As we have written about previously here and here, the facts of Stammco involve the Stammco Appellees’ claim that they received third-party charges on their telephone bills for services they did not want or use.
In Stammco I, the Ohio Supreme Court reversed certification of a class defined as those who received these third party charges "without their permission" because this phrase was ambiguous and the class members were not readily identifiable. To identify class members, the trial Court would have had to individually determine whether and how each prospective class member had “authorized” the third-party charges.
On remand, Stammco presented a new class definition that replaced “without their permission” with: “no prior authorization from the customer in writing or by a method acceptable to Sprint.” After taking evidence, briefing and conducting an oral hearing, the trial Court denied certification finding that (1) the revised class definition was failsafe, (2) the action was brought against the wrong party, and (3) the law did not impose a duty upon UTO/Sprint to obtain authorization for third party charges.
The Sixth District reversed the denial of certification, finding that (1) the revised definition was neither failsafe nor ambiguous, and (2) the trial Court’s findings on the merits were improper as they did not relate to any determination of Civil Rule 23.
In their merit brief, the Stammco Appellees argue that the Sixth District's ruling is not at odds with Wal-Mart v. Dukes, as appellants UTO and Sprint contend. Stammco recognizes that determinations, with respect to the merits of its claims, are proper as to class certification when examined in order to determine if the requirements of Civil Rule 23 are met.
However, Stammco argues, the trial court did not analyze the Rule 23 requirements noting that review of the merits is only permitted to the extent necessary to determine whether a class exists under Rule 23. Because the trial Court did not analyze the Rule 23 factors, and the merits issues considered had “no connection” with the Rule 23 factors, Stammco argues, no merits issues should have been considered at all in the trial Court. Appellees’ Merit Brief, at 27. Thus, Stammco writes, the Sixth District’s decision is in harmony with Wal-Mart v. Dukes, 131 S.Ct. 2451 (2011), Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974) and Ojalvo v. Board of Trustees of Ohio State University, 12 Ohio St.3d 230 (1984). Id. at 23.
Stammco argues that to accept UTO/Sprint’s interpretation would be an “essential change to the nature of class certification” requiring merits inquiries at the class certification stage, even when those inquiries “would not address the elements of class certification.” Appellees’ Merit Brief, at 23.
Finally, Stammco addresses UTO/Sprint’s analysis of the Rule 23 factors, concluding that each of the factors is satisfied. The key common question is whether “Sprint’s failure to procure authorization from the customer before billing [a] third-party charge breach[es] any duty . . . .” Appellees’ Merit Brief, at 28. Further, this common question regarding UTO/Sprint’s obligation to its customers predominates over any individual issues. Id. Moreover, Stammco argues, the revised class definition is not failsafe because whether the charges were "authorized" by the consumer does not answer the question whether Sprint is liable.
Oral argument has not been set in the case. Stay tuned for further coverage of Stammco and other Ohio Supreme Court class action matters as they continue to progress through the Court.
