Ohio Supreme Court Rules Class Cannot be Certified Without Actual Damages Under Ohio’s Consumer Sales Practice Act
In a ruling yesterday in Felix v. Ganley Chevrolet, Inc., No. 2013-1746, 2015 WL 5039233 (Aug. 27, 2015), the Ohio Supreme Court held that a class action cannot be certified where the plaintiff cannot demonstrate, through common evidence, that all putative class members incurred damages resulting from the defendant’s alleged conduct. For claims under Ohio’s Consumer Sales Practice Act (OCSPA), this requires demonstrating that all class members suffered actual damages.
The lawsuit involved allegations that the defendant, a car dealership, violated the OCSPA by requiring purchasers of vehicles to agree to an unenforceable arbitration provision. Plaintiffs alleged they incurred actual damages following a dispute with the defendant. Plaintiffs sought unspecified “monetary damages … where appropriate” for the class, but did not seek actual damages for class members. The trial court certified the proposed class under Ohio’s Civil Rule 23(B)(2) and (B)(3) (which are substantially similar to FRCP Rules 23(B)(2)( and (B)(3)), and awarded $200 per transaction to each class member based, not on any actual damages, but rather on the trial court’s “discretion.”
The Ohio Supreme Court reversed. The Court first noted that the OCSPA provides for statutory and treble damages only in individual actions but not in class actions. Specifically, the Court stated, “[p]roof of actual damages is required before a court may properly certify a class action.” Felix, 2015 WL 5039233 at ¶31. The Court noted that the OCSPA’s requirement is consistent with various other state consumer protection statutes (including in Illinois, California, and New York), which require aggrieved consumers to plead and prove actual damages.
Second, following federal law, the Court noted that “[p]laintiffs in class-action suits must demonstrate that they can prove, through common evidence, that all class members were in fact injured by defendant’s action.” Felix, 2015 WL 5039233 at ¶33. Where a plaintiff fails to demonstrate that all class members were damaged, such proposed class fails under the predominance requirement of Ohio’s Civil Rule 23(b)(3) (which is substantially equivalent to FRCP Rule 23(b)(3)). Because no statutory damages are available to the proposed class members under the OCPSA, and plaintiffs neither alleged nor demonstrated that class members incurred actual damages, the Court found that plaintiffs’ proposed class cannot be certified.
This decision demonstrates the necessity for class action plaintiffs to allege cognizable damages to the purported class in order to satisfy the predominance requirement. Where the underlying cause of action – in Felix, alleged violations of the OCSPA – require actual damages to sustain a class action, then a class should be certified only where the plaintiff has demonstrated that all the class members, based on common evidence, can be shown to have suffered actual damages.