OCSPA Class Actions Require Actual Damage
In Felix v. Ganley Chevrolet, the Ohio Supreme Court recently held that ALL members of a plaintiff’s class action alleging violations of the Ohio Consumer Sales Practices Act (“OCSPA”) must have suffered actual injury as a result of the alleged conduct to maintain an action.
In Felix, the Plaintiffs filed suit against a car dealership for deceptive practices under the OSCPA. They included a claim that the arbitration provision contained in the dealer’s contracts was unconscionable and that the dealer’s practices pertaining to the clause violated the OSCPA. The Felixes sought to certify a class that included any consumer who signed a contract with any of Ganley’s 25 companies that included the same arbitration clause. The trial court held that the inclusion of the arbitration provision violated the OSCPA and awarded the statutory damage of $200 per transaction to each class member. The court of appeals upheld this decision and the Ohio Supreme Court granted review for the purpose of determining if all members of a plaintiff’s class alleging violations of the OCSPA must have suffered actual damage.
The OCSPA allows the recovery of “damages” in a class action (See R.C. § 1345.09(B)) but the code limits those damages to “actual damages” and does not allow for the recovery of the statutory damages laid out by the OCSPA for individual actions. The Court found this reasoning consistent with the purpose of the individual damage provisions in the OCSPA to encourage consumers with smaller amounts of damage to bring their claims. The court found this purpose unnecessary in class action claims because the aggregation of claims constitutes the necessary deterrent to noncompliance with the statute.
The Court stated that the suffering of some injury is one of the most basic requirements to bringing a lawsuit and is an indispensable part of civil actions. In the case of a class action, common evidence must be shown that all members of the class suffered some injury. The “fact of damage” (the existence of injury) goes directly to the predominance inquiry required under Civil Rule 23(b)(3) for class actions. A claim that requires individual inquiry into the fact of damage does not meet this predominance requirement. Damage must result for the common action alleged to cause actual injury to all of the class members. Without a showing that all class members were damaged, the predominance requirement is not met and the class must fail.
In Felix, the Court found that the Plaintiffs did not show that all consumers who signed a contract with the offending provision were damaged and therefore the class claims must be denied. While the language used in all of the contracts may have violated the OCSPA, the Plaintiffs were still required to show that this caused actual injury to all members of the class. The violation, in and of itself, was not enough to award damages to the class without a showing of actual injury to each and every class member.
The Full Text of the Opinion May Be Found HERE