Ohio Supreme Court Rules that a Plaintiff Cannot Maintain a Class Action under the OCSPA without Proof that all Proposed Class Members were Injured

In order to certify a class action under Ohio law, a plaintiff must satisfy all the requirements set forth in Civ. R. 23(A) (numerosity, commonality, typicality and adequate representation) and one of the three requirements set forth in Civ. R. 23(B). In Felix v. Ganley Chevrolet, Inc., Case No. 2015-Ohio-3430, the Ohio Supreme Court held the Civ. R. 23 analysis may also require the plaintiff to demonstrate the existence of actual injury casually related to the defendant’s conduct to each of the class members when the class action is predicated on a consumer statute which imposes such a requirement.

The Felix decision overturned the certification of a class action under the Ohio Consumer Sales Practices Act (“OCSPA”). The class action claim was premised on the claim that the defendant’s offending conduct (the use of an arbitration provision contained in a purchase agreement) harmed the class members by failing to provide information relevant to the arbitration process at the time it was due. The Felix court’s reversal of the class certification was premised upon two separate and distinct findings: (1) the court reiterated that a trial court should probe the underlying merits of a plaintiff’s case in the context of evaluating whether the plaintiff has satisfied the requirements of Civ. R. 23; and (2) that a class action under the OCSPA requires proof of actual damages to all class members casually related to the meaning that defendant’s conduct in issue. The Felix court found that the trial court’s conclusion that the mere failure to provide information required under a statute was “at best, inchoate” and could not satisfy the plaintiff’s requisite burden of proving “actual damages” to the class members as required under the OCSPA. In so holding, the Supreme Court noted the distinction in the analysis as to the existence of “damage in fact” versus the inquiry into actual damages. The fact of damages pertains to the existence of injury as a predicate to liability while the analysis of actual damages involves the quantum of injury and the amount of damages incurred by each class member. Id. at ¶ 33.

The Ohio Supreme Court’s decision in Felix is significant, as plaintiffs often seek to create class actions under consumer statutes based upon a technical violation of a statutory provision which does not, in and of itself, give rise to a discernable injury to the class members. The Felix case stands for the proposition that if the consumer statute requires proof of damages casually related to the offending conduct in order to participate in the statutory remedy, a plaintiff must provide the court with proof of common damages sustained by the entire class. Moreover, proof of a loss of required information alone is insufficient to prove the existence of the fact of damages. Although the Felix decision was focused on a class action remedy under the OCSPA, it is noteworthy that the Ohio Supreme Court’s analysis relied, in part, on decisions from other state courts which held that plaintiffs who bring private causes of action under various Consumer-Protection Statutes (including Consumer-Protection Statutes other than a Consumer Sales Practices Act), are required to plead and prove actual damages or injury.

This decision may well provide a viable basis to seek decertification of an existing class action under the Ohio Consumer Sales Practices Act and/or similar Consumer Statutes where there are issues as to whether the plaintiff has sufficiently established proof of actual damage to each of the proposed class members. Parties faced with this issue should also be aware that the U.S. Supreme Court has recently accepted jurisdiction of a certified conflict on the issue of whether standing may be bestowed on a plaintiff who pursues a class action absent proof that the class members suffered any concrete harm. Spokeo, Inc. v. Robins, U.S. Supreme Court Case No. 13-1339. This matter is currently in the briefing stage.

Should you have any questions as to how these decisions may impact any pending litigation you are involved with, please feel free to contact any member of our Environmental / Mass Tort / Class Action Practice Group.

This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel.