The Ohio Chamber supported Ganley Chevrolet, Inc. in a case before the Supreme Court of Ohio by joining an amicus brief advocating their position that, in a class action lawsuit under the Ohio Consumer Sales Practices Act (OCSPA), class members must prove actual damages under the OCSPA. The OCSPA is the cornerstone of Ohio Consumer Law and applies to all consumer transactions. It aims to protect consumers by, among other things, allowing consumers to file a lawsuit against a business or supplier alleging unfair, deceptive, or unconscionable sales practices. Consumer transactions include the purchase, solicitation for purchase, or award by chance, of a product or service that is intended for home, family, or personal use. Examples include everything from the purchase of a motor vehicle to a store advertising a sale.

In a recent decision by the Supreme Court of Ohio, Felix v. Ganley Chevrolet, Inc., Slip Opinion No. 2015-Ohio-3430, the court ruled that, in a class action lawsuit alleging violations of OCSPA, all class members must have suffered an injury. The main question before the Supreme Court of Ohio was whether consumers in a class action lawsuit under the OCSPA must prove actual damages or whether they can simply be awarded $200 in statutory damages for a violation, as permitted under the OCSPA in individual lawsuits.

This case arose out of claims that Ganley Chevrolet’s arbitration agreement, included in its purchase documents, also known as a buyers’ order, was both substantively and procedurally unconscionable. An arbitration agreement is an agreement between the parties to settle disputes using a neutral third party, or parties, rather than through a traditional court process. The trial court agreed that the arbitration agreement was unconscionable due to the fact that it didn’t include items such as the identity of the arbitrator or the cost and fees associated with arbitration. The trial court then certified the class to include every consumer who purchased a vehicle from the dealership within a two-year period whether or not the consumer ever had a dispute related to their purchase and awarded each consumer discretionary damages in the amount of $200.

The Eighth District Court of Appeals later affirmed the trial court’s ruling. The decision by the trial court and affirmation by the Eighth District were clearly at odds with the plain language of the OCSPA that requires consumers filing a class action to prove actual damages and would have had an impact on all businesses using an arbitration agreement. The mere inclusion of an unconscionable provision in an agreement should not give rise to a class action that includes every single consumer with whom that contract was ever used even if the person never had a dispute or issue under that provision.

The Supreme Court of Ohio sided with Ganley. In its decision, the court determined that, “The trial court’s holding that it could award $200 to each member of the class as a matter of the trial court’s discretion is based on a fiction. There is no authority in the statutory scheme or in our precedent to support a damages award to a class member in class action litigation arising from the OCSPA absent a showing that the class member was injured and sustained damages as a result of the defendant’s conduct.” The Eighth District’s decision was reversed and the case was remanded to the trial court for proceedings consistent with their opinion.

For more information on the OCSPA, please click here. To view a guide for businesses on complying with Ohio Consumer Law created by the Ohio Attorney General’s office, please click here.