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Class Action Defense Cases-Land Grantors v. United States: Over Defense Objection Federal Claims Court Certifies Only Third Class Action Under Revised RCFC 23

Court of Federal Claims Rejects Federal Government’s Defense Arguments and Certifies Class Action Under RCFC 23

On June 22, 2006, the Court of Federal Claims certified, over defense objections, only the third class action under RCFC 23 since the statute’s substantial revision in May 2002. Land Grantors in Henderson, Union & Webster Counties, Kentucky v. United States, 71 Fed.Cl. 614 (Ct. Cl. 2006). Briefly, the federal government acquired about 36,000 acres of land in Kentucky to establish what became Camp Breckinridge. Most of the land had been family farms, and it was acquired – either by settlement or jury verdict – after the government initiated condemnation proceedings. From 1942-1944, the government paid approximately $3.1 million for fee simple title to the land. In 1951, the government learned of gas and oil reserves on the property, and from 1957-1964 it realized more than $1.8 million in lease revenues. After Camp Breckinridge became inactive, in 1966 the governmental sold the coal rights for $7.4 million, and the gas, oil and mineral rights for almost $24.6 million. Former landowners claimed “they were paid nothing for their coal, gas, oil, and other mineral rights or a de minimus amount for existing leases when their land was condemned in 1942-1944.” Id., at 617-18. Still later, the government sold the surface rights to the condemned land for almost $6 million. Id., at 618. In 1993, Congress intervened. Id., at 618-19.

A putative class action lawsuit was filed on behalf of the original landowners in 1994, and plaintiffs sought class action certification the following year. The defense objected, and in 1997 the motion was denied in part based on the Hearing Officer’s finding that “Class Action suits are disfavored in the United States Court of Federal Claims litigation.” Land Grantors, at 619. We do not summarize here the tortured history leading to the December 29, 2005, order by a new judge granting reconsideration of the 1997 order denying class certification. See id., at 619-20. Suffice it to say that it followed a November 2005 Court of Federal Claims opinion that held, in pertinent part, “If the proposition that class actions ‘are disfavored’ ever was valid, it certainly is no longer so now.” Id., at 620(citation omitted). The claims court then examined the elements for class action certification under RCFC 23 in great detail, and concluded that they had been satisfied. Id., at 621-626.

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