The opinion of the court was delivered by: LASKER
Eulalie Bryan sues under the Interstate Land Sales Full Disclosure Act, (ILSFDA) 15 U.S.C. §§ 1703, 1709, and moves to certify the suit as a class action.
On September 23, 1973, Bryan entered into a "Reservation and Purchase Agreement" (land sales contract) for two one-half acre lots (numbers 39 and 40 in Block 146) in the Rio Rancho Estates at a price of $6,140. The land sales contract signed is identical in all respects (other than price, down payment schedule and lot location) to that described in Husted v. Amrep, D.C., 429 F. Supp. 298 also decided today. On March 13, 1974, Bryan signed a "Property Exchange Amendment" with Rio Rancho Estates whereby lot 40 was eliminated from her contract and the purchase price reduced to $3,150.
Following the FTC complaint and criminal indictment described in the Husted opinion, supra, Bryan filed her complaint on November 21, 1975. She charges defendants with scheming to defraud her and other class members by inducing them to pay $6,000. per acre for New Mexico land that was "virtually worthless," by means of various sales techniques and misrepresentations described in the indictment and incorporated by reference in the complaint. (paras. 9-10) In addition to charging the defendants with engaging in a fraudulent scheme prohibited by 15 U.S.C. § 1703, the complaint charges that in violation of § 1709 of the Act
"defendants sold lots by use of a statement of record which contained untrue statements of material facts and omitted to state material facts. Among other things, the statement did not reveal that the land being sold (a) was virtually worthless, and (b) had been purchased by defendants for $180 per acre and was appraised in 1973 at $165 per acre." (para. 12 of the Complaint)
Plaintiff seeks to represent "those purchasers (from November 21, 1972 forward) who purchased property in an 'undeveloped area' [of Rio Rancho Estates] and who have not exchanged their property for a lot in a developed area (i.e. an area with water, electricity, sewerage and telephones)." (Plaintiff's Reply Memorandum at 4.)
To maintain a class action, plaintiff must satisfy all the requirements of Rule 23(a), Fed.R.Civ.P.:
"(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of fact or law common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class."
and, in addition, one of the requirements of Rule 23(b). Plaintiff relies on Rule 23(b)(3), which requires a showing that
"the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy."
Defendants concede that the numerosity requirement of (a)(1) is satisfied but contend that plaintiff has not met the remaining requirements of Rule 23(a) or those of Rule 23(b)(3).
For reasons that will become apparent, we consider first the appropriateness of a class with respect to the claim asserted in Paragraph 12, namely, that in violation of § 1709(a) defendants sold lots covered by a statement of record containing untrue statements of material fact and omitting to state material facts required to be stated. Plaintiff need show only that her lot was covered by a statement of record containing untrue statements of material fact or omitting material facts required to be stated. Any question of fact or law ...