Doug Kilby Ausley McMullen PA 123 South Calhoun Street Tallahassee Florida 32301 850 2249115 AUSLEY McMULLEN The class action is an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only ID: 780819
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Slide1
Class Action Primer: Overview of the Federal and State Class Action Rules
Doug KilbyAusley McMullen, PA123 South Calhoun StreetTallahassee, Florida 32301(850) 224-9115
AUSLEY
McMULLEN
Slide2“The class action is an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.”
Comcast Corp. v. Behrend, 133 S.Ct. 1426 (2013).2
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Slide3“To come within the exception, a party seeking to maintain a class action must affirmatively demonstrate his compliance with Rule 23. The Rule does not set forth a mere pleading standard. Rather, a party must not only be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, typicality of claims or defenses, and adequacy of representation, as required by Rule 23(a). The party must also satisfy through evidentiary proof at least one of the provisions of Rule 23(b).”
Id.3
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Slide4Recurring ThemesIt’s all about the evidence.
Actually, it’s all about creativity.Really, it’s all about explaining to the Judge how the class will (not) work.4
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Slide5Judge Posner“I don’t get a lot out of Rule 23.”“For certification the question
is: Is this an efficient way to deal with the dispute? Is there a real class, a lot of people with a common interest? Is their representation competent? Are there clearly focused issues?” ABA National Institute on Class Actions, Oct. 20, 2016, available at https://www.bna.com/posner-class-action-n57982081985
/
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Slide623(a)(1) - Numerosity(a) Prerequisites
. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:(1) the class is so numerous that joinder of all members is impracticable;6
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Slide7NumerosityTwo components:A threshold number of class members
Impracticality of joinder7
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Slide8Numerosity(threshold number)
“Although mere numbers are not dispositive, the Eleventh Circuit has indicated that less than twenty-one class plaintiffs is inadequate, and more than forty class plaintiffs is generally enough to satisfy the rule.” Wilmington Savings Fund Society, FSB v. Business Law Group, P.A., 2017 WL 1034198, at *7 (M.D. Fla. 2017).8
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Slide9Numerosity(impracticability of joinder)
“The Court may also consider factors such as ‘the geographic diversity of the class members, the nature of the action, the size of each plaintiff's claim, judicial economy and the inconvenience of trying individual lawsuits, and the ability of the individual class members to institute individual lawsuits.’” Id.9
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Slide10NumerosityCourts view this requirement as a “generally low hurdle” to certification. Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1267–68 (11
th Cir. 2009).“Although mere allegations of numerosity are insufficient to meet this prerequisite, a plaintiff need not show the precise number of members in the class.” Id.10
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Slide11Numerosity“Nevertheless, a plaintiff still bears the burden of making some showing, affording the district court the means to make a supported factual finding, that the class actually certified meets the
numerosity requirement.” Id.11
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Slide12NumerositySuccess storiesPinnock-Lee v. Phelan Hallinan
, PLC, 2015 WL 12532742, at *2 (S.D. Fla. 2015) (defendant’s discovery responses demonstrated that class was likely comprised of at least 4,500 people in Florida who were served with the improper notice).Palm Beach Golf Center-Boca, Inc. v. Sarris, 311 F.R.D. 688, 695 (S.D. Fla. 2015) (Plaintiff submitted unrebutted evidence that faxes were sent to 7,058 unique fax numbers in Florida).
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Slide13NumerosityFailuresAbby
v. Paige, 282 F.R.D. 576, 578–79 (S.D. Fla. 2012) (speculative and conclusory assertions that class contained more than 40 members was insufficient evidence to support finding of numerosity).“When the putative class is some subset of a larger pool, the trial court may not infer numerosity from the number in the larger pool alone.” Cabrera v. GEICO, 2014 WL 11894430, at *2 (S.D. Fla. 2014) (evidence that defendant referred 3,000 files to marketer who used auto-dialer system but which failed to identify percentage of calls made to cell phones, and which calls had artificial or pre-recorded voice, was insufficient to support
numerosity
of proposed class).
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Slide14Commonality(a) Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:
(2) there are questions of law or fact common to the class;14
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Slide15Commonality“The primary concern in the consideration of commonality is whether the representative’s claim arises from the same practice or course of conduct that gave rise to the remaining claims and whether the claims are based on the same legal theory
.”Sosa v. Safeway Premium Finance Co., 73 So.3d 91, 107 (Fla. 2011).15
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Slide16Commonality“The threshold of the commonality requirement is not high.” Sosa
, 73 So.3d at 107.“[E]ven a single common question will do.” Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2556 (2011).16
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Slide17Commonality“This core of the commonality requirement is satisfied if the questions linking the class members are substantially related to the resolution of the litigation
, even if the individuals are not identically situated.” Id., at 108.17
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Slide18Commonality“That common contention, moreover, must be of such a nature that it is capable of classwide resolution—which means that determination of its truth or falsity will
resolve an issue that is central to the validity of each one of the claims in one stroke.” Dukes, 131 S.Ct. at 2551.18
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Slide19Commonality“What matters to class certification ... is not the raising of common ‘questions’—even in droves—but, rather the capacity of a classwide proceeding to generate
common answers apt to drive the resolution of the litigation. Dissimilarities within the proposed class are what have the potential to impede the generation of common answers.” Id.19
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Slide20CommonalityWhat (often) works: 1.
Antitrust claims – “Specifically in the antitrust context, courts in this Circuit have consistently held that allegations of price-fixing, monopolization, and conspiracy by their very nature involve common questions of law or fact.” In re Terazosin Hydrochloride, 220 F.R.D. 672, 686 (S.D. Fla. 2004).2. Securities fraud - “Many courts have held that where a common scheme of deception has been alleged, a common question exists.” Powers v. Stuart-James Co., Inc., 707 F.Supp. 499, 502 (M.D. Fla. 1989). 3. “Letter cases” -
Law Offices of David J. Stern, P.A. v. Banner
, 50 So.3d 1221, 1222 (Fla. 4
th
DCA
2010) (reinstatement letters demanding
excessive
fees);
Palm Beach Golf Center-Boca, Inc. v. Sarris
, 311
F.R.D
. 688, 695-96 (S.D. Fla. 2015) (uniform faxes that violated
TCPA
).
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Slide21CommonalityWhat almost never works:Any claim where reliance is an element.
Egwuatu v. South Lubes, Inc., 976 So.2d 50, 53 (Fla. 1st DCA 2008) (fraud).Hudson v. Delta Air Lines, Inc., 90 F.3d 451, 457 (11th Cir. 1996) (ERISA).
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Slide22CommonalityWhat about FDUTPA?
Was the defendant’s alleged deceptive or unfair conduct the same as to all class members?If YESLaw Offices of David J. Stern, P.A. (virtually identical reinstatement letters demanding excessive fees or sums not due and owing).Randolph v. J.M. Smucker Co., 303 F.R.D. 679, 693 (S.D. Fla. 2014) (“whether the ‘All Natural’ label is deceptive to an objective consumer is an issue common to all class members”).
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Slide23CommonalityWas defendant’s alleged deceptive or unfair conduct the same as to all class members?If NO.
Pop's Pancakes, Inc. v. NuCO2, Inc., 251 F.R.D. 677, 682–83 (S.D. Fla. 2008) (evidence showed customers were given individualized explanations of the charges).O'Neill v. The Home Depot U.S.A., Inc., 243 F.R.D. 469, 478 (S.D. Fla. 2006) (evidence showed customers were exposed to different explanations and disclosures about a damage waiver when renting equipment).
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Slide24Typicality(a) Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class;24
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Slide25TypicalityThe key inquiry for a trial court when it determines whether a proposed class satisfies the typicality requirement is whether the class representative possesses the same legal interest and has endured the same legal injury as the class members.
Sosa, 73 So. 3d at 114.25
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Slide26TypicalityThe test for typicality is not demanding and focuses generally on the similarities between the class representative and the putative class members. Mere factual differences between the class representative’s claims and the claims of the class members will not defeat typicality.
Id.26
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Slide27TypicalityRather, the typicality requirement is satisfied when there is a strong similarity in the legal theories upon which those claims are based and when the claims of the class representative and class members are not antagonistic to one another. Id
., at 114-15.27
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Slide28Typicality“[I]f proof of the representatives' claims would not necessarily prove all the proposed class members' claims, the class representatives' claims are not typical of the proposed members'
claims. Typicality, however, does not require identical claims or defenses. A factual variation will not render a class representative's claim atypical unless the factual position of the representative markedly differs from that of other members of the class.”Wilmington Savings Fund Society, FSB v. Business Law Group, P.A., 2017 WL 1034198, at *9 (M.D. Fla. 2017).
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Slide29TypicalityExamples where Courts found typicality:
Sosa – typicality satisfied where the named plaintiff and the absent class members suffered the same injury (improper $20 charges) based on the same theory (defendant violated specific Florida statutes).Law Offices of David J. Stern, P.A. - typicality satisfied where named plaintiffs and absent class members suffered the same injuries (improper charges on redemption letters) based on same theory (violations of FCCPA and FDUTPA).
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Slide30TypicalityExamples of Courts finding lack of typicality:Miami Automotive Retail
–named rep was subject to a unique defense in that she had failed to correctly report to the dealership the amount she owed on her existing lease, causing much of her own injury.Ubaldi v. SLM Corp., 2014 WL 1266783, at *8 (N.D. Cal. 2014) (Because the named plaintiff “only has a claim for declaratory relief for usury, her claim is not reasonably coextensive with any class members who paid usurious interest and would have damages. . . . Plaintiffs have not established that [the named plaintiff’s] claims are typical, and this precludes certification of the Usury subclass in its present form.”). 30
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Slide31Adequacy(a) Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:
(4) the representative parties will fairly and adequately protect the interests of the class;31
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Slide32Adequacy“A trial court’s inquiry concerning whether the adequacy requirement is satisfied contains two prongs. The first prong concerns the qualifications, experience, and ability of class counsel to conduct the litigation.
The second prong pertains to whether the class representative’s interests are antagonistic to the interests of the class members.” Sosa, 73 So.3rd at 115.32
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Slide33Adequacy(of counsel)"[C]lass counsel will adequately represent the class if they are qualified, experienced, and generally able to conduct the proposed litigation. This requires the court to evaluate a number of factors, including: (
i) counsel's knowledge and experience with class action litigation, (ii) counsel's knowledge and experience with the substantive law governing the class's claims, (iii) the resources available to counsel to pursue the class's claims, (iv) the quality of counsel's litigation efforts so far, and (v) any other relevant factor speaking to counsel's ability to represent the class's legal interests.” Baez v. LTD Financial Services, L.P., 2016 WL 3189133, at *3 (M.D. Fla. 2016).33
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Slide34Adequacy(of class representatives)Class rep with weak claim
. Robinson v. Sheriff of Cook County, 167 F.3d 1155, 1157 (7th Cir. 1999) (“if when class certification is sought it is already apparent…that the class representative's claim is extremely weak, this is an independent reason to doubt the adequacy of his representation.”).
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Slide35Adequacy(of class representatives)Unique defense would apply to class rep
. Thompson v. RelationServe Media, Inc., 610 F.3d 628, 679 (11th Cir. 2010) (“[C]lass certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation .... there is a danger that the absent class members will suffer if their representative is preoccupied with defenses unique to it.”).
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Slide36Adequacy(of class representatives)3. Class rep who
abdicates role as class representative to counsel.Lack of any knowledge of the lawsuit. See, § 1766 The Representatives Will Protect the Interests of the Class—Quality Not Quantity Is Significant, 7A Fed. Prac. & Proc. Civ. § 1766 (3d ed.) (fn. 14 - Lack of knowledge).But basic knowledge is enough. Id. (fn. 15 - General knowledge sufficient
).
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Slide37Adequacy(conflicts)Conflict where some class members benefitted from the conduct complained of.
Valley Drug Co. v. Geneva Pharms., Inc., 350 F.3d 1181, 1190 (11th Cir. 2003) (“To our knowledge, no circuit has approved of class certification where some class members derive a net economic benefit from the very same conduct alleged to be wrongful by the named representative of the class.”).37
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Slide38Types of Classes(b)(1)(A)(b)
Types of Class Actions. A class action may be maintained if Rule 23(a)is satisfied and if: (1) prosecuting separate actions by or against individual class members would create a risk of: (A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class;38
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Slide39Types of Classes(b)(1)(A)Appropriate “only under narrowly limited circumstances.”
Hall v. Burger King Corp., 1992 WL 372354, at * 4 (S.D. Fla. 1992).Applies only where a party is “obliged by law to treat the members of a class alike (a utility acting towards customers; a government imposing a tax), or where the party must treat all alike as a practical necessity (a riparian owner using water as against downriver owners).” Amchem Products, Inc. v. Windsor, 521 U.S. 591, 614 (1997). (b)(1)(A) certification is for cases seeking injunctive and declaratory relief, but not damages. In re Dennis Greenman Securities Litigation, 829 F.2d 1539, 1545 (11
th
Cir. 1987).
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Slide40Types of Classes(b)(1)(B)(b)
Types of Class Actions. A class action may be maintained if Rule 23(a)is satisfied and if: (1) prosecuting separate actions by or against individual class members would create a risk of: (B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests;40
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Slide41Types of Classes(b)(1)(B)“limited fund” cases, instances in which numerous persons make claims against a fund insufficient to satisfy all claims.
Amchem Products, 521 U.S. at 614.The possibility that an action will have either precedential or stare decisis effect on later cases is not sufficient to satisfy the requirements for (b)(1)(B). In re: Dennis Greenman Secs. Litig., 829 F.2d at 1546.
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Slide42Types of Classes(b)(2)(b)
Types of Class Actions. A class action may be maintained if Rule 23(a) is satisfied and if: (2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole;42
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Slide43Types of Classes(b)(2)“[S]ubsection (b)(2) was intended primarily to facilitate civil rights class actions, where the class representatives typically sought broad injunctive relief against discriminatory practices....”
Chase Manhattan Mortgage Corp. v. Porcher, 898 So.2d 153, 159 (Fla. 4th DCA 2005) (quoting Holmes v. Cont'l Can Co., 706 F.2d 1144, 1155 (11th Cir. 1983)).43
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Slide44Types of Classes(b)(2)The Supreme Court expressed “serious doubt about whether claims for monetary relief may be certified under [(b)(2)].”
Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2557 (2011).For now, certification under (b)(2) is improper when the proposed classes seek monetary relief, unless the monetary relief is merely “incidental” to the requested injunctive or declaratory relief. Id., at 2560; accord, Freedom Life Ins. Co. of America v. Wallant, 891 So.2d 1109, 1117-18 (Fla. 4th DCA 2004).
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McMullen
Slide45Types of Classes(b)(2)“Incidental” damages are those:
“that flow directly from liability to the class as a whole on the claims forming the basis of the injunctive or declaratory relief.” “to which class members automatically would be entitled once liability to the class (or subclass) as a whole is established.” that are “capable of computation by means of objective standards not dependent in any significant way on the intangible, subjective differences of each class member’s circumstances, nor require additional hearings or evidence to ascertain.”Wallant, 891 So.2d at 1117-18.
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Slide46Types of Classes(b)(3)(b) Types
of Class Actions. A class action may be maintained if Rule 23(a) is satisfied and if: (3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.46
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Slide47Types of Classes(b)(3) – Predominance of Common Issues
“[T]he Rule requires a pragmatic assessment of the entire action and all the issues involved. Where, after adjudication of the classwide issues, plaintiffs must still introduce a great deal of individualized proof or argue a number of individualized legal points to establish most or all of the elements of their individual claims, such claims are not suitable for class certification under Rule 23(b)(3).” Williams v. Mohawk Industries, Inc., 568 F.3d 1350, 1357 (11th Cir. 2009).
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Slide48Types of Classes(b)(3) – Predominance of Common IssuesTest in the 11
th Circuit:“[I]f common issues truly predominate over individualized issues in a lawsuit, then the addition or subtraction of any of the plaintiffs to or from the class [should not] have a substantial effect on the substance or quantity of evidence offered....” Brown v. Electrolux Home Products, Inc., 817 F.3d 1225, 1234–35 (11th Cir. 2016).
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Slide49Types of Classes(b)(3) – Predominance of Common IssuesN
ot “bean counting” of common vs. individual issues; it’s a qualitative assessment.Have to assess the “relative importance” of the common vs. individual issues.Courts should assess predominance with its “overarching purpose in mind – namely ensuring that a class action would achieve economies…promote uniformity of decision as to persons similarly situated, and without sacrificing procedural fairness and other undesirable results.”Brown, 817 F.3d at 1234-35.49
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Slide50Types of Classes(b)(3) – Predominance of Common IssuesRough proxy:
If plaintiffs can prove liability as to all members of the class using the same evidence, common issues predominateIndividualized proof as to damages generally will not preclude finding of predominanceCaveat – “individual damages defeat predominance if computing them will be so complex, fact-specific, and difficult that the burden on the court system would be simply intolerable.” Brown, 817 F.3d at 1240.50
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Slide51Types of Classes(b)(3)– Superiority of Class Method
“Three factors for courts to consider when deciding whether a class action is the superior method of adjudicating a controversy are (1) whether a class action would provide the class members with the only economically viable remedy; (2) whether there is a likelihood that the individual claims are large enough to justify the expense of separate litigation; and (3) whether a class action cause of action is manageable.” Sosa, 73 So. 3d at 116.51
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Slide52Implied Requirements(Standing)First,
the named plaintiffs must themselves have standing. Murray v. U.S. Bank Trust Nat’l Ass’n, 365 F.3d 1284, 1289 (11th Cir. 2004) (“just as a plaintiff cannot pursue an individual claim unless he proves standing, a plaintiff cannot represent a class unless he has standing to raise the claims of the class he seeks to represent”); Graham v. State Farm Fire & Cas. Co., 813 So.2d 273, 273-74 (Fla. 5th DCA 2002) (“No class action may proceed unless there is a named plaintiff with standing to represent the class.”).
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Slide53Implied Requirements(Standing)Somewhat unclear as to absent class members.
Some federal circuits hold that where a class is defined in such a way that it will include persons who lack standing, the class cannot be certified. E.g., Denney v. Deutsche Bank AG, 443 F.3d 253, 264 (2d Cir.2006).No clear authority from the 11th Circuit.Several district courts have followed Denney. See Dykes v. Dudek, 2011 WL 4904407, at *2 (N.D. Fla. 2011); Conigliaro v. Norwegian Cruise Line, 2006 WL 2861520 (S.D
. Fla. 2006).
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Slide54Implied Requirements(Standing)Examples of problems with standing:
Where named plaintiff did not purchase each of the line of products for which he or she asserted claims. Dapeer v. Neutrogena, 95 F.Supp. 3d 1366, 1374 (S.D. Fla. 2015).Where named plaintiff seeks injunctive relief, but does not assert a basis for threat of future harm, and defendant has stopped making the challenged claims about its product. Id., at 1374.Where named plaintiff in state court action has been “picked off.” Ahearn v. Mayo Clinic, 180 So. 3d 165, 169-71 (Fla. 1
st
DCA
2015
);
but see
,
Allstate
Indem
. Co. v. De La Rosa
, 800 So.2d 245, 246 (Fla. 3rd
DCA
2001) ("Although an insurer may recognize that it has made errors and may then try to correct them prior to class certification...it cannot simply try to “pick off” the named class representative
.").
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Slide55Implied Requirements(Ascertainability)
“[A] plaintiff seeking to represent a proposed class must establish that the proposed class is adequately defined and clearly ascertainable.” Little v. T-Mobile USA, Inc., 691 F.3d 1302 (11th Cir. 2012); accord, Alderwoods Grp., Inc. v. Garcia, 119 So.3d 497, 507 (Fla. 3d DCA 2013).“In order to establish ascertainability, the plaintiff must propose an administratively feasible method by which class members can be identified.” Karhu v. Vital Pharmaceuticals, Inc
., 621 Fed. Appx. 945, 947–48 (11
th
Cir. 2015
).
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Slide56Implied Requirements(Ascertainability)
“’Administrative feasibility’ means that identifying class members is a manageable process that does not require much, if any, individual inquiry.” Bussey v. Macon Cnty. Greyhound Park, Inc., 562 F. App’x 782, 787 (11th Cir. 2014); see also Alderwoods Grp., 119 So.3d at 507 (“Where a prolonged and individualized analytical struggle is necessary to establish class membership, class certification is improper.”).
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Slide57Implied Requirements(Ascertainability)
A plaintiff cannot establish ascertainability simply by asserting that class members can be identified using the defendant's records; the plaintiff must also establish that the records are in fact useful for identification purposes, and that identification will be administratively feasible. Karhu, 621 Fed. Appx. at 947-48.57
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Slide58Implied Requirements(Ascertainability)
Similarly, a plaintiff cannot satisfy the ascertainability requirement by proposing that class members self-identify (such as through affidavits) without first establishing that self-identification is administratively feasible and not otherwise problematic. Id. (discussing potential problems with proposals for self-identifying class members).
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Slide59Implied Requirements(Ascertainability)
Ascertainability satisfied:Where plaintiffs offered testimony from database expert that defendants’ computer database was sufficient to identify class members and damages suffered. In re Checking Account Overdraft Litigation, 307 F.R.D. 656, 665 (S.D. Fla. 2015).Where defendant’s discovery responses show that its records will identify class members. Legg v. Spirit Airlines, Inc., 315 F.R.D. 383, 388 (
S.D. Fla. 2015).
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Slide60Implied Requirements(Ascertainability)
Ascertainability not satisfied:Where plaintiff’s proposal for identifying class members would require protracted individual inquiries. McCamis v. Servis One, Inc., 2017 WL 589251, at *3 (M.D. Fla. 2017).Where plaintiff fails to submit evidence showing that its proposed method is viable, and instead “merely speculates” that defendant’s records would be “useful” for identifying class members.
Riffle
v. Convergent Outsourcing, Inc.
, 311
F.R.D
. 677, 681 (
M.D. Fla. 2015).
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