No Merits, No Class

The district court certified a class based on a Texas statute about late fees, which says: “A landlord may not charge a tenant a late fee for failing to pay rent unless … the fee is a reasonable estimate of uncertain damages to the landlord that are incapable of precise calculation and result from late payment of rent.” 

The panel majority in Cleven v. Mid-Am. Apartments disagreed with the district court’s reading of the statute, and thus remanded: “[T]here is no requirement that a landlord engage in a process to arrive at its late fee so long as the fee is a reasonable estimate at the time of contracting of damages that are incapable of precise calculation. Therefore, the district court erred in interpreting section 92.019 and the case is remanded to the district court to determine if class certification is appropriate.”

A dissent saw matters differently: “That the plaintiffs all raised a common contention about how § 92.019 should be interpreted that is central to their claims for relief is sufficient reason for us to affirm class certification, and we do not have jurisdiction to review the district court’s partial summary judgment ruling on only the issue of liability at this stage in the litigation.” No. 18-50846 (Dec. 9, 2021).