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 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.

The company leased Ohio EPA approved storage facilities for road salt. Co-defendants Cargill, Inc. and Central Salt, LLC stored approximately 150,000 tons of salt on Good’s property. In August 2010, residents of Camden began to complain that their tap water tasted of salt. Given that the piles of salt were located approximately 10 to 15 feet above the aquifer that supplied the Camden water system, the village decided to use another well, which was known, unto itself,to put out water with a high iron content. The Ohio EPA, which previously determined that the salt-flavored water was safe to drink, also determined that the iron-rich water would be safe to drink as well. The agency did caution, though, that the iron levels could cause discoloration and staining. Approximately 18 months later, Camden discontinued its use of the iron-rich water and instead connected the village system to another water source.

Litigation ensued and five plaintiffs joined together to sue Good, Cargill and Central Salt. The plaintiffs alleged that they suffered damages from using the salt-flavored and/or iron-rich water from the Camden public water system. Eventually, the plaintiffs amended their complaint and filed on behalf of a class that was purported to be “all persons and businesses who reside or have resided in the Village of Camden, who receive or have received water through the Village of Camden’s public water system, from August 1, 2010, through the present.” The defendants objected to such attempts to certify a class, but the Court of Common Pleas found that the class certification was proper.

In overturning the lower court, the Twelfth District Court of Appeals relied upon both the Ohio Rules of Civil Procedure 23 and Stammco, L.L.C. v. United Tel. Col. Of Ohio, 125 Ohio St.3d 91, 2010-Ohio-1042. Under this authority, there are seven requirements for class action certification in Ohio:

  1. An identifiable class must exist and the definition of the class must be unambiguous;
  2. The named representatives must be members of the class;
  3. The class must be so numerous that joinder of all members is impractical;
  4. There must be questions of law or fact common to the class;
  5. The claims or defenses of the representative parties must be typical of the claims or defenses of the class;
  6. The representative parties must fairly and adequately protect the interest of the class; and
  7. One of the three Civ.R. 23(B) requirements must be met.

In order for a class to be certified, all seven elements must be established by preponderance of the evidence. Overruling such a determination will be made only upon a showing of an abuse of discretion.

The Twelfth District noted that “the trial court summarily dismissed the majority of Cargill and Central Ohio Salt’s arguments without articulating any factual analysis. The trial court’s failure to rigorously analyze the issues would be enough to reverse the trial court’s decision. However, we also find that reversal is necessary because several of the prerequisites of Civ.R. 23 have not been satisfied by a preponderance of the evidence.”

In this paragraph, the court joined an emerging line of Ohio cases that directly address the requirement articulated in Wal-Mart Stores, Inc. v. Dukes, __ U.S. __, 131 S. Ct. 2541 (2100), that courts perform a “rigorous analysis” at the class certification stage to determine the existence and scope of a proposed class. It also foreshadows issues currently before the Ohio Supreme Court in Cullen v. State Farm Mut. Auto Ins. Co. (Case No. 20120-0535), where the court has been asked to expressly adopt the Wal-Mart, standard as the law of Ohio. More discussion on Cullen can be found in the May 2012 Bricker & Eckler article Will the Ohio Supreme Court Visit Aisle 23 at Wal-Mart?.

The court determined that it was impossible to establish an identifiable class:

The mere fact that someone received water from the public water supply does not establish the fact that the person has been “harmed” as anticipated in the trial court’s class certification.

Inquiry as to whether or not harm occurred would be necessary. In addition, proximate causation would also need to be established in order to maintain an ascertainable class. The Twelfth District also took issue with the lack of articulation in the trial court’s decision about how to identify past and present residents of Camden or their current whereabouts. “Simply stated, the class definition certified by the trial court is impermissibly indefinite and ambiguous.”

On the issue of numerosity, the Twelfth District noted that there was no indication as to the number of possible class members who were actually harmed by the water. While a large class of potential plaintiffs exists — the population of Camden is approximately 2,300 people — there is no indication of how many of these people were actually harmed by the water. Instead, the record only indicated that the individuals could possibly be a member of the class. Had there been a better showing as to how many individuals were actually harmed, this may not have been an issue.

Predominance was not satisfied either. The Twelfth District noted that common questions of law and fact did not predominate over those which would affect only individual members. The court noted that:

[N]ot only is the damages question different for each plaintiff, but also the causation issue is highly individualistic. Common questions of fact and law do not predominate because resolution of each plaintiff’s case could not be obtained through a single adjudication.

The Twelfth District noted that there was no one single course of conduct from which the plaintiffs allegedly suffered harm. Rather, the court noted that the degree of liability could vary significantly among the defendants and that there were many outside factors that may have contributed to the situation as well. As a result, the court held that “it is necessary for each plaintiff to demonstrate in one way he or she has been harmed by the various actions of each defendant.” As a result, individual questions predominated common ones.

In addition, the court addressed the problems with proof of injury. It held that “it is necessary for each plaintiff to demonstrate in one way he or she has been harmed by the various actions of each defendant.” This is significant because not only does it (1) require that causation be tied between the alleged act and the injury incurred, but it also (2) requires that there be actual harm. As the court noted, “each plaintiff would need to separately address in what way he or she was actually damaged by using either the salty water, the iron-rich water, or by being hooked into” the ultimate water source. The court’s insistence that there be an actual injury in order to certify a class is consistent with two other recent opinions from Ohio. See Hirsch v. CSX Transp. Corp. 656 F.3d 359 (6th Cir. 2011); and Andrews v. Nationwide Ins. Co., Cuyahoga County Court of Common Pleas Case No. CV-11-756463. Discussion on both these cases can be found in the May 2012 Bricker & Eckler article Class of Ohio Insureds Lacks Standing Because of Speculative Injuries.

Indeed, even one of the plaintiffs “testified that each resident of Camden had ‘their own story to tell,’ and the record also reflects that each resident of Camden was exposed to different types of levels of water contamination.” Consequently, the Twelfth District determined that the trial court abused its discretion by certifying the class and that the plaintiffs failed to prove by preponderance of the evidence that they fulfilled each of the seven necessary elements.

Perhaps most significant, the court of appeals did not remand the case to permit the plaintiffs to amend their class definition.

For those defending class actions, the George case will be helpful authority to support the need for a rigorous analysis of the elements of Rule 23, as well as the need to plead and prove both damages and causation at the class certification stage. No-injury classes simply won’t do.