The Supreme Court of Ohio’s recent decision in Felix v. Ganley Chevrolet, Inc., Slip Opinion No. 2015-Ohio-3430 provides defendants with an additional argument for defeating certification of class actions – all class members must have suffered some damage or injury as a result of the alleged conduct. Id. at ¶ 1.
The Court reversed class certification, concluding that the Plaintiffs failed to demonstrate that common questions “predominate” because there was no showing that all members of the class had suffered damages “in fact”. The Court distinguished between the class certification inquiry of whether a person suffers some injury (damage-in-fact) and the amount of damages for that injury (actual damages). Id. at ¶ 34. While the case involves alleged violations of the Ohio Consumer Sales Practices Act (“OCSPA”), it has broader implications for all class actions, and specifically consumer class actions, in which the question of whether all plaintiffs have suffered an injury frequently arises.
Prior to the class certification proceedings in Felix, a final judgment was entered finding that an arbitration provision in the Defendant’s standardized auto financing contract violated the OCSPA because it was procedurally and substantively unconscionable. The trial court subsequently certified a class of all persons who had entered into a contract containing the unlawful arbitration clause and held that each class member was entitled to the minimum $200 award statutorily provided for any OCSPA violation. The Eighth District Court of Appeals affirmed in a split decision. The Ohio Supreme Court reversed, holding that class-wide injury-in-fact – not statutory damages – is required for class action status: “all members of a class in class action litigation alleging violations of the OCSPA must have suffered injury as a result of the conduct challenged in the suit.” Id. at ¶ 36.
The decision also reiterated that the Court will follow U.S. Supreme Court precedent when it interprets and applies Ohio Civ.R. 23, and expressly adopted the requirement in Comcast v. Behrend, 133 S.Ct. 1426 (2013) that “Plaintiffs in class-action suits must demonstrate that they can prove, through common evidence, that all class members were in fact injured by the defendant’s actions.” Id. at ¶ 33.
Because the damages-in-fact requirement is not limited to class actions brought under the OCSPA, Felix will provide valuable support for defendants when challenging damages theories as part of class certification.