This past week, ATRA, in conjunction with the Ohio Chamber of Commerce, Ohio Alliance for Civil Justice and the US Chamber of Commerce, filed an amicus brief in the case of Cullen v. State Farm Mutual Automobile Insurance. The Brief urges the Ohio State Supreme Court to overturn the decision of the Court of Appeals and hold that the trial court was correct to consider the factual and legal merits of the case when determining whether or not to certify the class under Rule 23.
In this case, the lead Plaintiff is asserting that the language in the State Farm insurance policy provided customers with a right to obtain a cash payment for the entire value of windshields, to have the windshield repaired, and to keep the remaining money. While State Farm argued against the “pay-out” option for policy holders, the Eighth District simply “believed” the Plaintiff’s “theory of the case” for purposes of class certification. The Eighth District overturned the trial court’s decision to not certify the class and found that the trial court waded too far into the merits of the case. The appellate court took the “no consideration of the merits approach,” as outlined in the US Supreme Court case of Eisen v. Carlisle & Jacquelin, but as the Brief goes on to explain, this approach was subsequently rejected by most state courts and the US Supreme Court.
The battle waging in Ohio, is one that already has been fought and won at the Federal level. It concluded in 2011 with the case of Walmart Stores Inc. v. Dukes. In this case, the Supreme Court held that courts cannot simply rely on the allegations in a plaintiff’s complaint or a perfunctory evidentiary showing. Courts must examine all the evidence for class certification, including expert testimony, and must resolve factual disputes concerning the Rule 23 requirements. Dukes, 131 S. Ct. at 2551. The Court specifically recognized how its previous Eisen opinion had led to some confusion at the lower court levels. The opinion acknowledged that the lower courts had “mistakenly” concluded that they could not inquire into merit issues impacting the appropriateness of class certification.
The Cullen brief points out that the US Supreme Court explicitly rejected Eisen’s overbroad application to preclude consideration of merits issues relating to class action certification. Therefore, it is permissible, if not necessary, for courts to consider the factual and legal merits of the case if they pertain to the question of whether or not to certify a class. If such key questions are not addressed, Ohio courts may place inordinate pressure on businesses to settle weak or frivolous claims. Ohio courts must follow the precedent and sound principles set forth in Dukes and remove the incentive for unwarranted forum shopping that would draw spurious class actions to Ohio state courts.
To read the Brief in full, please click here.