decision

denying class action status in this case as evidenced by

the Memorandum Opinion dated September 27, 1975, and

as further evidenced by this order, involves a controlling

question of law as to which there is substantial ground

for a difference of opinion and that an immediate appeal

to the Court of Appeals for the Fifth Circuit may mate-

rially advance the ultimate determination of the litigation;

IT IS FURTHER ORDERED that the order denying

certification of this case as a class action is hereby certified

for appeal pursuant to 28 U.S.C., Section 1292, and all

proceedings in this Court are hereby stayed for a period

of thirty (30) days pending possible appellate review of

the said opinion and order.

SO ORDERED on this the 14th day of Otcober, 1975.

/s/ Walter L. Nixon, Jr.

United States District Judge

Approved As to Form Only:

W. Roberts Wilson, Jr.

Toxey Hall Smith, Jr.

Robert S. Vance

Frederick G. Helmsing

By: /s/ Frederick G. Helmsing

/s/ Vardaman S. Dunn

IN THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 75-8416

ROBERT L. ROPER, and JACK HUDGINS, on Behalf

of Themselves and all others Similarly Situated,

Petitioners,

versus

CONSURVE, INC., d/b/a BANKAMERICARD CENTER,

Jackson, Mississippi, and DEPOSIT GUARANTY NA-

TIONAL BANK, Jackson, Mississippi, a Body

Corporate,

Respondents.

On Applica:ion for Leave to Appeal from an

Interlocutory Order

(Filed December 8, 1975)

Before GEWIN, GOLDBERG, and DYER, Circuit Judges.

BY THE COURT:

IT IS ORDERED that leave to appeal from the inter-

locutory order of the United States District Court for the

Southern District of Mississippi entered on October 14,

1975, is denied.

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

CIVIL ACTION No. 4261(N)

ROBERT L. ROPER AND JACK HUDGINS ON BEHALF

OF THEMSELVES AND ALL OTHERS SIMILARLY

SITUATED,

Plaintiffs,

Vs.

CONSURVE, INC., D/B/A BANKAMERICARD CENTER,

JACKSON, MISSISSIPPI, AND DEPOSIT GUARANTY

NATIONAL BANK, JACKSON, MISSISSIPPI, A

BODY CORPORATE,

Defendants.

OFFER OF DEFENDANTS TO ENTER JUDGMENT

AS BY CONSENT AND WITHOUT WAIVER OF

DEFENSES OR ADMISSION OF LIABILITY

(Filed June 1, 1976)

Now come the defendants, subsequent to the order of

this Court declining to allow this action to proceed as a

class action under Rule 23 of the Federal Rules of Civil

Procedure, and would show and represent the following:

Plaintiffs have filed in this cause a motion for sum-

mary judgment on the original amended complaint filed

February 28, 1972, and on the supplemental complaint filed

January 15, 1974, but plaintiffs have represented to the

Court in writing that, “The named plaintiffs will dismiss

the Truth-in-Lending issue in this cause,” and that a formal

motion to dismiss would be presented prior to the hearing

on the summary judgment set for June 9, 1976. A copy

of the written notice is attached as Exhibit A.

The amended complaint filed February 28, 1972 con-

tains a dernand for judgment which, as applied to the

individual plaintiffs, is as follows:

“1. ... such... sum as represents the aggregate

of the following (a) Twice the amount of interest

paid within two years next preceding the filing of

this complaint . . . and (b) such additional interest

as has been charged .. . but not paid... within two

years next preceding the filing of this complaint.

“2. Any other remedies and relief afforded by the

laws of the United States or the State of Mississippi

which may be deemed appropriate by the Court.

“3. Cost of this action... .”

The supplemental complaint filed January 15,- 1974

demands judgment as follows:

“WHEREFORE, PREMISES CONSIDERED, Plaintiffs

sue and demand judgment on behalf of themselves...

in the same manner, style and fashion as sought in

the original complaint and amended complaints for a

supplemental period including the period from the

date of the filing of the original lawsuit down to the

date of the filing hereof, and Plaintiffs sue and demand

damages for themselves . . . in double the amount of

interest exacted from them . . . from the time of the

filing of the original lawsuit down to, until and in-

cluding the date of the filing of this supplemental

complaint, and Plaintiffs pray on behalf of themselves

... that the interest charged but not yet collected

be forfeited... .”

The period covered by the original complaint as

amended and the supplemental complaint sometimes re-

ferred to as the “suit period” is the period September 18,

1969 through January 15, 1974.

Neither the complaint, as amended, nor the supple-

mental complaint nor the motion for summary judgment

reduces plaintiffs’ demand to a specific dollar amount, but

instead, the complaint seeks recovery of a sum which

represents twice the amount of interest paid by plaintiffs

and forfeiture of such additional interest as has been

charged to plaintiffs but not paid plus the cost of this

action and any other remedies and relief afforded by the

laws of the United States or the State of Mississippi which

may be determined appropriate by the Court.

Without admitting any liability and expressly denying

the same, defendants do hereby offer to enter judgment,

as by consent, to provide that defendants shall pay to each

of the plaintiffs, Robert L. Roper and Jack Hudgins, and

said individual plainitffs do have and recover the amount

equal to the sum demanded, as aforesaid, in the original

complaint as amended and in the supplemental complaint,

being a sum equal to double the service charges made

during the entire suit period and paid by each of the

said named plaintiffs plus a sum equal to the forfeiture

of service charges made during the entire suit period but

unpaid plus interest as provided by thc laws of the State

of Mississippi applicable to plaintiffs’ demands and all

costs of this action and consequent to such offer, defen-

dants do hereby waive their right to litigate with said

plaintiffs the issues of liability to each of them to the

extent of the judgment hereby offered to be entered, all

without prejudice to or waiver of defendants’ right to

deny liability for and to litigate issues involving any

claims or complaints of any other persons or any other

plaintiffs.

This offer is made for the purpose only of avoiding

further expense and loss of time to the parties in the

prosecution and defense of the individual complaints of

the named plaintiffs and without admitting any legal obli-

gations or liabilities whatsoever.

Attached hereto as Exhibit B is a suggested form of

interlocutory order and a suggested form of a final judg-

ment which are tendered to the Court for entry pursuant

to this offer of judgment.

Respectfully submitted,

Consurve, Inc., D/B/A BankAmer-

icard Center, Jackson, Mississippi,

and Deposit Guaranty National

Bank, Jackson, Mississippi

By: /s/ Vardaman S. Dunn

Attorney of Record

Of Counsel:

Cox & Dunn, Ltd.

Post Office Box 1046

Jackson, Mississippi 39205

(Certificate of Service Omitted in Printing)

Exhibit A

TOXEY HALL SMITH, JR.

Lawyer

P.O. Drawer 8 Phone 601—928-3222

Wiggins, Mississippi 39577

P. O. Box 836 Phone 601—875-3212

Ocean Springs, Mississippi 39564

May 13, 1976

Mr. James Dukes

Federal Court Law Clerk

Federal Courthouse

Biloxi, Mississippi 39533

Re: Roper vs. Consurve

Dear Jimmy:

This will confirm my telephone call of yesterday to

the effect that the named plaintiffs will dismiss the Truth

in Lending issue in this cause. I have communicated this

information directly tv opposing counsel, Vardaman

S. Dunn, so he will be aware of our position.

I was reluctant to do this because of the class action

aspects of the case. However, I feel that we have the

power to do so, without criticism, on behalf of the named

plaintiffs and, since this is not a class action at this time

it would not be binding upon the class if later certified

on appeal or remand.

If the judge desires, I will submit a formal motion

to dismiss prior to the hearing on the summary judgment

set for June 9, 1976.

Very truly yours,

/s/ Toxey Hall Smith, Jr.

Toxey Hall Smith, Jr.

THSjr: pa

cc: Hon. Vardaman S. Dunn

P. O. Box 1046

Jackson, Mississippi 39205

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

(Title Omitted in Printing)

RDER OF DISMISSAL WITH PREJUDICE

OF TRUTH-IN-LENDING COUNT

(Filed June 9, 1976)

There coming on for hearing the motion ore tenus

by the named plaintiffs to dismiss, with prejudice, the

second count of the Complaint relating to the Federal

Truth-in-Lending Act and the Court being fully advised

in the premises finds said motion should be, and hereby

is, sustained.

It is, therefore, ordered and adjudged that the second

count of the plaintiff's Complaint, as last amended, relating

to the Federal Truth-in-Lending Act is dismissed with

prejudice.

ORDERED AND ADJUDGED this the 9th day of June,

1976.

/s/ Walter L. Nixon, Jr.

United States District Judge

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

(Title Omitted in Printing)

INTERLOCUTORY ORDER ON PLAINTIFFS’

MOTION FOR SUMMARY JUDGMENT AND

DEFENDANTS’ OFFER TO ENTER JUDGMENT

AS BY CONSENT

(Filed June 9, 1976)

Came on this day to be heard the motion of plaintiffs

for summary judgment and the offer of defendants to

enter judgment in favor of the plaintiffs, Robert L. Roper

and Jack Hudgins, for the amounts demanded in the orig-

inal complaint, as amended, and in the supplemental com-

plaint (except for the amount demanded in the plaintiffs’

alleged “second cause of action” based on an alleged viola-

tion of the Federal Truth-in-Lending Act which said second

cause of action has been dismissed on plaintiffs’ motion),

and the Court finding that judgment should be entered

in favor of each of the said named plaintiffs for the amounts

demanded as offered by defendants, to-wit: For a sum

equal to double the service charges made by defendants

against each of the said plaintiffs during the entire suit

period (September 18, 1969 through January 15, 1974)

and paid by each of said named plaintiffs plus a sum

equal to the forfeiture of all service charges made during

said suit period but unpaid by the plaintiff against whom

said charges were made plus interest at the rate of 6%

per annum from the respective dates that charges were

made or made and paid, as the case may be, plus the

plaintiffs’ costs of Court, with said judgment to bear in-

terest in turn from its date of entry until paid at the

rate allowed by the laws of the State of Mississippi.

IT IS FURTHER ORDERED that plaintiffs prepare

and submit to the Court a calculation of the amount for

which judgment is to be entered pursuant to the above

formula, whereupon final judgment will be entered in

favor of the plaintiffs as offered by defendants, said judg-

ment to be without advantage or prejudice to either party

on any issues or questions of liability in any further action

or. proceeding by or in behalf of the named plaintiffs

or others.

Plaintiffs have made a counter-offer of judgment

which has been rejected by defendants. Plaintiffs do not

accept defendants’ offer of judgment, and this judgment

on defendants’ offer of judgment is entered over the ob-

jection of the plaintiffs.

IT IS FURTHER ORDERED that plaintiffs submit

said calculation of the amount for which judgment is to

be entered within 14 days from the date of this order.

SO ORDERED on this the 9th day of June, 1976.

/s/ Walter L. Nixon, Jr.

United States District Judge

Approved As to Form Only:

/s/ (legible)

Attorney for Plaintiffs

/s/ Vardaman S. Dunn

Attorney for Defendants

IN THE

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF MISSIPPI

SOUTHERN DIVISION

(Title Omitted in Printing)

PLAINTIFFS’ CALCULATION OF DAMAGES

(Filed June 30, 1976)

NOW COME the Plaintiffs in the above styled and

numbered cause, by and through undersigned counsel, and

submit the following calculation of damages and interest

pursuant to the Court’s Interlocutory Order of June 9,

1976, and with respect show the Court as follows, to wit:

Plaintiff Robert L. Roper’s damages are in the sum

of SIX HUNDRED EIGHTY-THREE AND 30/100 ($683.-

30) DOLLARS, plus interest of TWO HUNDRED SIX

AND 12/100 ($206.12) DOLLARS.

Plaintiff Jack Hudgins’ damages are in the sum of

THREE HUNDRED TWENTY-TWO AND 70/100 ($322.-

70) DOLLARS, plus interest of ONE HUNDRED AND

84/100 ($100.84) DOLLARS.

Respectfully Submitted,

Robert L. Roper and Jack Hudgins

By: /s/ Wm. Roberts Wilson, Jr.

Of counsel for Plaintiffs

(Certificate of Service Omitted in Printing)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

(Title Omitted in Printing)

FINAL JUDGMENT ON PLAINTIFFS’ MOTION FOR

SUMMARY JUDGMENT AND DEFENDANTS’

OFFER OF JUDGMENT AS BY CONSENT

(Filed July 15, 1976)

Came on for approval the calculation of the amount

for which judgment is to be entered as presented by plain-

tiffs and pursuant to the interlocutory order heretofore

entered in this cause, and the Court finding that plaintiffs’

calculation is correct and in conformity with the directions

of said interlocutory order and that judgment should be

entered accordingly in favor of each plaintiff pursuant

to the offer of judgment as made by defendants;

IT IS ORDERED AND ADJUDGED AS FOLLOWS:

1. That the plaintiff, Robert L. Roper, do have and

recover of and from defendants the principal sum of $683.30

plus legal interest in the sum of $200.12, making a total

of $889.42 for which judgment is rendered.

2. That the plaintiff, Jack Hudgins, do have and re-

cover of and from defendants the principal sum of $322.70

plus legal interest in the sum of $100.84, making a total

of $423.54 for which judgment is rendered.

3. That the judgment in favor of each of the plaintiffs

bear interest at the rate of 8% per annum from its date

until paid and that each of the plaintiffs do have and

recover their costs of Court to be taxed by the Clerk.

This judgment is entered pursuant to the offer of

judgment as made by defendants for the amount demanded

by the named plaintiffs in the original complaint, as

amended, and in the supplemental complaint as calculated

by plaintiffs pursuant to the interlocutory order heretofere

entered and is entered without waiver on the part of

defendants of any defenses and without admission by the

defendants of any liability to the named plaintiffs or others

and is without advantage or prejudice to any of the parties

or others upon any issue or question of liability to the

named plaintiffs or others.

Plaintiffs have made a counter-offer of judgment

which has been rejected by defendants. Plaintiffs do not

accept defendants’ offer of judgment, and this judgment

on defendants’ offer of judgment is entered over the objec-

tion of the plaintiffs.

The defendants may discharge their liability hereunder

by depositing the sum awarded herein with the Clerk

of the Court, pursuant to Rule 67 of the Federal Rules

of Civil Procedure and may take the Clerk’s receipt there-

for, and the Clerk thereupon shall forthwith remit the

amounts adjudged to the respective parties on their re-

quest.

SO ORDERED AND ADJUDGED on this the 15 day

of July, 1976.

/s/ Walter L. Nixon, Jr.

United States District Judge

Approved as to Form Only

/s/ Frederick G. Helmsing

s/ Vardaman S. Dunn

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

(Title Omitted in Printing)

CLERK’S RECEIPT FOR DEPOSIT

(Filed July 15, 1976)

The undersigned Clerk in and for the jurisdiction

aforesaid does hereby acknowledge receipt of the sum of

$889.42 for payment of judgment of Robert L. Roper and

the sum of $423.54 for payment of judgment of Jack

Hudgins, pursuant to authorization as contained in the

“FINAL JUDGMENT ON PLAINTIFFS’ MOTION FOR

SUMMARY JUDGMENT AND DEFENDANTS’ OFFER OF

JUDGMENT AS BY CONSENT” dated and entered on the

15th day of July, 1976. '

DATED this 15th day of July, 1976.

Harvey G. Henderson, Clerk

United States District Court

By /s/ I. Henley, D.C.

IN THE

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

(Title Omitted in Printing)

NOTICE OF APPEAL

(Filed August 10, 1976)

TAKE NOTICE that ROBERT L. ROPER and JACK

HUDGINS, on behalf of all others similarly situated to

themselves and on whose behalf the named Plaintiffs

sought class action treatment, appeal the Judgment entered

herein on July 15, 1976, and all prior orders.

/s/ W. Roberts Wilson, Jr.

Attorney for Plaintiffs

(Certificate of Service Omitted in Printing)

IN THE

UNITED STATES COURT OF APPEALS FOR THE

FIFTH CIRCUIT

No. 76-3600

ROBERT L. ROPER AND JACK HUDGINS, ON BEHALF

OF ALL OTHER SIMILARLY SITUATED,

Plaintiffs-Appellants,

vs.

CONSURVE, INC., d/b/a BANKAMERICARD CENTER,

AND DEPOSIT GUARANTY NATIONAL BANK,

JACKSON, MISSISSIPPI, A BODY

CORPORATE,

Defendants-Appellees.

MOTION TO DISMISS APPEAL FOR

WANT OF JURISDICTION

Now come the appellees, (collectively called “Bank”),

and respectfully move the Court for an order dismissing

the Notice of Appeal and for cause, would show the fol-

lowing:

1. The case is moot as to the two individual plain-

tiffs because the plaintiffs have received a money judg-

ment for all relief demanded.

2. The Notice of Appeal does not attempt to appeal

from the final judgment in favor of the individual plain-

tiffs but seeks unly an appeal “on behalf of all others

similarly situated to themselves and on whose behalf the

named plaintiffs sought class action treatment, . . .”.

3. The “all other similarly situated” to plaintiffs on

whose behalf the appeal is noticed are non-parties and have

no standing to request review because there is no certifica-

tion of this case as a “class action” under Rule 23 of

the Federal Rules of Civil Procedure.

4. There is no justiciable “case or controversy” before

the Court on which jurisdiction may be exercised pruden-

tially or under Article III, § II, of the Constitution of the

United States.

The following supporting papers are attached as an

Addendum to this Motion: (reference to papers omitted)

Respectfully submitted,

/s/ Vardaman S. Dunn

Attorney for Appellees

(Certificate of Service Omitted in Printing)

Robert L. ROPER et al.,

Plaintiffs-Appellants,

Vv.

CONSURVE, INC., d/b/a BankAmericard Cente: and

Deposit Guaranty National Bank, Jackson, Mississippi,

Defendants-Appellees.

No. 76-3600.

United States Court of Appeals,

Fifth Circuit.

Aug. 24, 1978.

Credit card holders brought class action against na-

tional bank on behalf of all other Mississippi holders of

credit cards issued by bank, alleging that charges made

were usurious under Mississippi law. The United States

District Court for the Southern District of Mississippi,

Walter L. Nixon, Jr., J., denied certification following evi-

dentiary hearing and, after bank tendered two class rep-

resentatives payment in full of amount each individually

claimed, entered judgment on behalf of plaintiffs, and

plaintiffs appealed. The Court of Appeals, Alvin B. Rubin,

Circuit Judge, held that: (1) despite bank’s offer to pay

off named plaintiffs, named plaintiffs were not precluded

from appealing denial of class certification; (2) class repre-

sentation was adequate, and (3) class action was superior

method of proceeding.

Reversed and remanded.

Thornberry, Circuit Judge, specially concurred and

filed opinion.

1. Federal Civil Procedure (Key) 1698

Where there is determination that class is not main-

tainable, notice requirements of class action rule’s dismissal

or compromise provision do not apply, at least where dis-

missal and settlement of action do not directly adversely

affect rights of individuals not before court. Fed.Rules

Civ.Proc. rule 23(c)(1), (e), 28 U.S.C.A.

2. Federal Civil Procedure (Key) 1696

By very act of filing class action, class representatives

assume responsibilities to members of class, and they may

not terminate their duties by taking satisfaction; a cease-

fire may not be pressed upon them by paying their claims.

Fed.Rules Civ.Proc. rule 23(e), 28 U.S.C.A.

3. Federal Courts (Key) 544

Defendant’s satisfaction of representative plaintiffs’

claims could not preclude them from appealing denial of

class certification nor did it excuse them from their duty

of doing so absent express approval by trial court. Fed.

Rules Civ.Proc. rule 23(c)(1), (e), 28 U.S.C.A.

4. Federal Courts (Key) 544

Member of putative class may appeal denial of certifi-

cation, even though it has been decided that claims of

named plaintiff lack merit. Fed.Rules Civ.Proc. rule 23,

28 U.S.C.A.

5. Federal Courts (Key) 544

An individual plaintiff who has already prevailed in

trial court may appeal denial of class certification. Fed.

Rules Civ.Proc. rule 23, 28 U.S.C.A.

6. Federal Courts (Key) 544

Individual plaintiff who loses on merits may appeal

denial of class certification. Fed.Rules Civ.Proc. rule 23,

28 U.S.C.A.

7. Federal Civil Procedure (Key) 164

Even if named plaintiffs in class action had been satis-

fied with offer of judgment and had not objected, named

plaintiffs continued to maintain stake in procuring class-

wide relief. Fed.Rules Civ.Proc. rule 23, 28 U.S.C.A.

8. Federal Civil Procedure (Key) 164

Where only major cost to be advanced before it could

be determined whether defendant was liable was that of

class notice, where postage for such notice, if individual

mailing was required, would have been about $15,000,

where counsel offered to advance that sum looking to

named plaintiffs for repayment if required, where named

plaintiffs offered note and mortgage on realty as security,

and where named plaintiffs’ counsel also offered to give

bond to guarantee that notice costs would be met, named

plaintiffs adequately established their ability to finance

litigation for purposes of class certification. Fed.Rules

Civ.Proc. rule 23(a) (4), 28 U.S.C.A.

9. Federal Civil Procedure (Key) 164

Neither satisfaction nor denial of individual plaintiffs’

claims, if effective, necessarily precluded their serving as

adequate representative of class. Fed.Rules Civ.Proc. rule

23 (a) (4), 28 U.S.C.A.

10. Federal Civil Procedure (Key) 182.5

Where credit card holders brought class action against

national bank on behalf of 90,000 Mississippi residents who

held credit cards issued by bank alleging that charges made

were usurious under Mississippi law, where claims were

relatively small, averaging less than $100 each, where ques-

tion of law involved applied alike to all, where individual

fact determinations could be reached by using objective

criteria and assistance of computer, and where potential

class members could not effectively secure relief by another

type of action, and where proposed class was peculiarly

manageable plaintiffs were entitled to certification of class.

Fed.Rules Civ.Proc. rule 23(b) (3), 28 U.S.C.A.

11. Federal Civil Procedure (Key) 182.5

In class action brought by credit card holders against

national bank on behalf of all other Mississippi holders

of credit cards issued by bank in which plaintiffs alleged

that charges made were usurious under Mississippi law,

common questions predominated for purposes of satisfying

class action rule, and issues unique to each claim were

not so complex as to make costs of determination prohibi-

tive or to require individual evidentiary hearings. Fed.“

Rules Civ.Proc. rule 23(b), 28 U.S.C.A.

12. Federal Civil Procedure (Key) 161

Class action rule was designed to prevent problem

of wasteful and uneconomical multiple individual actions,

Fed.Rules Civ.Proc. rule 23, 28 U.S.C.A.

13. Federal Civil Procedure (Key) 161

Because considering financial impact of judgment in

determining whether to certify class, presupposes success

on the merits and requires trial court to express an

opinion on harshness vel non of particular remedy prior

to trial itself, it ought to be allowed only in extreme cases.

Fed.Rules Civ.Proc. rule 23, 28 U.S.C.A.

14. Federal Civil Procedure (Key) 182.5

Attitude of Mississippi law disfavoring usury suits

did not preclude bringing of suit by credit card holders

against national bank as class action since action was regu-

lated by federal law and since state law, even if relevant,

would yield to federal class action rule. Fed.Rules Civ.

Proc. rule 23, 28 U.S.C.A.

15. Usury (Key) 82

Under Mississippi law usury claims are penal and

are viewed as personal to borrower; aggregation of such

claims is condemned.

16. Banks and Banking (Key) 270(1)

National Bank Act adopts usury laws of states only

insofar as they severally fix rates of interest; sole particular

in which national banks are placed on an equality with

natural persons is as to rate of interest, and not as to

character of contracts they are authorized to make. Na-

tional Bank Act, 12 U.S.C.A. §§ 85, 86.

17. Banks and Banking (Key) 270(1)

Provisions of National Bank Act looking to local law

as surrogate federal law for determining permissible in-

terest charges were designed by Congress to place national

banks on plane of competitive equality with other lenders

in respective states. National Bank Act, 12 U.S.C. §§ 85,

86.

18. Federal Civil Procedure (Key) 182.5

Difficulties in management of class action suit brought

by credit card holders against national bank did not pre-

clude bringing of suit as class action, where all members

of proposed class lived in one state, where defendant had

each member’s address on computer, where itemized his-

tory of each account could readily be obtained, and where

substantial costs w~uld be involved only if bank was found

to be liable on plaintiffs’ usury claims. Fed.Rules Civ.Proc.

rule 23(d) (3), 28 U.S.C.A.

19. Federal Civil Procedure (Key) 182.5

Possible assertion of counterclaims by national bank

in class action brought against it by credit card holders

did not preclude bringing of suit as class action. Fed.Rules

Civ.Proc. rule 23, 28 U.S.C.A.

Appeal from the United States District Court for the

Southern District of Mississippi.

Before WISDOM, THORNBERRY, and RUBIN, Cir-

cuit Judges.

RUBIN, Circuit Judge:

This case presents two class action questions; whether

the class action claim and, indeed, the entire controversy

became moot when, after the trial court denied certification

following an evidentiary hearing, the defendant bank ten-

dered to the two class representatives payment in full

of the amount each individually claimed and judgment

was entered on their behalf; and, if not, whether a class

action is superior to other available means for the fair

and efficient adjudication of a claim for usurious charges

cn behalf of a class potentially comprising 90,000 holders

of credit cards issued by a national bank. Having con-

cluded that the defendants cannot moot the class claim

by attempting to pay off the class representatives, we

decide also that a class action is not only superior to

other methods but singularly appropriate for the adjudi-

cation of this controversy, and, therefore, remand the case

for further proceedings.

Facts

Two holders of credit cards issued on the ‘‘BankAmer-

icard” plan sued the national bank that had issued the

cards under the National Bank Act, 12 U.S.C. §§ 85 and

86, contending that the charges made were usurious’ on

behalf of themselves and all other Mississippi holders

of the same cards issued by the defendant.2 Under the

plan, card holders can buy merchandise or services from

third persons who have contracts with the bank or other

member banks, and charge their purchases. The merchants

then sell the credit instruments to the bank at a discount.

The bank bills the card holder; if the payment is not

made within a certain time, it charges interest on the

unpaid balance. During the suit period, there were 90,000

to 100,000 individual card holders.

The trial court declined to certify the action as a

class action. The bank then made an offer of judgment

to each of the two individual plaintiffs, without admitting

liability, and tendered to each the maximum amount that

each could have recovered ($889.42 and $423.54, respec-

tively) by depositing this sum in the registry of the court.

The two named plaintiffs have never accepted the tender,

1. The complaint alleges the rates exceeded those permitted

by Section 36, Chapter 2 of the Mississippi Code (1942) as

amended. See Title 75, ch. 17 §§ 1, 17, Mississippi Code (1974).

2. The original complaint also charged a violation of the

Truth-in-Lending Statute, 15 U.S.C. § 1640, et seq., but that claim

has been dropped. ~

but judgment based on defendant’s offer of judgment was

entered over plaintiffs’ objection.

The credit card system, as the experienced trial judge

correctly stated, is made possible by the use of computers.

The computer charges each transaction to the card holder’s

account. If the credit instrument is placed by the mer-

chant with some other bank, it is transmitted through

normal banking channels to the defendant and appropriate

funds or credits are transferred to the transmitting bank.

For the bank’s convenience, the accounts are divided

into ten separate groups, called cycles. The credit card

accounts are posted on ten days a month; the charges

for holders whose names are in each cycle are posted

in one day. The computer is programmed so that, on

the billing date, it adds charges, subtracts, credits, adds

any finance charge due under the BankAmericard plan

and prepares a statement reflecting each transaction. The

statement is then mailed to the customer.

The data in the computer is stored on magnetic tapes.

These are updated from period to period. Transaction

data is not retained permanently on the tapes, however.

It is printed (on “printouts”), and the printouts are re-

tained. A microfilm record is made of all charge tickets,

credit transactions and statements.

During the period in question, the bank made a

monthly service charge of 142% on the unpaid balance

of each account. However, each customer was allowed

30 days within which to pay his account without any

service charge; if payment was not received within that

time, the computer added to the customer’s next bill

144% of the unpaid portion of the prior bill, which was

shown as the new balance. This is the charge contended

to be usurious. Thus, if a customer bought merchandise

and the charge slip for this was received by the bank

the day after a monthly bill had been mailed to him,

he would not be billed for the new charge for almost

30 days, and would then have 30 more days within which

to make payment in full without incurring the service

charge. On the other hand, an item might be received

by the bank on the day before the new statement was

prepared, yet the service charge for it would be computed

on the same basis as if it were received at the beginning

of the month. (When he received his bill, the customer

might also elect to pay it in installments; in that case,

the service charge was made only on unpaid installments.)

About 35% of the bank’s customers did not incur

a service charge. For the 65% who did the rate was

always 1 1/2% on the unpaid balance; if the effective

rate were computed based on the number of days from

the date the bank received each charge until it was paid,

that effective rate would vary for each customer each

month. There was evidence that both the finance fees

charged to each card holder and the fees each actually

paid during the suit period can be tabulated, although

this requires clerical assistance in addition to the use of

the computer. The plaintiff's expert witness testified that

the total cost of such preparation, including computation

of the refund due each class member if the action were

successful, would be $45,575.

It is also possible to reconstruct every account in full

by again processing the transactions. The plaintiffs’ expert

estimated the cost of this, if it were required by the court,

to be $125,000. He testified that there are contractors

available to perform such services. The defendant’s expert

testified that, if it were necessary to reconstruct every

individual account, the cost might range from $367,700

to $3,432,000.

The computer could, of course, easily be used to give

notice to members of the class and sort out persons who

are not class members (for example, because they opened

accounts after the class was certified).

II.

Mootness

[1,2] The notion that a defendant may short circuit

a class action by paying off the class representatives either

with their acquiescence or, as here, against their will,

deserves short shrift. Indeed, were it so easy to end

class actions, few would survive. One well-publicized dan-

ger in the class action is the possibility that it will be

used to collect quick, undeserved damages; this type of

effort to establish a quick coup has been called a “strike

suit.” We have held that prior to certification a class

action cannot be dismissed merely because the representa-

tives are satisfied, unless there is notice to the putative

class of the proposed dismissal and a determination by

the court that the dismissal is proper, as required by

Rule 23(e) F.R.C.P. Pearson v. Ecological Science Corp.,

5 Cir. 1975, 522 F.2d 171, 177, cert. denied sub nom., 1976,

425 U.S. 912, 96 S.Ct. 1508, 47 L.Ed.2d 762, and cases

cited therein. Where, as here, there is a Rule 23(c) (1)

determination that the class is not maintainable, the notice

requirements of Rule 23(¢) do not apply if “dismissal

and settlement of the action do not directly affect ad-

versely the rights of individuals not before the court.”

Id. By the very act of filing a class action, the class

representatives assume responsibilities to members of the

class. They may not terminate their duties by taking

satisfaction; a cease-fire may not be pressed upon them

by paying their claims. The court itself has special re-

sponsibilities to ensure that the dismissal does not preju-

dice putative members.

SE re ae TF Ee SF

[3-6] Even if the court should have permitted the

bank ‘to pay off the named plaintiffs, either with their

acquiescence or over their objection, this satisfaction of

their claims could not preclude them from appealing the

denial of Certification, nor would it excuse them from

their duty of doing so absent express approval by the

trial court. See generally, Miller, An Overview of Federal

Class Actions: Past, Present and Future (Federal Judicial

Center, 1977) at 57-63. A member of the putative class

may appeal the denial of certification, even though it has

been decided that the claims of the named plaintiffs lack

merit. United Airlines, Inc. v. McDonald, 1977, 432 U.S.

385, 97 S.Ct. 2464, 53 L.Ed.2d 423. An individual plaintiff

who has already prevailed in the trial court may appeal

the denial of class certification. Gelman v. Westinghouse

Electric Corp., 3 Cir. 1977, 556 F.2d 699, 701-702, and cases

cited therein; Esplin v. Hirschi, 10 Cir. 1968, 402 F.2d

94, cert. denied, 1969, 394 U.S. 928, 89 S.Ct. 1194, 22 L.Ed.2d

459. .An individual plaintiff who loses on the merits may

also appeal a denial of certification. Horn v. Associated

Wholesale Grocers, Inc., 10 Cir. 1977, 555 F.2d 270, 276-

277; Donaldson v. Pillsbury Co., 8 Cir. 1977, 554 F.2d 825,

831, note 5, cert. denied, 1977, 434 U.S. 856, 98 S.Ct. 177,

54 L.Ed.2d 128, and cases cited therein. There is no reason

why an individual plaintiff to whom payment of his claim

has been tendered should have less standing in the light

of the judicial responsibility to ensure that class represen-

tatives adequately represent the interests of the class and

do not settle either their claims or the class acticn without

court approval.

In Satterwhite v. City of Greenville, 5 Cir. 1978, ........

PA ous , -----, note 10 (slip op. 6531, 6540, note 10),

we noted thai if the representative’s claim became moot

prior to appellate review of a denial of certification based

upon a full evidentiary hearing, there are several reasons

for permitting the representative to appeal that decision.

In particular, unless the representative is permitted to

appeal, whether the alleged error in denying certification

will be reviewed will depend upon the intervention of

a putative class member who, under Pearson, is not entitled

to notice of the individual compromise and may be unaware

that the putative class is without a representative who

has a viable claim. Review of alleged judicial error ought

not be foreclosed so fortuitously. Additionally, such inter-

venors offer inadequate protection because of the possibil-

ity that defendant will pay a satisfactory price for their

abandoning the appeal.

[7] Constitutional requirements are met: a viable

controversy still exists with respect to the maintainability

determination. The only issue is who may raise it. Here,

plaintiffs have a stake because of their objection to the

compromise. However, even had they been satisfied with

the offer of judgment, the result would not change; the

individual plaintiffs would maintain a stake in procuring

class-wide relief. Gelman v. Westinghouse Electric Corp.,

supra. Moreover, they maintain a nexus with the class

and, for reasons detailed subsequently, continue to be ade-

quate representatives for purposes of Rule 23(a) (4) despite

the mootness of their claims. See Satterwhite, supra, ........

a EE) cecil , note 11 (slip op. at 0541, note 11); Long

v. Sapp, 5 Cir. 1974, 502 F.2d 34, 42. Hence, tne issue

is properly before us on appeal.

ITI.

The Class Action

The lower court, after several conferences with counsel

and a full study of the evidentiary materials, concluded

that, although the numerosity, commonality and typicality

ee B

requirements of Rule 23(a)(1), (2) and (3) Fed.R.Civ.

Proc. are met, the requirement of Rule 23(a) (4) that the

plaintiffs fairly and adequately protect the interests of the

class is not satisfied because of the inability of the named

plaintiffs to finance the case. It found that the require-

ments of Rule 23(b) (3)* were not met because plaintiffs

failed to establish that questions of law and fact common

to class members predominate, and because a class action

is not superior due to: (1) the availability of the tradi-

tional procedures for prosecuting individual claims in Mis-

sissippi courts; (2) the “horrendous penalty,” which could

result in “destruction of the bank” if claims are aggre-

gated; (3) the substantive law of Mississippi which views

the aggregation of usury claims as undesirable; and (4)

the tremendous burden of handling 90,000 claims, particu-

larly if counter-claims are filed. Upon review, we find

that the requinements of Rule 23(a) (4) are met, and that

the court went beyond the bounds allowed for the exercise

of its discretion with respect to the Rule 23(b) (3) deter-

mination. See Shumate & Co., Inc. v. National Association

of Securities Dealers, Inc., 5 Cir. 1975, 509 F.2d 147, 155,

cert. denied, 1975, 423 U.S. 868, 96 S.Ct. 131, 46 LsEd.2d

97.

3. The court found that the requirements of Rule 23(b) (1)

were not met because the prospective class consisted entirely of

small claimants who could not afford to litigate their individual

actions; hence there was little chance of “inconsistent or varying

adjudications with respect to individual members of the class

which would establish incompatible standards of conduct for

the party opposing the class... .’’ and that Rule 23(b) (2) did not

apply because the actions were not predominantly for injunctive

or declaratory relief. See Eisen v. Carlisle & Jacquelin, 1974,

417 U.S. 156, 163, 94 S.Ct. 2140, 2146, note 4, 40 L.Ed.2d 732. It

is net necessary for us to review these determinations because

of the availability of Rule 23(b)(3) certification. However, we

note that the court’s finding with respect to Rule 23(b)(1) [that

individual actions are unlikely] is inconsistent with its determina-

tion that traditional procedures for prosecuting individual actions

provide meaningful alternatives to class certification.

A. Adequacy of Class Representation

[8] No question is raised about the ability and will-

ingness of the named plaintiffs fairly and adequately to

protect the interests of the class, but the defendants do

question the plaintiffs’ ability to finance the litigation.*

Their counsel are qualified and experienced. Eisen v. Car-

lisle & Jacquelin (Eisen II), 2 Cir. 1968, 391 F.2d 555,

562. The only major cost to be advanced before it is

determined whether or not the defendant is liable is that

of a class notice. See Oppenheimer Fund, Inc. v. Sanders,

SIG, . sence if. Spaees , 98 S.Ct. 23380, 57 L.Ed.2d 253. The

postage for such a notice, if individual mailing is required,

would be about $15,000. Counsel properly offered to ad-

vance that sum looking to the named plaintiffs for repay-

ment if required. Their clients offered a note and mort-

gage on realty as security. Counsel has also offered to

give a bond to guarantee that the notice costs will be

met. The sufficiency of such action has been established,

Sayre v. Abraham Lincoln Federal Savings & Loan Ass’n,

E.D.Pa.1974; 65 F.R.D. 379, modified, D.C. 1975, 69 F.R.D.

117; Halverson v. Convenient Food Mart, Inc., 7 Cir. 1972,

458 F.2d 927, 931 n. 7.

f9] Neither the satisfaction nor denial of the indi-

vidual plaintiffs’ claims, if effective, necessarily precludes

4. According to Professor Arthur Miller, An Overview of

—" Class Actions: Past, Present and Future, (F.J.C.1977),

at 32:

There have been instances in which a district judge has con-

cluded that the representatives are inadequate, at least in

part, because they do not appear to have the financing to

maintain the action. But this is a rather tricky consideration

that must be treated with some care because if financial

capacity is eraphasized, it may mean that poorer claimants

will be preventea from maintaining class actions. Accord-

ingly, discretion is required; although the ability to fund the

— is a factor, 1. probably should not be a determinative

actor.

their serving as adequate representatives. We have per-

mitted representatives to serve the class despite adjudica-

tions determining that their individual claims are not viable

if they are members of the class and maintain an adequate

nexus with it. Long v. Sapp, 5 Cir. 1974, 502 F.2d 34;

Huff v. N.D. Cass Co. of Ala., 5 Cir. 1973, 485 F.2d 710,

712-714 (en banc). See Gelman v. Westinghouse Electric

Corp., 3 Cir. 1977, 556 F.2d €99, 701; Satterwhite v. City

of Greenville, 5 Cir. 1978, .... F.2d ........ eae , note 8

(slip op. 6531, 6538, note 8), approving this jurisprudence

and distinguishing East Texas Motor Freight System, Inc.

v. Rodriguez, 1977, 431 U.S. 395, 97 S.Ct. 1891, 52 L.Ed.2d

453, on the basis that the named representatives in that

case were not members of the class at the time the suit

was filed nor at the time of the certification decision.

The relevant inquiry is whether the plaintiffs maintain

a sufficient interest in, and nexus with, the class so as

to ensure vigorous representation. The defendant’s deci-

sion to confess judgment has not affected the vigor with

which plaintiffs have pursued the class claims, and we

find no basis for concluding that they have not satisfied

the requirements of Rule 23(a) (4).

(——

B. Superiority of a Class Action

[10] This is a classie case for a Rule 23(b) (3) class

action. The claims of a large number of individuals can

be adjudicated at one time, with less expense than would

be incurred in any other form of litigation. The claims

are relatively small, said even by the plaintiffs to average

less than $100 each, and the question of law is one that

applies alike to all. While it may be necessary to make

individual fact determinations with respect to charges, if

that question is reached, these will depend on objective

criteria that can be organized by a computer, perhaps

with some clerical assistance. It will not be necessary

to hear evidence on each claim.

A number of similar class actions have been certified

by district courts,» and appear to have been susceptible

of management. Certification will achieve one of the pri-

mary purposes of the class action, “enhanc[ing] the effi-

cacy of private actions by permitting citizens to combine

their limited resources to achieve a more powerful litiga-

tion posture.” Hawaii v. Standard Oil Co. of California,

1972, 405 U.S. 251, 266, 92 S.Ct. 885, 893, 31 L.Ed.2d 184.

We consider separately each of the factors that are argued

to militate against certification.

1. Common Issues

[11] The legal issues, as the trial court correctly

noted, are whether the finance or service charge made

is subject to the Mississippi statute on usury—for such

a charge might be considered exempt from the statute;

whether the charge is interest and, if so, what rate of

interest is permissible; and whether the rate actually paid

in any given case is to be determined on a daily, monthy,

or other basis, and what dates are to be used for deter-

mination of the rate. If the legal issues are resolved

in favor of some or all of the members of the class, there

would then be factual questions; whether the permissible

rate was exceeded in any given case, and, if so, by what

amount.

5. Cosgrove v. First & Merchants National Bank, E.D.Va.

1975, 68 F.R.D. 555; Weit v. Continental Illinois National Bank &

Trust Co, N.D.Ill.1973, 60 F.R.D. 5, appeal dismissed, 7 Cir. 1976,

535 F.2d 1010; Cohen v. District of Columbia National Bank,

D.D.C.1972, 59 F.R.D. 84; Partain v. First National Bank of Mont-

gomery, M.D.Ala.1973, 59 F.R.D. 56; Zachary v. Chase Manhattan

Bank, S.D.N.Y.1971, 52 F.R.D. 532, together with a number of

other cases repo by published decisions. See dicta in Fisher

v. First National Bank of Omaha, 8 Cir. 1977, 548 F.2d 255, 262.

—

In determining these issues, it may (or may not, de-

pendent upon Mississippi law), be important that the ef-

fective daily rate or monthly rate paid would vary from one

account to another. If Mississippi law proscribes or per-

mits a 114% charge per se, the effective daily rate will be

unimportant. If Mississippi law determines whether a

charge is usurious depending not on its nominal terms

but on the average daily rate charged, then whether the

effective rate is based upon the period. commencing when

the bank receives the bill or when the customer receives

the bill may determine whether the rate is usurious.

Additionally, if the period ends on the date the charge

is actually paid, as opposed to the date the charge is due,

the effective rate charged a customer who paid his account

five days after receiving a billing showing a finance charge

(35 days after the charge was computed at the rate of

114% a month) would be different from the rate paid

by another customer who paid 29 days after receiving

the bill (59 days after the charge was compiled).

Thus, it may (or again, may not, dependent on whether

any charge made was usurious under Mississippi law, ya

whether every 114% charge made was excessive, Or

whether some other standard applies) be necessary to re-

construct each card holder’s account. Neither the trial

court nor we can know in advance of a substantive decision

whether it is necessary to make a computation (after all,

the charge may be valid); or, if it is, how Mississippi law

determines what is usurious and by what standards the

computations are to be made. The best scenario for the

utility of a class action is constructed if the trial court

decides that the charge can never be considered usurious;

the defendant disposes of 90,000 potential claims in one

coup. The worst hypothesis will materialize if the court

decides that Mississippi law requires the rate to be com-

puted on each individual account on a daily-rate basis.

£2

Whether the testimony of plaintiffs’ expert (who has

done a similar job before) or defendant’s expert (who

obviously fears disaster) be accepted, no computation need

be made, and no costs need be incurred until the trial court

determines the applicable Mississippi rule and, if Missis-

sippi law appears to create liability, sets standards for its

application, perhaps by an inexpensive preliminary sample

of accounts.

Hence, common questions predominate for purposes

of satisfying Rule 23(b) (3); the issues unique to each

claim, if any are raised, are not so complex as to make the

costs of determination prohibitive, or to require individual

evidentiary hearings.

2. ‘Availability of Other Relief

The potential class members cannot effectively secure

relief, if any is due, by another type of action. The sug-

gestion by the defendant that each plaintiff might resort

to a Mississippi small claims court assumes that the pro-

cedures of such courts are adequate for the sophisticated

type of claim here presented, and that Mississippi state

courts could handle this volume of suits. Moreover, the

national bank defendant could remove every such case

to federal court. 28 U.S.C. §§ 1337 and 1441(b); see Par-

tain v. First Nat'l. Bank, 5 Cir. 1972, 467 F.2d 167. Cf.

Marquette Nat'l. Bank v. First Nat'l. Bank, D.Minn.1976,

422 F.Supp. 1346.

What is more important is that each plaintiff has the

right to seek relief in federal court. If even one-twentieth

of them chose to do so, the court would have 5000 suits

to dispose of, approximately four times the total number

of suits of all kinds filed with its clerk annually. Should

6. Management Statistics for United States Courts 1977, at

60. One thousand two hundred eighty nine (1,289) cases were

filed in the Southern District of Mississippi in the twelve month

period ending June 30, 1977.

83 !

a federal forum be used for such individual actions, the

cost of each action would surely increase, as would the cost

of determining damages. The alleged statutory wrong may

go unchallenged because the costs of proof exceed the likely

recovery. See Wright & Miller, Federal Practice and Pro-

cedure, § 1779 at 61 (1972 ed.).

[12] Even assuming arguendo that multiple individ-

ual actions were feasible, they would be wasteful and un-

economical. This is precisely the problem that Rule 23

was designed to prevent. “The very purpose to be served

by a class action is the opportunity it affords to prevent .

multiplicity of suits based on a wrong common to all.

Green v. Wolf Corp., 2 Cir. 1968, 406 F.2d 291, cert. denied,

1969, 395 U.S. 977, 89 S.Ct. 2131, 23 L.Ed.2d 766.

3. Impact on Defendant

In Truth-in-Lending actions, Congress has manifested

its concern about suits potentially ruinous to defendants

by limiting recovery. 15 U.S.C. § 169le. There appears

to be no comparable limit for class actions under the

tional Banking Act although recovery is limited in acti

of this type to twice the amount of the interest pai 12

U.S.C. § 86. See McCollum v. Hamilton Nat'l. Bank¥1938,

303 U.S. 245, 247, 58 S.Ct. 568, 570, 82 L.Ed. 819; Coral

Gables First Nat’l. Bank v. Constructors of Fla., Inc., Fla.

App. 1960, 119 So.2d 741; First Nat'l. Bank v. Lowery, 1937,

234 Ala. 56, 173 So. 382; First Nat’l. Bank v) Davis, 1911,

135 Ga. 687, 70 S.E. 246. We find no evidence that Congress

otherwise sought to protect the net worth of national

banks against damaging suits if, in fact, they overcharged

their customers. If it be assumed, however, that courts

should heed hurricane warnings about potential disasters

to defendants and use them as a reason to evacuate class

actions then, we consider this to be less than catastrophic.

It it is assumed that the defendant is correct when it states

that about 35% of the card holders paid no service charge,

then the number of potential claimants is 60,000. If the

average recovery is $100 each, the potential liability is

large ($12,000,000) but not ruinous to a defendant with

capital accounts of $45,000,000 and with assets of $520,-

005,90.

[13] Unlike the situation under some statutes, we

are not concerned with a fixed minimum penalty of a sub-

stantial amount for a technical violation, see Partain v.

First Nat'l. Bank of Montgomery, M.D.Ala.1973, 59 F.R.D.

56, 60-61, that if magnified, would exact a punishment un-

related to statutory purposes. Compare Ratner v. Chem-

ical Bank N. Y. Trust Co., S.D.N.Y.1972, 54 F.R.D. 412.

Because considering the financial impact of a judgment

presupposes success on the merits and requires the trial

court to express an opinion on the harshness vel non of a

particular remedy prior to trial itself, it ought to be allowed

only in extreme cases.

4. Mississippi Usury Law and Aggregation

[14-17] Nor is the attitude of Mississippi law dis-

favoring usury suits sufficient to deter the entertainment

of this class action. Usury claims are penal in Mississippi

and are viewed as personal to the borrower; the aggregation

of such claims is condemned.” Fry v. Layton, 1941, 191

Miss. 17, 2 So.2d 561.8 Of course, we deal here with a

7. Class action treatment in the present case is not the

same aS aggregation of claims. Recovery for each individual

member of the class is sought, and for no more than the amount

of the illegal interest extracted from each class member and the

equal penalty payable to each class member.

8. In Fry v. Layton, supra, the Mississippi statute required

a forfeiture of both interest and principal. Pe rhe snpellos had

sought to buy up claims from borrowers of a loan company and

thereafter aggregate such claims and recover of the lender both

interest and principal. This type of scheme was denominated

“legal fraud” by the Mississippi court. 2 So.2d at 565.

claim against a national bank, controlled in matters of

procedure by the Federal Rules of Civil Procedure. John

R. Alley & Co. v. Federal Nat’l. Bank of Shawnee, 10 Cir.

1942, 124 F.2d 995; the action is regulated by federal law,

although the federal statute may iook to local law as

surrogate federal law for determining the permissible in-

terest charges. 12 U.S.C. § 85.° As we said in Partain v.

First National Bank of Montgomery, 5 Cir. 1972, 467 F.2d

167, 173:

This interplay between the federal statute and State

usury laws is elucidated by Evans v. National Bank, 251

U.S. 108, 40 S.Ct. 58, 64 L.Ed. 171 (1919): “The

National Bank Act establishes a system of general

regulations. It adopts usury laws of the states only

insofar as they severally fix the rate of interest”; by

National Bank v. Johnson, 104 U.S. 271, 26 L.Ed. 742

(1881): “The sole particular in which national banks

are placed on an equality with natural persons is as to

the rate of interest, and not as to the character of con-

tracts they are authorized to make... .”

(Emphasis added & original)

Hence, the state law with respect to aggregating usury

claims that derive from state law is inapposite with respect

to claims founded on federal statute, and would yield to

Rule 23, F.R.C.P., even if relevant.

9. These provisions of the Act were designed by Congress

to place national banks on a plane of competitive equality with

other lenders in respective states by adopting state law with

respect to permissible interest rates. Fisher v. First National

Bank, 8 Cir. 1977, 548 F.2d 255; First National Bank in Mena v.

Nowlin, 8 Cir. 1975, 509 F.2d 872; Brown v. First Nat’l City Bank,

2 Cir. 1974, 503 F.2d 114; Monongaheia Appliance Co. v. Com-

munity Bank & Trust, N.A., N.D.W.Va., 1975, 393 F.Supp. 1226,

aff'd, 4 Cir. 1976, 532 F.2d 75i.

5. Manageability

[18] The case presents no unusual difficulties in class

management. While the class is large, it is peculiarly

manageable, All the members live in one state, the defen-

dant has each member’s address on a computer; both that

address and the itemized history of each account can

readily be obtained.

After substantive rulings a e made on the basic issues

of liability and damage computation, the case is so manage-

able that a computer, either in the bank itself or leased

elsewhere, can handle its administration—as distinguished

from the ultimate computation which may in some instances

require clerical personnel. The task is not a particularly

difficult one when compared to the work that the bank

ordinarily performs on its own computer. Under any

theory the work involved in the refund computation pro-

cedure will represent only a small fraction of the work

originally done on the credit card accounts by the bank’s

computer operation. The evidence shows that this ordinary

work was done with such comparative ease that the com-

puter could also do all of the other work of the bank, plus

the work of 60 or 70 other banks under contract with it

and continue to advertise for more business.

We do not agree with the trial court that there is a

serious possibility that the defendant, “faced with the

enormous task of defending these thousands of claims,

might be pressured into a compromise settlement or even

a compromise on procedure to minimize the enormous cost

and disruption of its normal business functions.” We do

not minimize the effect of “strike actions,” and we cer-

tainly do not applaud them. But, as we have indicated,

the specter of large cost will materialize only if, after a

preliminary hearing, it appears likely that damages are

actually due a large number of class members. Only then,

eee

after liability is determined, will there be substantia! cost,

either in defense or in payment of damages.

_[19] The lower court alluded to the potential problem

of counter-claims. This likewise can be handled, if that

point is reached, by adopting standards and classifying the

claims. See Weit v. Continental Illinois Nat’l. Bank, N.D.

Ill. 1973, 60 F.R.D. 5. If the court should conclude at any

time that the entire group of counter-claims makes the

plaintiffs’ claims on behalf of such persons unmanageable,

the court has the continuing authority under Rule 23 to

issue a supplemental order excluding counter-claim defen-

dants from the plaintiff class or separating and severing

the class into two different classes, one with counter-claims

and one without counter-claims. As Judge Johnson said

in Partain, supra:

The potential assertion of counter claims against these

few members of the proposed class cannot be allowed

to defeat an otherwise valid class action when to do

so would effectively deprive thousands of class mem-

bers of the relief to which they are entitled. At the

same time the rights of the defendant should be pro-

tected.

59 F.R.D. at 59.

Of course, the easiest way for any court to handle

complex class litigation is simply to deny certification; this

may have the real effect of permitting a defendant to

violate a federal statute either with impunity or minor

expense. In the present case few of the individual claim-

ants would have the resources necessary to litigate against

a well-financed defendant. This consideration underlies

the decision of the Seventh Circuit in Hohmann v. Packard

Instrument Co., 7 Cir. 1968, 399 F.2d 711, which found a

similar situation a classic one for sustaining the class action

involved. Quoting its prior decision in Weeks v. Bareco

Oil Company, 7 Cir. 1941, 125 F.2d 84, 90, the court said:

To permit the defendants to contest liability with each

claimant in a single, separate suit, would, in many cases

give defendants an advantage which would be almost

equivalent to closing the door of justice to all small

claimants. This is what we think the class suit prac-

tice was to prevent. ’

399 F.2d at 715.

For these reasons, we REVERSE and REMAND to the

trial court for further proceedings consistent with this

opinion.

THORNBERRY, Circuit Judge, specially concurring:

I write separately to express my views on the mootness

issue discussed in Part II of Judge Rubin’s thorough and

scholarly opinion, which I fully join in all other respects.

Although I agree that a defendant should not be able to

terminate a class action by tendering a few dollars to a

putative class representative, I cannot subscribe to the

sweeping dicta in the majority opinion that treats fact —

situations foreign to the instant case. Here the named |

plaintiffs strenuously objected to the defendant’s “settle-

ment” offer, and it cannot be said that a true settlement

took place. The voluntary acceptance by named plaintiffs

of such an offer is not iirvolved, however, and I see no need

to address the mootness question that it would present.

UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 76-3600

D. C. Docket No. CA-4261-(N)

ROBERT L. ROPER, ET AL..,

Plaintiffs-Appellants,

versus

CONSURVE, INC., d/b/a BankAmericard Center, and

DEPOSIT GUARANTY NATIONAL BANK, Jackson,

Mississippi,

Defendants-Appellees.

Appeal from the United States District Court for the

Southern District of Mississippi

Before WISDOM, THORNBERRY and RUBIN, Circuit

Judges.

JUDGMENT

This cause came on to be heard on the transcript of

the record from the United States District Court for the

Southern District of Mississippi, and was argued by coun-

sel;

ON CONSIDERATION WHEREOF, It is now here

ordered and adjudged by this Court that the judgment of

the said District Court in this cause be, and the same

is hereby, reversed; and that this cause be, and the same

is hereby remanded to the said District Court for further

proceedings consistent with the opinion of this Court.

It is further ordered that defendants-appellees pay to

plaintiffs-appellants the costs on appeal to be taxed by

the Clerk of this Court.

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

OFFICE OF THE CLERK

Edward W. Wadsworth Tel 504—598-6514

Clerk 600 Camp Street

New Orleans, La. 70130

October 20, 1978

TO ALL PARTIES LISTED BELOW:

No. 76-3600—Robert L. Roper, et al. vs. Consurve,

Inc. etc. and Deposit Guaranty Na-

tional Bank, etc.

Dear Counsel:

This is to advise that an order has this day been en-

tered denying the petition( ) for rehearing, and no mem-

ber of the panel nor Judge in regular active service on

the Court having requested that the Court be polled on

rehearing en banc (Rule 35, Federal Rules of Appellate

Procedure; Local Fifth Circuit Rule 12) the Petition( )

for rehearing en banc has also been denied.

See Rule 41, Federal Rules of Appellate Procedure for

issuance and stay of the mandate.

Very truly yours,

Edward W. Wadsworth, Clerk

By /s/ Clare F. Sachs

Deputy Clerk

cc Mr. William Roberts Wilson, Jr.

Mr. Toxey Hall Smith, Jr.

Mr. Frederick G. Helmsing

Mr. Champ Lyons

Mr. Vardaman S. Dunn

LETTER TO CLERK OF FIFTH CIRCUIT FROM

VARDAMAN S. DUNN

(Filed April 17, 1978)

COX & DUNN, LTD.

Attorneys at Law

Deposit Guaranty Building

Jackson, Mississippi 39205

Vardaman S. Dunn P. O. Box 1046

William H. Cox, Jr. Telephone 354-3783

Area Code 601

April 14, 1978

Mr. Edward W. Wadsworth, Clerk

United States Court of Appeals

Fifth Circuit

Room 102, 600 Camp Street

New Orleans, Louisiana 70130

RE: Robert L. Roper, et al. v.

Consurve, Inc., No. 76-3600

Dear Sir:

When this case was argued orally on Tuesday, April

11, Judge Thornberry requested that we obtain for the

Court a Certificate from the United States District Court

Clerk regarding a certain matter involved.

We have obtained the Certificate and the original and

three copies are enclosed herewith.

I am also enclosing four extra copies of this letter.

Will you please distribute this Certificate and letters to

the members of the panel consisting of Judges Thorn-

berry, Wisdom and Rubin and oblige.

Yours very truly,

/s/ V. S. Dunn

Vardaman S. Dunn

VSD: ne

Enclosures

cc: Mr. Frederick G. Helmsing

IN THE

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF MISSISSIPPI

SOUTHERN DIVISION

CIVIL ACTION No. 4261(N)

ROBERT L. ROPER AND JACK HUDGINS, ON BEHALF

OF THEMSELVES AND ALL OTHERS

SIMILARLY SITUATED,

Plaintiffs,

vs.

CONSURVE, INC., d/b/a BANKAMERICARD CENTER,

JACKSON, MISSISSIPPI, AND DEPOSIT GUARANTY

NATIONAL BANK, JACKSON, MISSISSIPPI, A BODY

CORPORATE,

Defendants.

CERTIFICATE OF CLERK

I, the undersigned Clerk of the Court aforesaid, do

hereby certify that the following appears from the record

in this office:

1. On July 15, 1976, a receipt was issued by the Clerk

to Mr. Vardaman Dunn, tendering $1,312.96 into the reg-

istry of this Court, a true copy of which is attached to this

Certificate.

2. The sum of $1,312.96 has remained and is now in

the registry of this Court.

3. Attached hereto is a true copy of the Judgment

under which the above payment into the registry of the

court was made.

4. There is no record that any request for disburse-

ment from the registry of the Court has been made or filed

by either Robert L. Roper or Jack Hudgins.

SO CERTIFIED, this the 14th day of April, 1978.

Harvey G. Henderson, Clerk

United States District Court

By: /s/ Bobbie J. Price

Deputy Clerk

(Exhibits Appear Elsewhere in Appendix)

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.