NEIGHBORHOOD BUILDERS, INC., et al. v. TOWN OF MADISON, SC 18083
Judicial District of Waterbury
Class Action; Whether Class Action Certification was Proper Where Defendant Claims Extensive Individualized Proof will be Required as to Whether Each Class Member Suffered Injury; Whether a Municipality is Subject to CUTPA Liability. On April 1, 2003, the town of Madison amended its ordinances to increase the cost of a building permit. The plaintiffs, five developers and homebuilders who had paid the increased fee, brought this action to challenge the fee increase, claiming, broadly, that the new fee had nothing to do with the actual cost to the town of regulating building activities and instead constituted an illegal means of funding the town's general operations and social programs. The plaintiffs' five count complaint alleged that the town's conduct violated statutes governing municipalities, the state and federal constitutions and the Connecticut Unfair Trade Practices Act (CUTPA). Seeking to pursue a class action, the plaintiffs sought certification of a class consisting of entities that had paid the defendant the building permit fee since April 1, 2003. The town opposed class action certification, noting that, while the plaintiffs were the direct purchasers of the building permits, some of the plaintiffs had passed on some or all of the cost of the fee to their clients and customers. The trial court granted class certification. In rejecting the town's "pass on" defense to certification, the court noted that, in Vacco v. Microsoft Corp., 260 Conn. 59 (2002), the Supreme Court held that an indirect purchaser of a product lacked standing to pursue antitrust and CUTPA claims and suggested that the law favors direct purchasers bringing causes of action. After the town filed this interlocutory appeal from the class certification order, the trial court dismissed four counts of the complaint, leaving only the CUTPA claim. On appeal, the town urges that the Supreme Court, in the interest of judicial economy, direct that judgment be rendered in its favor on the remaining count, claiming that a municipality cannot be liable under CUTPA and that it did not engage in any "trade or commerce" as contemplated by the CUTPA statute. Alternately, the town claims that the trial court wrongly granted class certification on determining that the plaintiffs met their burden of proving the Practice Book § 9-8 requirements of predominance and superiority; that is, that questions common to class members predominate over questions affecting individual members and that a class action is the superior method of adjudication. The town argues that because each plaintiff will have to show an "ascertainable loss" to recover under CUTPA, class certification was inappropriate since an extensive individualized inquiry - or "mini-trial" - will be needed to determine whether each ultimately bore the cost of the building permit fee and, therefore, actually suffered injury.