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Entries for category:   Ohio Class Action Law

 
Feb 24, 2014

Ohio Supreme Court to Address No-Injury Class Certification Under the Consumer Sales Practices Act
 

On February 19, 2014, the Supreme Court of Ohio, in a 4-3 ruling, accepted the discretionary appeal in Felix v. Ganley Chevrolet, Inc. on two propositions of  law: 1) a class action cannot be maintained on behalf of a putative class that includes individuals who did not sustain actual harm or damage as a result of the challenged conduct, which is a required part of the rigorous analysis under Ohio R. Civ. P. 23; and 2) in a class action brought under the Ohio Consumer Sales Practices Act, R.C. 1345.09(B) requires the consumers to have sustained actual damages as a result of the challenged conduct.

In Ganley, the trial court certified a class that included any person who purchased a car from a group of auto dealerships if their contract included an arbitration clause that the court previously found invalid. The trial court then awarded each class member $200 in “discretionary damages,” even though the legislature explicitly limited class actions to actual damages, and it included in the class those who never had a dispute with the dealer. The Eighth District affirmed the trial court.

Bricker & Eckler represented the Ohio Association of Civil Trial Attorneys (OACTA), which submitted an amicus memorandum in support of jurisdiction for both propositions of law that the court accepted.


 
Posted by A. Haque in  Ohio Class Action Law   |   Permalink

 

Nov 18, 2013

Stammco: A Primer on the New Era of the Ohio Class Action
 

The Ohio Supreme Court has decided the first in a trilogy of cases addressing Civil Rule 23 — its first foray into class action law since the landmark decision in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___, 131 S. Ct. 2541, 180 L. Ed. 2d. 374 (2011). In Stammco, L.L.C. v. United Telephone Company of Ohio, 2013-Ohio-3019, 2013 Ohio LEXIS 1682, the Ohio Supreme Court resoundingly endorsed Dukes and the applicability of federal law as an interpretive aid for Ohio Rule 23. Further, the Court adopted the Seventh Circuit’s formulation of a “fail-safe class,” and clarified that class certification is subject to “rigorous analysis,” which requires plaintiffs to prove compliance with Rule 23 and may include probing the merits of the plaintiffs’ claims. One wonders what more there is to say in the remaining two cases on the Court’s docket. Now that the Court has denied the plaintiff’s motion to reconsider the decision, there is no doubt that Stammco is here to stay. For more, read the full article.


 
Posted by D. Campbell in  Civil Rule 23 Requirements  Ohio Class Action Law  Wal-Mart v. Dukes   |   Permalink

 

Nov 06, 2013

Ohio Supreme Court Reverses Class Certification
 

On November 5, 2013, the Ohio Supreme Court issued the second in a trilogy of decisions involving class actions in the Dukes v. Wal-Mart era. In Cullen v. State Farm Mutual Automobile Insurance Company, the Court reversed the Eighth District Court of Appeals, and ruled that the action did not satisfy Rule 23(B)(2) because injunctive relief was only incidental to the monetary relief sought, or Rule 23(B)(3) because a rigorous analysis demonstrated that individual questions predominate over issues common to the class. We will be reporting more about this case in the days ahead.


 
Posted by D. Campbell in  Civil Rule 23 Requirements  Ohio Class Action Law  Wal-Mart v. Dukes   |   Permalink

 

Aug 13, 2013

Stammco Defendants Respond to Motion for Reconsideration
 

Last week, the Defendant-Appellants United Telephone of Ohio (UTO) and Sprint Nextel Corporation filed their memorandum contra Stammco’s motion for reconsideration in Stammco v. United Telephone Company of Ohio, Slip Opinion No. 2013-Ohio-3019.

In their brief, UTO and Sprint noted that Stammco’s motion is “little more than a request for yet another chance to seek class certification in the trial court.” 

The memorandum contra notes that the Court’s Stammco decision is in line with the U.S. Supreme Court’s recent decisions in Wal-Mart Stores, Inc. v. Dukes and Amgen v. Connecticut Retirement Plans & Trust Funds and with other “cramming” cases across the country.

The memorandum contra further addresses each of Stammco’s arguments and explains why the Court’s decision was not in error. 

For example, UTO and Sprint explain that: (1) the Court’s analysis under Civil Rule 23(B)(3) is correct because the Court of Appeals found that “Civ.R. 23(B)(2) is unavailable for [Stammco’s] claims,” and Stammco never appealed; (2) the predominance issues were “repeatedly briefed and argued by both parties in the trial and appellate courts below” and (3) the final Stammco decision is consistent with the constitutional duty to “administer justice ‘without denial or delay.’”

We will continue to follow the Ohio Supreme Court’s decisions in this case and report back here on the blog.


 
Posted by B. Purdue Riddell in  Civil Rule 23 Requirements  Ohio Class Action Law   |   Permalink

 

Jul 25, 2013

Stammco Plaintiffs File a Motion for Reconsideration of the Ohio Supreme Court’s Decertification Order
 

We reported last week that the Ohio Supreme Court issued a 5-2 decision in Stammco v. United Telephone Company of Ohio, Slip Opinion No. 2013-Ohio-3019, reinstating the trial court’s order overruling plaintiffs’ motion to amend the class and rejecting plaintiffs’ proposed amended class definition, effectively decertifying the plaintiffs’ proposed class action lawsuit.

On July 24, 2013, Stammco and the other plaintiff-appellees filed a motion for reconsideration asking the Court to reconsider its decertification decision and to remand (again) to the trial court to reconsider class certification.   In their motion, plaintiffs point out several findings of the Court that plaintiffs believe to be in error. 

For example, plaintiffs argue that the Supreme Court’s decision was in error because it unconstitutionally decided issues of fact and improperly based its rejection of the amended class definition on the merits of the claims at issue.  Moreover, plaintiffs argue that the Court’s decision was “based on a finding that the proposed class cannot satisfy the predominance requirement of Civ. R. 23(B)(3), even though Plaintiffs sought certification under Civ.R. 23(B)(2) AND . . . the question of predominance was neither briefed, nor decided as an issue before the appellate court below.” (Motion, at 2.) 

Appellant United Telephone Company of Ohio’s memorandum in response is due within 10 days.


 
Posted by D. Campbell in  Civil Rule 23 Requirements  Ohio Class Action Law   |   Permalink

 

Jul 16, 2013

The Supreme Court of Ohio Rules in Stammco v. United Telephone Company of Ohio that Trial Courts Must Conduct a Rigorous Analysis to Ensure Civil Rule 23 Perquisites are Satisfied
 

In a 5-2 decision released today, the Supreme Court of Ohio ruled that trial courts must “conduct a rigorous analysis, which may include probing the merits of plaintiffs’ claims, to ensure that the prerequisites of Civ.R. 23 are satisfied.” The Supreme Court of Ohio reversed the Sixth District Court of Appeals decision in Stammco v. United Telephone Company of Ohio and reinstated the trial court’s order that rejected plaintiffs’ amended class definition, holding that “[e]ven though the trial court’s consideration of the merits here was improper, its order denying certification of the class was correct because plaintiffs’ proposed amended class does not satisfy the prerequisites of Civ.R. 23.” 

You can find the full decision here.  Check back later for further analysis.


 
Posted by A. Haque in  Civil Rule 23 Requirements  Ohio Class Action Law   |   Permalink

 

May 24, 2013

OSBA Class Action Roundup: The Latest Developments in State and Federal Court
 

Class action jurisprudence evolved significantly as a result of two recent landmark decisions by the U.S. Supreme Court — Wal-Mart Stores, Inc. versus Dukes and AT&T Mobility LLC versus Concepcion. Join Drew Campbell, partner in the Class Action group at Bricker & Eckler LLP, and other experts for OSBA's Class Action Roundup: The Latest Developments in State and Federal Court CLE on June 25 in Columbus, where they will provide a practical overview of the latest class action cases from Ohio, the Sixth Circuit and the U.S. Supreme Court.


 
Posted by D. Campbell in  Bricker Class Action Events  Ohio Class Action Law  Sixth Circuit Class Action Law  U.S. Supreme Court  Wal-Mart v. Dukes   |   Permalink

 

May 17, 2013

Ohio Consumer Class Actions No Longer Mired in (Low-) Tar Pit?
 

In light of the recent decision in Phillips v. Philip Morris Companies Inc., class action lawsuits alleging violations of consumer sales and deceptive trade practices laws — which have grown in popularity in recent years — are likely to become much less popular in Ohio. Bricker & Eckler partner Anne Marie Sferra and associate Kara Herrnstein recently authored an article for the Legal Opinion Letter of the Washington Legal Foundation on how the March 2013 Ohio federal district court decision demonstrates that state "deceptive practices" statutes modeled after the federal Lanham Act — like the Ohio Deceptive Trade Practices Act (DTPA) — likely will not support a consumer class action, and that such actions must still meet the requirements of the Ohio Consumer Sales Practices Act (CSPA). For more, read the full article.


 
Posted by A. Sferra in  Federal Class Action Law  Ohio Class Action Law   |   Permalink

 

Mar 08, 2013

Ohio Supreme Court Hears Oral Argument in State Farm Class Action
 

Recently, the Ohio Supreme Court heard oral argument in Cullen v. State Farm. We previously discussed this case here.

Here is a quick primer on the facts of the case. In March 2003, Mr. Cullen’s windshield was chipped by a stone — damage that was covered under his auto policy with State Farm. In exchange for State Farm waiving his deductible, Cullen agreed to have the crack repaired rather than to replace the entire windshield. Because the deductible was waived, the $50 repair was free.

In the subsequent class action lawsuit, Cullen claims he was misled. He says he was steered by State Farm’s third party representative to repair the crack and was never told that he could have gotten a “pay-out” for a replacement windshield. He seeks to represent at least 100,000 State Farm insureds in Ohio who filed glass-only windshield repair claims since 1991.

The trial court certified the proposed class and Ohio’s Eighth Appellate District affirmed. Central to the court’s theory of certification was its statement that “[c]lass certification does not go to the merits of the claim.” Cullen v. State Farm Mut. Ins. Co. 8th Dist. No. 95925, 2011-Ohio-662, at ¶ 55. The Cullen court thus appeared to limit its analysis to the plaintiffs’ allegations and declined to consider merits issues.

For more, read the full story.


 
Posted by B. Group in  Civil Rule 23 Requirements  Insurance Industry  Ohio Class Action Law  Wal-Mart v. Dukes   |   Permalink

 

Feb 06, 2013

Ohio Supreme Court Hears Oral Argument in Potentially Landmark Class Action Case
 

The Ohio Supreme Court heard oral argument Wednesday morning in the potentially landmark Ohio class action case Stammco v. United Tel. Co. of Ohio, Ohio Supreme Court Case No. 2012-016912-0169. We have previously discussed the facts of this case, the appellants’ merit brief and the appellees’ merit brief.

Briefly, Stammco alleges that Sprint engaged in the practice of “cramming,” or causing unauthorized charges to be placed on their customers’ telephone bills. The proposed class includes Stammco and other Sprint customers who were subjected to these allegedly unauthorized charges.

This case has been pending for more than eight years and has already made one trip to the Ohio Supreme Court. In Stammco’s first trip to the Ohio Supreme Court in March 2010, the Court reversed class certification, holding that the class as defined was ambiguous and not readily identifiable. The Court then remanded the case, tasking the trial court with redefining the class.

On remand, the trial court denied class certification, holding that: (1) plaintiffs' revised class definition was failsafe, (2) the action was brought against the wrong party, and (3) the action imposed a duty on UTO and Sprint that was not required by law.

The Sixth District Court of Appeals reversed, relying on Ojalvo v. Bd. Of Trustees of Ohio State Univ., 12 Ohio St.3d 230, 466 N.E.2d 875, holding that any consideration of merits issues in deciding class certification is erroneous.

At oral argument, Michael Farrell for appellant Sprint argued that the class definition — even if no longer ambiguous — still results in an unidentifiable class. He explained that ambiguity and identifiability are related — but distinct — issues. His example was this: a class definition that includes all people who visited Columbus in 2012 is not ambiguous, but it is, nonetheless, impossible to identify every single person who entered the city of Columbus in a given year. An unambiguous, yet unidentifiable class.

Here, Farrell noted, determining whether a particular charge was “authorized” is a complicated question that has, in the named plaintiff’s case, taken two depositions and written discovery to determine — and it is still an open question. Further, Farrell noted that if the class is not certified, customers do have a remedy in small claims court.

Dennis Murray for appellee Stammco argued that the trial court here improperly made two critical merits determinations, which he says is prohibited by the Court’s precedent. Murray also distinguished the U.S. Supreme Court’s recent WalMart v. Dukes case, noting that Dukes was decided in the employment context and involved thousands of individual employment decisions. 

When asked by Justice Lanzinger whether any prior cramming cases had been certified across the country, Murray responded that the only certified cases were in the context of a settlement. Farrell, on the other hand, noted that no contested cramming cases have been certified.

Finally, Murray argued that the class is identifiable by simply reviewing Stammco’s records. Stammco’s records, he says, will demonstrate who was charged, which customers complained and each instance in which a charge was reversed. This information can then be crunched by statisticians to determine how many customers likely had unauthorized charges on their bills. Murray further pointed to an FCC investigation in which Sprint purportedly admitted that its records would reflect which customers were overcharged and refunded.

In his rebuttal, Farrell objected to the use of a statistical sample to determine liability, noting that such a procedure violates the due process rights of both the defendant and absent class members. Further, he challenged the Court to clarify its decision in Ojalvo in light of the Dukes case with regard to when a trial court can consider merits issues in a class action context. Justice Pfeiffer had the last word, noting that the Court “accepted the challenge.”

We will now await the Court’s decision and will report on the decision and its potential impact on Ohio class action jurisprudence once the decision is released.


 
Posted by B. Group in  Ohio Class Action Law   |   Permalink

 

Feb 05, 2013

Lack of Injury Sinks Class Over Tainted Water Supply
 

The Twelfth District Court of Appeals for the State of Ohio recently overturned the Preble County Court of Common Pleas’ decision to certify a class in a highly disputed case pertaining to the water supply for the Village of Camden. The appellate court ruled that the trial court abused its discretion when it certified a class comprised of everyone who resided in Camden for the period of time of August 1, 2010, to present in connection with claims against the alleged defilers of the Camden water supply. 

The case, George, et. al., v. R. Good Logistics, LLC, 12th District Nos. CA 2012-06-008, CA 2012-06-009 and CA 2012-06-010, 2013-Ohio-16 (Jan. 7, 2013), arose out of the road de-icing salt operation maintained by the defendant, R. Good Logistics, LLC.

For more, read the full story.


 
Posted by C. Ernst in  Civil Rule 23 Requirements  Class Definitions  Ohio Class Action Law   |   Permalink

 

Dec 17, 2012

Ohio Supreme Court Grants Summary Judgment to KeyBank in Class Action Case
 

The Ohio Supreme Court recently ruled on a putative class action case that is instructive for the defense of class action lawsuits in Ohio. In JNT Properties v. KeyBank National Association, 2012-Ohio-5369, the Ohio Supreme Court reversed the court of appeals and affirmed the trial court’s grant of summary judgment in favor of KeyBank on all class claims.

JNT Properties filed a putative class action, alleging that KeyBank had breached its contract by charging interest in excess of the rate stated in its promissory note. JNT claimed that KeyBank was charging more interest than was agreed to in the note by charging a rate calculated by the 365/360 method rather than an annual rate. KeyBank contended that the note fixed the interest rate according to the 365/360 method, which, by definition, results in a borrower paying more interest than when interest is calculated according to the annual 365/365 method.

KeyBank moved for summary judgment, which the trial court granted, finding that the note was clear in establishing the 365/360 method for calculating interest and that JNT presented no evidence that it had not consented to that method. The court of appeals reversed, concluding that there was a genuine issue of material fact as to which interest rate was imposed by the note.

The Ohio Supreme Court reversed the appellate court’s ruling, granting summary judgment to KeyBank, finding that the clause establishing the 365/360 method — although inartfully drafted — was not ambiguous.

This case is instructive for class action practice in that this putative class matter was decided as a matter of law. As we have previously discussed, there can be no class where there is no claim.

As in JNT Properties, early and effective motion practice can eliminate the need for — and the risks associated with — extensive class discovery. Legal defenses to class claims — including novel theories of contract interpretation — should be raised at the earliest possible point in the proceedings. 


 
Posted by B. Group in  Banking Industry  Ohio Class Action Law   |   Permalink

 

Dec 12, 2012

United States District Court for the Northern District of Ohio Addresses National Banking Act Preemption
 

In a class action lawsuit brought before the United States District Court for the Northern District of Ohio, the court recently ruled on preemption issues pertaining to the Ohio Retail Installment Sales Act (RISA) and the Ohio Uniform Commercial Code (OUCC), insofar as they pertain to motor vehicle repossession. The court held that these provisions are not preempted by the National Banking Act (NBA) and as a result, may serve as a basis for liability going forward. 

In White v. Wells Fargo Bank, N.A., (United States District Court of Ohio, Case No. 1:12 CV 943), Judge Dan Polster determined that there is no preemption of RISA and OUCC by the NBA in repossession activities. In this case, the plaintiff’s vehicle was repossessed by the defendant, but the defendant failed to comply with certain provisions of RISA and OUCC. As a result, the plaintiff instituted litigation and sought class certification to include others similarly harmed. Wells Fargo argued that provisions of the NBA preempted the Ohio law under which the plaintiff brought litigation. 

The court analyzed the express preemption, field preemption and obstacle preemption arguments put forward by the defendant. Each was rejected. The court held that repossession notices are not “other credit-related documents” related to “disclosure and advertising.” Had the court determined the contrary, an express preemption would have been likely. This ruling mirrors similar cases in the 9th Circuit and 4th Circuit. On the issue of field preemption, the court, again following the 9th Circuit, held that the Office of Thrift Supervision does not pertain to the field of debt collection. Lastly, the court determined that debt collection activities are distinctly different from lending operations and as a result, there was no obstacle preemption that was applicable. The court took the extra step of noting that “a bank cannot, on the one hand, avail itself of the right to repossess a vehicle under state law and then, on the other hand, disclaim the applicability of that very law by arguing it significantly interferes with its ability to engage in the business of banking.” White v. Wells Fargo Bank, N.A., at 13. 

Wells Fargo also argued that RISA does not regulate transactions between consumers and financial institutions. The court rejected this argument, noting that RISA does apply to third-party transactions and, given that the financing was originally provided for by the car dealer who subsequently assigned that interest to Wells Fargo, this was a three-party transaction.

This ruling drew a distinct line in the sand between federal banking regulations and applicable state laws. Because of this, similar claims, including class action claims, can reasonably be expected going forward. Creditors need to be mindful of the role of state laws as they engage in such recovery actions. Relying on preemption arguments will, likely, no longer provide a safe harbor.


 
Posted by C. Ernst in  Banking Industry  Ohio Class Action Law   |   Permalink

 

Nov 20, 2012

Ohio’s Eighth District Court of Appeals Affirms Dismissal of Class Claims in Death Master File Case
 

In February, we published an article discussing the trial court’s decision in Andrews v. Nationwide Ins. Co., Cuyahoga Co. Case No. CV-11-756463 (McMonagle, J.). The issue in Andrews was whether Nationwide is required to take proactive measures to annually and independently search the Death Master File to determine whether any of its insured’s beneficiaries has a claim for life insurance proceeds. 

The trial court held that (1) the plaintiffs lacked standing to bring these claims because their injuries were too speculative — i.e., they were contingent on a number of future events that may never occur — and (2) the life insurance policies at issue were clear, requiring that death benefits could be paid only “upon receiving proof that the Insured died” and “immediately upon receipt of the death” of the insured. 

On appeal, the Eighth District Court of Appeals recently affirmed dismissal. Unlike the trial court, the Court of Appeals did not base its decision on the plaintiffs’ lack of standing. Rather, the court affirmed the trial court’s grant of Nationwide’s Rule 12(b)(6) motion to dismiss based on the express terms of plaintiffs’ life insurance contracts.

Both the plain language of the life insurance policies at issue and established Ohio law place the burden of furnishing proof of death on the beneficiary or claimant — not on the insurance company.
 
As noted in our prior article on this case, the Andrews case stands as authority for the proposition that legal defenses to class claims can — and should — be raised at the earliest possible point in the proceedings. Contract interpretation issues like this one may be addressed as a matter of law and may be decided before a class certification decision is made.


 
Posted by B. Group in  Insurance Industry  Ohio Class Action Law  Pre-Certification Motions   |   Permalink

 

Oct 04, 2012

Appellees File Merit Brief in Stammco v. United Telephone Company of Ohio
 

As we have written about previously here and here, the facts of Stammco involve the Stammco Appellees’ claim that they received third-party charges on their telephone bills for services they did not want or use.

In Stammco I, the Ohio Supreme Court reversed certification of a class defined as those who received these third party charges "without their permission" because this phrase was ambiguous and the class members were not readily identifiable.  To identify class members, the trial Court would have had to individually determine whether and how each prospective class member had “authorized” the third-party charges. 

On remand, Stammco presented a new class definition that replaced “without their permission” with: “no prior authorization from the customer in writing or by a method acceptable to Sprint.”  After taking evidence, briefing and conducting an oral hearing, the trial Court denied certification finding that (1) the revised class definition was failsafe, (2) the action was brought against the wrong party, and (3) the law did not impose a duty upon UTO/Sprint to obtain authorization for third party charges.  

The Sixth District reversed the denial of certification, finding that (1) the revised definition was neither failsafe nor ambiguous, and (2) the trial Court’s findings on the merits were improper as they did not relate to any determination of Civil Rule 23. 

In their merit brief, the Stammco Appellees argue that the Sixth District's ruling is not at odds with Wal-Mart v. Dukes, as appellants UTO and Sprint contend.  Stammco recognizes that determinations, with respect to the merits of its claims, are proper as to class certification when examined in order to determine if the requirements of Civil Rule 23 are met. 

However, Stammco argues, the trial court did not analyze the Rule 23 requirements noting that review of the merits is only permitted to the extent necessary to determine whether a class exists under Rule 23.  Because the trial Court did not analyze the Rule 23 factors, and the merits issues considered had “no connection” with the Rule 23 factors, Stammco argues, no merits issues should have been considered at all in the trial Court.  Appellees’ Merit Brief, at 27.  Thus, Stammco writes, the Sixth District’s decision is in harmony with Wal-Mart v. Dukes, 131 S.Ct. 2451 (2011), Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974) and Ojalvo v. Board of Trustees of Ohio State University, 12 Ohio St.3d 230 (1984).  Id. at 23.

Stammco argues that to accept UTO/Sprint’s interpretation would be an “essential change to the nature of class certification” requiring merits inquiries at the class certification stage, even when those inquiries “would not address the elements of class certification.” Appellees’ Merit Brief, at 23.

Finally, Stammco addresses UTO/Sprint’s analysis of the Rule 23 factors, concluding that each of the factors is satisfied.  The key common question is whether “Sprint’s failure to procure authorization from the customer before billing [a] third-party charge breach[es] any duty . . . .”  Appellees’ Merit Brief, at 28.  Further, this common question regarding UTO/Sprint’s obligation to its customers predominates over any individual issues. Id.  Moreover, Stammco argues, the revised class definition is not failsafe because whether the charges were "authorized" by the consumer does not answer the question whether Sprint is liable.

Oral argument has not been set in the case.  Stay tuned for further coverage of Stammco and other Ohio Supreme Court class action matters as they continue to progress through the Court. 


 
Posted by B. Group in  Ohio Class Action Law   |   Permalink

 

Aug 16, 2012

Appellants UTO and Sprint challenge Ohio Supreme Court precedent in their merit brief in Stammco v. United Tel. Co. of Ohio
 

On August 14, 2012, appellants United Telephone Company of Ohio (UTO) and Sprint filed their merit brief in Stammco v. United Tel. Co. of Ohio, Ohio Supreme Court Case No. 2012-0169.

UTO and Sprint’s proposition of law at issue in the appeal is this:  

“A trial court does not abuse its discretion by evaluating the merits of the plaintiffs' claims when considering class certification.”

In support of this proposition, UTO and Sprint make four primary arguments.

First, appellants urge the Court to follow the U.S. Supreme Court’s recent decision in Wal-Mart rejecting the notion that merits issues cannot be considered at the class certification stage.

Appellants assert that Ohio courts have for decades misunderstood Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974), to prohibit any consideration by the trial court of merits issues when ruling on class certification. Based on Eisen, the Ohio Supreme Court ruled in Ojalvo v. Bd. of Trustees of Ohio State Univ., 12 Ohio St.3d 230, 233 (1984) that class certification "does not go to the merits." Id.  (Appellant’s brief, at 16.) Since then, appellants argue, Ohio courts have mistakenly — and repeatedly — cited Ojalvo, Eisen, or both, as barring any consideration of merits issues at the class certification stage.

But, appellants argue, in the recent Wal-Mart decision, the U.S. Supreme Court rejected once and for all Ojalvo's reading of Eisen “and with it the mistaken notion that merits issues have nothing to do with class certification.” (Id. at 17.) Rather, the Wal-Mart Court recognized that consideration of the merits (i.e. consideration of what the law requires plaintiffs to prove, and whether that can be proven for all class members in one stroke) is both appropriate and necessary. (Id.)

Thus, appellants assert, the Sixth District Court of Appeals should have followed the reasoning of Wal-Mart — and not Eisen or Ojalvo — and affirmed the trial court’s consideration of certain merits issues in making its decision to deny class certification.

Second, appellants make the fact-specific argument that the trial court properly considered certain merits issues as each of these merits issue impacted whether the Rule 23 requirements were satisfied.

Third, appellants assert that the class definition proposed by appellees is flawed. Appellants cite the trial court’s concern that determination of “consent” and “authorization” for certain charges would not permit class members to be identified with a reasonable amount of effort. UTO’s records, for example, would not show whether customers received charges they claim were “not authorized,” or whether in fact any particular charge was “not authorized” by the customer.

Finally, appellants assert that from a factual perspective, there are no common issues of law or fact, individualized issues predominate, the class is unmanageable, and the plaintiffs lack standing because the named plaintiffs did not receive or pay certain charges included the class definition.

Stay tuned for further coverage of the Ohio landscape as these important cases continue to make their way through Ohio’s highest court.


 
Posted by B. Group in  Civil Rule 23 Requirements  Ohio Class Action Law  Wal-Mart v. Dukes   |   Permalink

 

Aug 06, 2012

Ohio Supreme Court to consider fundamental class action issues
 

As discussed in a prior article, the Ohio Supreme Court recently considered four jurisdictional memoranda raising fundamental challenges to class action law in Ohio.  The Court has now made its jurisdictional decisions in each case.

First, the Court has accepted jurisdiction in Cullen v. State Farm and will consider a wide range of fundamental class action issues in that appeal, including the role of Daubert at the class certification stage and the parameters of a proper class definition.

Second, after initially declining jurisdiction, the Court granted reconsideration and has accepted jurisdiction on the first proposition of law in Stammco v. United Tel. Co. of Ohio, and will consider a prior decision regarding evaluating the merits of class claims in light of the U.S. Supreme Court’s recent decision in Wal-Mart v. Dukes.

Third, after initially declining jurisdiction, the Court granted Appellant’s motion for reconsideration in Ford Motor Credit Co. v. Agrawal.  However, the Court ordered that the cause be held for the decision in Cullen v. State Farm, and that the briefing schedule be stayed.

Finally, after initially declining jurisdiction, the Court granted Appellant's motion for reconsideration in Wolfe v. Grange Indemnity Ins. Co.  However, as in Agrawal, the Court ordered that the cause be held for the decision in Cullen and that the briefing schedule be stayed.

We will be closely watching each of these cases as they continue to unfold and as the Court nears its decisions.

Cullen v. State Farm Mut. Auto. Ins. Co.,
Ohio Supreme Court Case No. 2012-0535

We previously discussed the facts of Cullen and the Eighth District Court of Appeal's decision affirming class certification here

The Ohio Supreme Court accepted jurisdiction on June 20, 2012.  The following propositions of law proposed by Appellant State Farm will be at issue on appeal:

  1. In Ruling on Class Certification, Courts May and Should Examine Merits Issues that Are Relevant to the Civil Rule 23 Requirements.
  2. The Lower Courts' Reliance on Plaintiffs Proposed Expert Testimony as a Basis for Class Certification Was an Abuse of Discretion in the Absence of an Adjudication of State Farm's Daubert Challenges.
  3. A Class Definition May Not Condition Class Membership on Disputed, Individual Elements of Liability.
  4. Plaintiffs Assurance that Unspecified, Hypothetical Computer Algorithms Can Be Used to Identify Class Members Does Not Satisfy the Requirement that Class Members Can Be Identified with Reasonable Effort.
  5. Where Class Members Not Only Heard Allegedly Scripted Statements, But Had Individual Unscripted Discussions and Were Influenced by Other Individual Considerations, Individual Questions Predominate.
  6. It Is an Abuse of Discretion to Certify a Subclass Without a Representative Who Is a Member of the Subclass.
  7. Rule 23(B)(2) Does Not Authorize Class Actions Where the Named Plaintiff Lacks Standing to Seek Declaratory or Injunctive Relief or Where the Relief Sought Merely Lays a Basis for Money Damages.

The record was filed in the case on July 9, 2012.  We will be closely following the briefing, argument and decision in this case as it is likely to have a significant impact on class action jurisprudence in Ohio.

Stammco v. United Tel. Co. of Ohio,
Ohio Supreme Court Case No. 2012-0169

In June 2005, Stammco filed a class complaint against United Telephone Company of Ohio ("UTO") and Sprint Nextel Corporation, alleging that Stammco and other customers of UTO and Sprint had been damaged by UTO and Sprint's negligent acts and billing practices. Specifically, Stammco alleged that UTO and Sprint had engaged in the practice of “cramming,” or causing unauthorized charges to be placed on their customers’ telephone bills.

The trial court granted Stammco’s motion for class certification, and the Sixth District Court of Appeals affirmed.  In Stammco’s first trip to the Ohio Supreme Court in March of 2010, the Court reversed class certification, holding that the class as defined was not readily identifiable.   The Court, then, remanded the case tasking the trial court with redefining the class.

On remand, the trial court denied class certification, holding that: (1) Plaintiffs' revised class definition was failsafe, (2) the action was brought against the wrong party, and (3) the action imposed a duty on UTO and Sprint that was not required by law. 

The Sixth District Court of Appeals reversed, relying on Ojalvo v. Bd. Of Trustees of Ohio State Univ., 12 Ohio St.3d 230, 466 N.E.2d 875, holding that any consideration of merits issues in deciding class certification is error. But Appellants point out in their jurisdictional memo that the U.S. Supreme Court's recent decision in Wal-Mart v. Dukes, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011), "now makes it clear that Ojalvo was wrongly decided."

The Court accepted jurisdiction on June 20, 2012 as to Appellants UTO and Sprint's first proposition of law:

"Wal-Mart v. Dukes Rejects Ojalvo's Incorrect Reading of Eisen: A Trial Court Does Not Abuse Its Discretion By Evaluating The Merits Of The Plaintiffs' Claims When Denying Class Certification."

Ford Motor Credit Co. v. Agrawal,
Ohio Supreme Court Case No. 2012-0462

We previously discussed the facts of Agrawal and the Eighth District's decision affirming class certification here

On appeal to the Ohio Supreme Court, Ford Credit requested that the Court accept jurisdiction on the following proposition of law: "Claims for breach of contract, fraud, and nondisclosure involving a standardized contract cannot be certified as a class action when individualized inquiries are necessary to determine (a) whether each claimant's contract was actually violated or misrepresented, and (b) whether each claimant suffered economic harm as a result."

The Court declined jurisdiction on June 6, 2012.  Ford Credit filed a motion for reconsideration on June 15, 2012.  On July 25, 2012, the Court granted Ford Credit’s motion for reconsideration, but ordered that the cause be held for the decision in Cullen v. State Farm, and that the briefing schedule be stayed.

Wolfe v. Grange Indemnity Ins. Co.,
Ohio Supreme Court Case No. 2012-0497

We previously discussed the facts of Wolfe and the Eighth District's decision affirming class certification here

The Ohio Supreme Court declined jurisdiction on June 6, 2012.  Grange filed a Motion for Reconsideration on June 15, 2012.  The Ohio Chamber of Commerce also filed a Memorandum in Support of Reconsideration as amici curiae in support of Grange's motion. 

On July 25, 2012, the Court granted Grange's motion for reconsideration, and accepted Grange's first proposition of law:

"Civ. R. 23 requires the party moving for class certification to offer evidence of compliance with commonality, typicality, and the other criteria of Rule 23 and further requires the court hearing the action to evaluate the evidence presented by the parties to determine whether the rule's criteria in fact have been met, even if the court's evaluation touches upon the merits of the underlying claims sought to be certified for class action treatment."

As in Agrawal, however, the Court held the cause for the decision in Cullen v. State Farm Mutual and stayed the briefing schedule.

Stay tuned as we continue to monitor each of these cases as they move their way through Ohio’s highest court.


 
Posted by B. Group in  Civil Rule 23 Requirements  Expert Testimony  Insurance Industry  Ohio Class Action Law  Wal-Mart v. Dukes   |   Permalink

 

May 29, 2012

Will the Ohio Supreme Court visit aisle 23 at Wal-Mart?
 

Since June 2011, federal courts have been unpacking the lessons set forth in Wal-Mart Stores, Inc. v. Dukes, __ U.S. __, 131 S. Ct. 2541 (2011). Depending on your point of view, Wal-Mart either changed the face of class action jurisprudence or simply confirmed a trend decades in the making.

Perhaps the most important contribution of the case is how it modeled the analysis that courts everywhere — including Ohio — have struggled with: should a court resolve issues of fact at the class certification stage, even if they touch on the merits of the plaintiffs’ claims? And, if so, what is the plaintiffs’ burden of proof? 

The Ohio Supreme Court currently has four jurisdictional memoranda pending that raise fundamental challenges to class action law in Ohio. Each asks the Court to affirmatively adopt Wal-Mart and its analytical principles. 

This article will briefly explore two of these cases, Cullen v. State Farm Mut. Ins. Co. and Wolfe v. Grange Indem. Ins. Co., focusing on a single issue common to both that arises time and again in the lower courts: what is a “rigorous analysis,” and what is a plaintiff’s burden at the certification stage under Ohio Rule 23?  


 
Posted by D. Campbell in  Civil Rule 23 Requirements  Insurance Industry  Ohio Class Action Law  Wal-Mart v. Dukes   |   Permalink

 

May 17, 2012

Certification battle in Ohio MERS class action heats up
 

On April 23, 2012, the plaintiff in State of Ohio ex rel. David P. Joyce, Prosecuting Attorney of Geauga County Ohio v. MERSCORP, Inc., et al., N.D. Ohio Case No. 1:11-cv-02474, filed its motion seeking an order certifying the action as a class action. The plaintiff is attempting to bring the case on behalf of all 88 Ohio counties for relief relating to the allegedly unlawful failure of MERS and its member institutions to record millions of mortgages and mortgage assignments throughout Ohio.

In response, the numerous defendants jointly filed both a motion to strike the class allegations, as well as a memorandum in opposition to the certification motion, asserting a litany of legal grounds as to why the case is not suitable for class adjudication. The principal argument advanced by the defendants against certification is that Geauga County and its prosecutor lack the legal authority to represent the interests of other Ohio counties.

However, on May 13, 2012, the federal court remanded the case to the Geauga County Court of Common Pleas, where the action was originally filed, finding that the requirements for diversity jurisdiction had not been satisfied. The question of class certification remains undecided at this time.

For more, read the full article.


 
Posted by D. Gibson in  Civil Rule 23 Requirements  Mortgage Lending Industry  Ohio Class Action Law   |   Permalink

 

Apr 17, 2012

Ohio Supreme Court examines Ford Motor Credit class
 

The Supreme Court of Ohio has been asked by Ford Motor Credit Company to accept jurisdiction over an appeal of an order certifying a nationwide class action challenging its inspection policy for lease-end vehicles. This case presents the Ohio Supreme Court with the opportunity to decide whether it will affirmatively adopt and apply the United States Supreme Court’s decision in Wal-Mart v. Dukes as the analytical standard for determining whether a class may be certified under Ohio law.
 
To read the full article, click here.


 
Posted by J. Schuck in  Ohio Class Action Law  Wal-Mart v. Dukes   |   Permalink

 

Mar 16, 2012

Sexual harassment class action thwarted
 

The Eighth Circuit Court of Appeals recently upheld the dismissal of a sexual harassment class action asserted by the Equal Employment Opportunity Commission (EEOC).  The EEOC filed its suit in September 2007, alleging that CRST Van Expedited, Inc. — one of the country’s largest interstate trucking companies — had subjected a group of similarly situated female employees to sexual harassment through its New-Driver Training Program. 

Certainly, this decision represents a legal victory for employers defending class action suits filed by the EEOC.  This decision, however, is also a cautionary tale of the significant burden and expense — five years of litigation and approximately $4.5 million in legal fees — associated with such suits, regardless of their outcome.

To read the full article, click here.


 
Posted by E. Stock in  Employment Litigation  Ohio Class Action Law   |   Permalink

 

Feb 09, 2012

Class of Ohio insureds lacks standing because of speculative injuries
 

Article III continues to grab headlines in class action litigation as one of the most potent barriers to class certification.  With increasing frequency, courts are asking whether class representatives — and the class members they seek to represent — have suffered injuries that are sufficient to satisfy the most fundamental test of Article III standing.  Class plaintiffs are being tossed out of court with ever increasing frequency because their damage claims are simply too tenuous to pass constitutional muster. 
 
Now, an Ohio court has weighed in on this issue.  In Andrews v. Nationwide Ins. Co., Case No. CV-11-756463 (McMonagle, J.), the Court of Common Pleas for Cuyahoga County dismissed class claims — on a Rule 12(B)(6) motion — brought by life insurance customers because it found the alleged injury was simply too speculative to satisfy the requirements of Article III. 
 
To read the full article, including guidance on the lessons emerging from the Andrews case, click here.


 
Posted by D. Campbell in  Insurance Industry  Ohio Class Action Law  Standing   |   Permalink

 

Dec 20, 2011

MERS sued in class action by Ohio counties
 

Mortgage Electronic Registration System, Inc. (commonly referred to as MERS) has been the subject of several class action lawsuits throughout the country.   MERS operates an electronic registry designed to track and record mortgage assignments in the county recorder offices in Ohio’s 88 counties.

The most recent MERS litigation involves a class action complaint filed by Plaintiff Geauga County, on behalf of itself and all other Ohio counties, alleging that MERS violated Ohio law by failing to properly record mortgage assignments, thus failing to pay county recording fees to Ohio county recording offices.  The Plaintiff further alleges that MERS’ failure to properly record mortgage assignments in a timely fashion created “gaps” in the mortgage recordation process.  The Plaintiffs also named as defendants financial institutions that contract with MERS.

In response to the class action filing, MERS simply stated that its registration system is legal and properly administered.

We will be monitoring this lawsuit as it progresses.


 
Posted by A. Sharett in  Mortgage Lending Industry  Ohio Class Action Law   |   Permalink

 

Nov 21, 2011

With fracing comes litigation: What Ohio courts can expect as horizontal drilling and hydraulic fracturing begin in Ohio
 

Amidst the uncertainty concerning the impact that hydraulic fracturing ("fracing") will have upon economy and the environment in Ohio, there is at least one thing that we can count on: there will be lawsuits. From lease disputes, to personal injury claims, to claims alleging diminution in property values, there is a wide array of civil litigation that will result as fracing practices begin in Ohio. 

Check out our recent article addressing some of the current litigation across the country concerning fracing, including a series of cases that have recently been filed in Ohio.
 
You can find the full article here.


 
Posted by D. Campbell in  Ohio Class Action Law   |   Permalink

 

Nov 17, 2011

E-Discovery spoliation sanction standards in Ohio state and federal courts: Differing culpable mental states
 

The No. 1 E-Discovery issue vexing businesses and other organizations today is how far to go in preserving evidence for litigation. Many large organizations are currently over-preserving huge quantities of electronically stored information, a practice they readily admit is a waste of time, effort, and money. This is especially true for those facing the prospect of litigation in which the plaintiffs or the issues are initially difficult to define, such as is often the case with class action and mass action litigation.

In a recent article, we discuss one of the primary drivers for this over-preservation of evidence -- the legal uncertainty created by differing jurisdictional standards for sanctions due to "spoliation," which is the loss of relevant evidence by a party who has a duty to preserve it. There is a deep jurisdictional split on the issue of what culpable mental state is necessary for a court to order a commonly sought spoliation sanction: an adverse inference instruction to the jury that evidence lost would have been helpful to the aggrieved party. Not only are federal jurisdictions split nationally on this issue but in states like Ohio there is a further split between state and federal courts.

The article discusses the standards applicable within the federal Sixth Circuit and the state of Ohio. Included is discussion of  Beaven v. United States DOJ,  in which the Sixth Circuit Court of Appeals adopted a new federal standard for the jurisdiction. This case may be of particular interest to those involved in class litigation as it involved 106 plaintiffs.

Click here for the Sixth Circuit decision.


 
Posted by G. Krabacher in  Discovery  Federal Class Action Law  Ohio Class Action Law   |   Permalink

 

Nov 07, 2011

Ohio federal court dismisses class/collective claims and compels arbitration in a recent FLSA class action brought against an insurance company
 

Enforcing the U.S. Supreme Court's recent decision in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011), the Northern District of Ohio recently dismissed all class/collective claims in an FLSA class action—enforcing the arbitration provisions of the parties’ employment agreement.   This decision is an important victory for employers and for the future of class action waivers for all companies in Ohio and throughout the country. 

In Fitzhugh v. American Income Life Insurance Company, Case No. 1:11-cv-005330-CAB (N.D. Ohio Nov. 3, 2011), a former insurance agent brought a class action complaint against American Income Life Insurance Company ("AIL"), alleging violations of the Fair Labor Standards Act.   Plaintiff alleged that she and others similarly situated were misclassified as independent contractors rather than employees in order to escape the minimum wage and overtime requirements of the FLSA. 

In response, AIL argued that Plaintiff’s employment agreement contained a broadly-worded binding arbitration provision, precluding her from pursuing class claims, as well as from bringing her individual claims in court.  Plaintiff's response was that the arbitration agreement was invalid for a variety of reasons, including that she received no instruction on the arbitration process when she began working, that the jury waiver was unclear and was not supported by sufficient consideration, and that the arbitration clause did not allow effective vindication of her statutory claim. 

Applying Texas law, the Court held that even if Plaintiff did not receive specific instruction on the meaning of the arbitration agreement, she was, as a factual matter, a college graduate and was, as a legal matter, "held to have known what words were used in the contract, to have understood their meaning, and to have comprehended the legal effect of the contract."  (Opinion, at 8.) 

Of most interest, though, is the Court's citation to the Supreme Court's recent decision in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011).   Plaintiff argued that if the arbitration agreement was upheld, the case should be arbitrated as a class/collective action.  The Northern District of Ohio Court disagreed.  Quoting Concepcion, the Court explained that "[r]equiring the availability of classwide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the [Federal Arbitration Act]."   (Opinion, at 11.)

The Court went on to explain that in Concepcion, the Supreme Court cited Stolt-Nielsen, S.A. v. Animal Feeds Int'l Corp. , 130 S.Ct. 1758 (2010), which involved an arbitration agreement that was silent on the issue of class or collective arbitration.   But in Stolt-Nielsen, the Court held that despite this silence, class arbitration should be disallowed because the "'changes brought by the shift from bilateral arbitration to class-action arbitration' are 'fundamental."  Stolt-Nielsen, 131 S.Ct. at 1776. 

Applying Concepcion and Stolt-Nielsen, the Fitzhugh Court found that—as in Stolt-Nielsen—the arbitration provision at issue was silent on the question of class or collective arbitration.  Thus, Plaintiff's class/collective claims should be dismissed, and the remaining individual claim referred to arbitration.  

Stay tuned for more discussion of cases in Ohio state and federal courts applying Concepcion and discussing the availability of class action waiver in arbitration agreements.


 
Posted by B. Purdue Riddell in  Employment Litigation  Insurance Industry  Ohio Class Action Law   |   Permalink

 

 

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