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Wednesday, September 24, 2014

Ganley Chevrolet, Inc., et al. v. Jeffrey Felix et al., Case no. 2013-1746
Eighth District Court of Appeals (Cuyahoga County)

Sudinia D. Johnson v. State of Ohio, Case no. 2013-1973
Twelfth District Court of Appeals (Butler County)

Ying H. Chen, D.O., et al. v. Henry Smith, Case no. 2013-2008
Tenth District Court of Appeals (Franklin County)

Must Individuals Named in Class Actions Suffer Actual Harm or Damage?

Ganley Chevrolet, Inc., et al. v. Jeffrey Felix et al., Case no. 2013-1746
Eighth District Court of Appeals (Cuyahoga County)


Jeffrey and Stacy Felix traded in their van and purchased a Chevrolet Blazer in March 2001 from Ganley Chevrolet. The Felixes claim Ganley offered them a 0 percent interest rate. They signed the contract, which included a clause stating that any disputes would be resolved through binding arbitration, and drove the vehicle home.

When they returned a few days later to sign additional paperwork, they were told the lender would only approve 1.9 percent financing for the vehicle. They agreed and signed the documents. They were then notified more than a month later that the financing institution refused to approve the 1.9 percent rate and were told they could obtain a bank loan at an interest rate above 9 percent. The Felixes refused to accept the new agreement.

In June 2001, the Felixes sued the dealership. In their complaints, they alleged that the contract’s arbitration clause violated the Consumer Sales Practices Act (CSPA) and asked the court to certify a class action.

Ganley requested a stay to allow the arbitration to happen, but the trial court in August 2005 refused to stop the court proceedings. Ganley appealed to the Eighth District Court of Appeals, which affirmed the decision, and the case returned to the trial court.

In September 2012, the trial court approved a class action, made up of all customers from “commencement through the present date” who signed a vehicle purchase contract that contained arbitration clauses substantially similar to the one in the Felixes’ contract. The court also ruled that the arbitration clause was unlawful under the CSPA and imposed damages on Ganley of $200 per transaction for each member of the class.

Ganley again appealed to the Eighth District, which agreed with the decision to certify a class. The dealership filed an appeal with the Ohio Supreme Court, which decided to hear the case.

Attorneys for Ganley assert that individuals who have not suffered actual harm or damages cannot be included in a class action and that the class approved in this case should have been denied. Nearly all customers in the class, besides the Felixes, have had no dispute with Ganley regarding the contract’s arbitration clause, they argue, so the class is ambiguous and too broad.

“For all of these satisfied customers, the mere inclusion of an unimplicated arbitration clause (even if that clause was found to be deficient in one customer’s dispute) did not cause any actual, legally-cognizable harm,” they write in the dealership’s brief to the court. “This is not, therefore, a live class action dispute; rather, this case is and always has been a narrow two-party dispute between the Felixes and their dealership over the interest rate ….”

They cite the Ohio Supreme Court’s 2013 decision in Stammco, LLC, v. United Tel. Co. of Ohio, which stated: “[i]f  … a class is defined so broadly as to include a great number of members who for some reason could not have been harmed by the defendant’s allegedly unlawful conduct, the class is defined too broadly to permit certification.”

Given the ruling, Ganley’s attorneys contend that the Eighth District improperly concluded the issue of whether individuals in the class sustained actual harm could not be decided at this stage because it was beyond the scope of the class certification question. How to define a class must be decided at the time the class is certified, not in future proceedings after a class has been approved, they maintain.

The attorneys also point to R.C. 1345.09(B) of the CSPA, which provides:

For a violation of Chapter 1345. of the Revised Code, a consumer has a cause of action and is entitled to relief as follows: ...
... the consumer may rescind the transaction or recover, but not in a class action, three times the amount of the consumer’s actual economic damages or two hundred dollars, whichever is greater, plus an amount not exceeding five thousand dollars in noneconomic damages or recover damages or other appropriate relief in a class action under Civil Rule 23, as amended.

They claim that class action lawsuits brought under this statute must show “actual damages.” The trial court’s award of $200 to all the customers in the class was not based on actual damages, they argue.

“Actual damages are … predicated on evidentiary proof of an actual injury and an ascertainable amount of damage, but the trial court arbitrarily imposed ‘discretionary damages’ in a uniform, across-the-board amount without any evidentiary proof,” they assert.

Attorneys for the Felixes respond that the Stammco (2013) court ruled that trial courts may look into the merits of a class action to determine whether the required elements for a class are met, but the court did not mandate such a probe. They contend that the trial court found that all the individuals in the class action had executed a contract containing the arbitration clause with the dealership, which allowed for an award of damages under R.C. 1345.09(B). They note that the statute provides separately for individual damages and class-action damages.

They quote Whitaker v. M.T. Auto., Inc. (2006), in which the Ohio Supreme Court stated that “in an action brought under the CSPA, all forms of compensatory relief, including noneconomic damages, are included within the unrestricted term ‘damages.’”

They argue that, under the CSPA, all the members in this class action were deceived and legally wronged.

In re Whirlpool Corp. Front-Loading Washer Prods. Liability Litigation (2012), decided by the Sixth U.S. Circuit Court of Appeals, also dispels Ganley’s argument against so-called “no-injury” class actions, the Felixes’ attorneys maintain. Whirlpool held that “[c]lass certification is appropriate ‘if class members complain of a pattern or practice that is generally applicable to the class as a whole.’”

Detailing some of the trial court’s findings of “lawlessness” by Ganley, including “brazen disdain for consumer protection,” delay tactics, and “undue burdens” on the courts, the Felixes’ attorneys conclude that Ganley did harm its customers. Even if that harm cannot be defined as an exact amount, that fact does not prohibit an award of damages under the CSPA.

Amicus curiae briefs supporting Ganley Chevrolet have been submitted by the following:

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing Ganley Chevrolet, Inc., et al.: Joseph Castrodale, 216.583.7342

Representing Jeffrey and Stacy Felix: Lewis Zipkin, 216.514.6400

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Did Officer Act in Good Faith When Placing GPS on Vehicle Without a Warrant?

Sudinia D. Johnson v. State of Ohio, Case no. 2013-1973
Twelfth District Court of Appeals (Butler County)

ISSUE: Does a good faith exception to the exclusionary rule apply when there is no binding precedent from an appellate court in a case in which a police officer without a warrant placed a GPS device on a vehicle to track suspected criminal activity?

During several months in 2008, a Butler County sheriff’s deputy obtained information indicating that Sudinia Johnson of Hamilton was trafficking cocaine. An informant told the deputy that Johnson might be acquiring more cocaine in Chicago. Based on that tip, the officer went to Johnson’s home on October 23, 2008, and placed a global positioning system (GPS) device on the underside of Johnson’s van.

Law enforcement intermittently tracked the van, and a few days later it was located in Chicago. As the van and another car entered back into Butler County, police stopped and searched the vehicles, found cocaine, and arrested Johnson.

Before his trial, Johnson asked the court to suppress evidence taken from the vehicles because of the GPS device put on his van without a warrant. The trial court denied his request, finding that a warrant was not needed for police to put the GPS tracker on his vehicle. Johnson pled no contest to charges of trafficking and possession, and was sentenced to 15 years in prison.

He appealed to the Twelfth District Court of Appeals, which affirmed the trial court. Johnson then filed an appeal with the Ohio Supreme Court, which heard the case. However, after oral arguments there, the U.S. Supreme Court decided United States v. Jones in 2012, which stated that the use of a GPS is a search. Based on that decision, Ohio’s highest court returned the case to the trial court to apply the ruling from Jones.

The trial court determined that placing the GPS on Johnson’s van without a warrant was a violation of his constitutional protections against illegal search and seizure. But the trial court found that the deputy acted in good faith, so the exclusionary rule, which bars evidence obtained from an illegal search or seizure from being admitted at trial, did not apply, and the evidence could be used in the case. Johnson again pled no contest, and the court gave him a 10-year prison sentence.

Johnson again appealed to the Twelfth District, which agreed with the trial court. Johnson asked the Ohio Supreme Court to review the matter, and the court accepted the case.

Attorneys for Johnson argue that suppressing evidence obtained during an illegal search or seizure is meant to deter law enforcement from future violations of the Fourth Amendment to the U.S. Constitution. They contend that a 2011 U.S. Supreme Court decision (United States v. Davis) held that if law enforcement conducts a search without a warrant but does so in good faith, then an exception can be made to the exclusionary rule if there is binding precedent for that approach in an appellate court.

However, they write in Johnson’s brief to the court, “there is no evidence [the sheriff’s deputy] relied on any precedent, binding or otherwise. Neither [the Ohio Supreme] Court, nor the Twelfth District Court of Appeals had spoken on the issue of GPS surveillance when [the officer] placed the GPS tracking device on Mr. Johnson’s vehicle.”

They assert that good faith exceptions to the exclusionary rule are limited to the ones the U.S. Supreme Court has created, and the deputy’s warrantless placement of the GPS on Johnson’s van does not qualify as an exception.

While the Davis court considered the costs and benefits to society if the evidence in that case was suppressed, Johnson’s attorneys maintain that the court did not announce that as a test for courts to use in similar cases. The court instead ruled that lower courts must decide whether law enforcement’s actions complied with existing binding court precedent, they claim. In this case, the deputy conducted an illegal search without any reliance on earlier appellate court decisions to support his actions, so Johnson’s attorneys conclude a good faith exception cannot be made.

Attorneys from the Butler County Prosecutor’s Office counter that the good faith exception is not as narrow as the defendant is claiming. They argue that the U.S. Supreme Court instructed lower courts to exclude evidence only when the benefits of deterring law enforcement from illegal searches outweighs the costs to society of the evidence being suppressed.

“[T]he question asked of the United States Supreme Court in the Davis case was whether reliance on binding precedent would support an argument under the good faith exception,” they write in a brief to the court. “Thus, it is not a surprise that the decision noted that binding precedent would support the good faith exception. However, this does not indicate that non-binding precedent would not support the good faith exception ….”

They add that the sheriff’s deputy consulted with other officers and a prosecutor about placing the GPS without seeking a warrant, so he reasonably believed his actions were lawful. And given several federal court decisions made before the decision to use GPS to track Johnson, the deputy’s belief that he did not need a warrant was understandable at the time.

In determining whether the good faith exception to the exclusionary rule applies in a case, courts must conduct a “rigorous and factually based cost benefit analysis” rather than follow a “rigid” standard that relies on binding precedent, they assert. They conclude that the costs of suppressing the evidence in this case outweigh any deterrence factor to law enforcement.

An amicus curiae brief supporting Johnson’s position has been submitted by the National Association of Criminal Defense Lawyers. The Ohio Prosecuting Attorneys Association, Fairfield County Prosecutor Gregg Marx, Cuyahoga County Prosecutor Timothy J. McGinty, and Franklin County Prosecutor Ron O'Brien have collectively filed an amicus brief supporting the Butler County Prosecutor’s Office. Ohio Attorney General Mike DeWine has also submitted an amicus brief in support of the prosecutor’s office.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing Sudinia D. Johnson: William Gallagher, 513.651.5666

Representing the State of Ohio from the Butler County Prosecutor’s Office: Michael Oster, 513.887.3474

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Is Surveillance Video in Malpractice Case Subject to Disclosure?

Ying H. Chen, D.O., et al. v. Henry Smith, Case no. 2013-2008
Tenth District Court of Appeals (Franklin County)

ISSUE: Must surveillance video taken by defendants be produced during discovery, or is the video protected as attorney work product from being disclosed before trial?

In December 2010, Henry Smith filed a medical malpractice lawsuit against Ying H. Chen, D.O., and his medical office OrthoNeuro. Smith claims that spinal fusion surgery in 2007 was performed negligently by Chen causing a neck injury.

Before trial, Smith requested access to surveillance video, which was taken by the medical practice’s investigators and was going to be presented at trial. In December 2012, the court ordered that the video be provided to Smith. OrthoNeuro and the doctor appealed to the Tenth District Court of Appeals, which agreed that the video should be supplied to Smith.

Chen and OrthoNeuro appealed to the Ohio Supreme Court, which decided to hear the case.

Attorneys for the doctors claim that the video is privileged and protected from disclosure because it is the work product of the attorneys preparing the case. Also, they argue that Smith has not shown good cause why the video needs to be produced and should be exempt from the attorney work-product privilege.

According to a 2010 Ohio Supreme Court decision, they maintain, materials may be disclosed for good cause if they are directly at issue in the case, there is a compelling need for the information, and the evidence cannot be obtained in another way. They contend that the video contains nothing related to the relevant standard of medical care required in the case, is not central to whether the alleged malpractice happened, and serves no compelling need for Smith.

They assert that if Smith is truthful, he has no reason to be concerned about the video’s contents. They add that the usefulness of the video in contradicting Smith’s claims will be lessened or lost if they must provide the video before trial. Smith could prepare in a way to avoid the truth diminishing the video’s impact, and the jury would be less able to determine his truthfulness, they argue.

Attorneys for Smith respond that a surveillance video prepared to refute Smith’s medical malpractice claim “goes to the heart of a personal injury action,” making it substantive and not subject to the privilege. They note that Smith has had multiple back injuries – some that occurred before the surgery and others after. They argue that the video may or may not show injuries related to this action, and medical experts will need to explain what types of activities are affected by Smith’s injuries.

Even if the video’s contents are not considered substantive, but instead designed only to impeach Smith’s testimony, the attorneys claim it still cannot be excluded from disclosure. The video is clearly central to addressing the nature and degree of Smith’s injuries, they contend, and Smith would be ambushed if he first sees the video at the same time the jury does. They also have a compelling interest in reviewing the video to evaluate its quality and accuracy.

They note that Smith has already been deposed twice, so any testimony he gives at trial could be challenged based on what he said earlier in his depositions. That is why the appeals court concluded that allowing Smith to see the video now, after his depositions but before trial, achieves the appropriate balance of competing interests, they argue.

In this case, the lower courts narrowly held in these specific circumstances that Smith showed good cause for the disclosure of the video that warranted an exception to the attorney work product privilege, they maintain.

An amicus curiae brief supporting the position of Chen and OrthoNeuro has been submitted by the Ohio Association of Civil Trial Attorneys. The Ohio Association for Justice and the Ohio Employment Lawyers Association have filed separate amicus briefs supporting Smith.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing Henry Smith: David Shroyer, 614.228.6453

Representing Ying H. Chen et al.: Douglas Leak, 216.615.4835

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These informal previews are prepared by the Supreme Court's Office of Public Information to provide the news media and other interested persons with a brief overview of the legal issues and arguments advanced by the parties in upcoming cases scheduled for oral argument. The previews are not part of the case record, and are not considered by the Court during its deliberations.

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