On November 5, 2013, the Supreme Court of Ohio adopted the class certification principles announced in the U.S. Supreme Court's decisions in Wal-Mart Stores, Inc. v. Dukes and Comcast v. Behrend. In Cullen v. State Farm Mutual Automobile Ins. Co., __ Ohio St.3d __, 2013-Ohio-4733, the Ohio high court held that courts must base class-certification decisions on evidence, not merely on a plaintiff's allegations, and established that the standards applicable to evaluating the propriety of class certification in federal courts also apply under the Ohio rules.
Although Cullen was not an employment case, its impact will be felt in employment cases statewide and will likely influence decisions in employment elsewhere. The Cullen ruling amplifies the court’s opinion in Stammco v. United Telephone Co. of Ohio, 136 Ohio St.3d 231, 2013-Ohio-309. The Stammco opinion was discussed here in a July 19, 2013 blog article. Together, Cullen and Stammco align Ohio law with the more exacting federal standards for class certification and mark a significant victory for class defendants throughout the state, regardless of the area of law involved.
In Cullen, the Ohio Supreme Court reversed the trial and appellate courts’ decisions certifying a class, holding that both lower courts erred by failing to apply a "rigorous analysis" of the Civil Rule 23 requirements. As the opinion reiterated, a "rigorous analysis" must consider the evidence relevant to the Rule 23 factors even if that evidence also bears upon the underlying merits. Accordingly, the Court held that the trial and appellate courts erred by assuming that the plaintiff’s theory of the case was accurate, rather than examining the relevant evidence.
Further, the Court rejected the plaintiff's proposed Rule 23(B)(2) (the Ohio counterpart to federal Rule 23(b)(2)), injunctive-relief class, for two reasons: first, because monetary damages were not merely incidental to the declaratory relief sought; and second, because prospective relief would not benefit all class members. The Court thus held that Ohio courts cannot certify Rule 23(B)(2) classes seeking declaratory relief intended merely to lay a foundation for subsequent individual determinations of liability.
Additionally, the Cullen Court ratcheted up the standard of proof required to certify a class. While it did not expressly require a Daubert analysis of expert opinions offered to support class certification, the Court implicitly approved of and performed such an analysis in rejecting the plaintiff’s experts' opinions. The plaintiff had proffered expert testimony in support of its argument that there was common proof that windshield repairs failed to return all windshields to pre-loss condition. The Court held that Cullen's experts "asserted that the repair could not restore a windshield to pre-loss condition, but neither had sufficient evidentiary foundation for those opinions." Id. at ¶ 47. And without evidentiary foundation, those opinions could not carry the plaintiff’s burden of showing that common issues predominated over individualized issues.
The Ohio Supreme Court in Cullen amplified the Stammco opinion decided on July 16, 2013. Stammco held that "at the certification stage in a class-action lawsuit, a trial court must undertake a rigorous analysis, which may include probing of the merits of the plaintiff's claim, but only for the purpose of determining whether the plaintiff has satisfied the prerequisites of Civ. R. 23." 136 Ohio St.3d 231, syllabus. Now that Ohio's Rule 23 is in line with prevailing interpretations of Federal Rule 23, class certification decisions in Ohio courts should be based upon a rigorous analysis of the evidence that is in the record -- and not just upon the plaintiff's allegations or theories.
As noted above, the reasoning in Cullen was premised, in part, on the U.S. Supreme Court decision in Wal-Mart, which arose from a massive employment discrimination class action. The Cullen court quoted approvingly from Wal-Mart on the standards for 23(B)(2) certification:
“[It] applies only when a single injunction or declaratory judgment would provide relief to each member of the class. It does not authorize class certification when each individual class member would be entitled to a different injunction or declaratory judgment against the defendant.”
131 S. Ct. at 2557.
Thus, an important U.S. Supreme Court employment class action decision has provided the impetus to update Ohio class action jurisprudence and aid Ohio employers in their defense of class action litigation.
BakerHostetler represented State Farm, the Appellant in Cullen.
The Bottom Line: The Cullen opinion, along with Stammco, updated Ohio class action jurisprudence and reiterated that a trial court must conduct a “rigorous analysis” at the certification stage to determine if a case meets Rule 23’s requirements. The opinion also recognized that a higher standard of scrutiny should be applied to expert opinions offered to support class certification. Hence, Cullen will be a great benefit to employers defending class actions.