The U.S. Supreme Court is poised to decide next Term, in Tyson Foods, Inc. v. Bouaphakeo, whether a class can be certified when many class members lack injury (see my June 16 post for more on that). The Ohio Supreme Court recently weighed in on a similar question, but treated it as a predominance issue. One of the interesting aspects of class action practice is that often the same or a similar line of argument can be cast in different ways – what some courts treat as an issue of standing might also be treated as an issue of commonality or predominance. A good defense strategy can be to make what amounts to the same or a similar argument under different aspects of the class action rule.
In Felix v. Ganley Chevrolet, Inc., No. 2013-1746, 2015 Ohio LEXIS 2113 (Ohio Aug. 27, 2015), the plaintiffs purchased and arranged financing for a vehicle through the defendant. They alleged that an arbitration clause in the purchase contract was unconscionable and that the defendant’s conduct violated the Ohio Consumer Sales Practices Act (“OCSPA”). Id. at *2-5. The trial court granted class certification, ruled that the arbitration provision violated the OCSPA, and awarded $200 per transaction to the class members. The Ohio Supreme Court reversed.
The Ohio Supreme Court, noting that it looks to federal law on class certification as persuasive authority, held that under the Ohio class action rule, “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 *16-17 (emphasis added). The court explained that the fact of damage is different from the amount of damage. “If the class plaintiff fails to establish that all of the class members were damaged (notwithstanding questions regarding the individual damages calculations for each class members), there is no showing of predominance under Civ. R. 23(b)(3).” Id. at *18. The court explained that “there is absolutely no showing that all of the consumers who purchased vehicles through a contract with the offensive arbitration provision were injured by it or suffered any damages.” Id. at *19. One justice dissented, asserting that the majority had improperly addressed a merits question at class certification. Id. at *23 (O’Neill, J., dissenting).
While some courts address this type of question as an issue of class member standing (and perhaps the Supreme Court will do that in Tyson Foods), this decision is a helpful reminder to defendants that, even if you do not prevail on standing grounds, you might prevail on essentially the same question as a predominance issue. Another way to cast the same type of argument is that liability to individual class members is individualized, because liability cannot be established through common evidence. That is another way to get around the plaintiffs’ argument that individualized calculations of damages should not be enough to defeat class certification.