ATRA President Sherman “Tiger” Joyce writes in Confectionery News about the need to protect the food industry from absurd lawsuits by reforming state CPAs. To read the entire op-ed, please click here.
Ohio Supreme Court Rejects No-Injury Class Actions
On August 27, 2015, the Ohio Supreme Court ruled in Felix v. Ganley Chevrolet, Inc., 2015-Ohio-3450 (Aug. 27, 2015), that courts cannot certify class actions that include uninjured members. ATRA had filed an amicus brief urging the court to review the case, and, when it did so, to reject such “empty suit” litigation. In holding that “all members of a plaintiff class alleging violations of the Ohio Consumer Sales Practices Act (“OCSPA”) must have suffered injuries as a result of the conduct challenged in the suit,” the Court found ATRA’s arguments persuasive.
The decision reverses a trial court’s certification of a class action that included all consumers who purchased vehicles from a dealership by signing a contract that included an unenforceable arbitration provision. There was no evidence that any class member, aside from the class representative, had a dispute with the dealership or had experienced a loss resulting from the inclusion of the provision in a sales agreement. Most consumers were likely satisfied with their purchases and, since they had no dispute with the dealership, were not affected by the provision. Nevertheless, the trial court found it had “discretion” to award each consumer an arbitrary $200, a result at odds with Ohio’s consumer protection law, which authorizes statutory damages only for individual claims. An intermediate appellate court affirmed.
In a 6-1 decision authored by Chief Justice O’Connor, the Ohio Supreme Court held that unless all members of a plaintiff class have suffered injuries as a result of the conduct challenged in the suit, the class fails to meet the predominance standard required for class certification. Quoting scholarship by ATRA General Counsel Victor E. Schwartz and his colleague Cary Silverman, the court recognized that “[p]erhaps the most basic requirement to bring a lawsuit is that the plaintiff must suffer some injury. Apart from a showing of wrongful conduct and causation, proof of actual harm to the plaintiff has been an indispensable part of civil actions.” For that reason, the court held that “all members of a class in class action litigation alleging violations of the [state’s consumer protection law] must have suffered injury as a result of the conduct challenged in the suit.”
ATRA applauds the Ohio Supreme Court for bringing sanity to consumer class actions. Consumer protection laws should provide a remedy for individuals who experienced a financial loss as a result of unfair or deceptive business practice. Providing windfall awards to uninjured people is a misuse of the legal system and needlessly increases the price of goods and services for all.
ATRA President Sherman Joyce’s Op-Ed on Recently Dismissed Class Action Against Maker’s Mark
In conjunction with National Bourbon Day, ATRA President Tiger Joyce writes in the National Law Review about a recently dismissed consumer class action against Maker’s Mark, as well as the growing number of consumer protection lawsuits being filed by self-interested personal injury lawyers. To read the entire article, please click here and to read an article in Louisville Business First that references the National Law Review piece, please click here.
The Problems with the Missouri Merchandising Practices Act
Tiger Joyce, President of ATRA, and Dan Meehan, President/CEO of the Missouri Chamber of Commerce and Industry, write in today’s Southeast Missourian about the problems with Missouri’s Merchandising Practices Act (MMPA). They highlight a white paper, authored by Joanna Shepherd of the Emory University School of Law, which catalogs the problems with the MMPA, and conclude their piece by offering up a number of remedies to fix the statute. To read the entire article, please click here.
Consumer Class Actions and the Food Industry
American Tort Reform Association President Sherman “Tiger” Joyce writes in Food Processing about the growing trend of consumer class action lawsuits against the food industry. Joyce notes that there have been hundreds of often consumer class actions leveled against both food producers and sellers nationwide. Defending against these types of speculative, no-injury lawsuits is always costly – and those costs are always passed along in the form of higher retail prices. Joyce concludes by suggesting policy makers enact effective reforms that will assure that the law works primarily for consumers instead of self-interested plaintiff attorneys. To read the entire article, please click here.