Merit Decision. Another Class Action Bites the Dust. Cullen v. State Farm Mut. Auto Ins. Co.

Update:  Read a more thorough analysis of this merit decision here.

On November 5, 2013, the Supreme Court of Ohio handed down a merit decision in Cullen v. State Farm Mut. Auto Ins. Co., 2013-Ohio-4733. In this 5-2 decision written by Justice O’Donnell, in which Judge Matthew McFarland sat for Justice French and joined the majority, Justice Lanzinger concurred only in paragraph three of the syllabus and in the judgment, and Justices Pfeifer and O’Neill dissented, the Court nixed a class action certification by the trial court.  The case involves the allegedly improper handling of glass-only windshield damage claims by State Farm.  The decision “clarifies the standards to apply when an appellate court reviews certification of a class action pursuant to Civ. R. 23.”

Because I know so little about this subject, one of my civil procedure colleagues is going to do the analysis of this merit decision. In the meantime, here is the case syllabus:

1. A trial court must conduct a rigorous analysis when determining whether to certify a class pursuant to Civ.R. 23 and may grant certification only after finding that all of the requirements of the rule are satisfied; the analysis requires the court to resolve factual disputes relative to each requirement and to find, based upon those determinations, other relevant facts, and the applicable legal standard, that the requirement is met.

2. In resolving a factual dispute when a requirement of Civ.R. 23 for class certification and a merit issue overlap, a trial court is permitted to examine the underlying merits of the claim as part of its rigorous analysis, but only to the extent necessary to determine whether the requirement of the rule is satisfied. (Ojalvo v. Bd. of Trustees of Ohio State Univ., 12 Ohio St.3d 230, 466 N.E.2d 875 (1984), clarified.)

3. A party seeking certification pursuant to Civ.R. 23 bears the burden of demonstrating by a preponderance of the evidence that the proposed class meets each of the requirements set forth in the rule.

4. Claims for declaratory relief that merely lay a foundation for subsequent determinations regarding liability or that facilitate an award of damages do not meet the requirement for certification set forth in Civ.R. 23(B)(2).

Stay tuned for an in-depth analysis of this decision. Earlier this year, the Court upheld the denial of a class certification in Stammco, L.L.C., v. United Tel. Co. of Ohio, 2013-Ohio-3019. Justices Pfeifer and O’Neill dissented in that case also.

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