2019 Ohio 4789
Ohio Ct. App.2019Background
- Plaintiffs Theodore Dumas and Charlene Parker bought a vehicle from North East Auto Credit, L.L.C. (NEAC) under a contract that allows either party to elect arbitration and states that if a dispute is arbitrated the plaintiff waives the right to participate in class actions.
- Dumas and Parker filed an individual lawsuit; NEAC consented to litigate the individual claims while preserving an arbitration defense.
- Over a year later, plaintiffs orally obtained leave to amend and added putative class-action allegations; the record is silent about whether NEAC consented to the class aspect of the amendment.
- NEAC promptly moved to strike the class claims or, alternatively, to stay the case pending arbitration of the class members’ claims; the trial court denied the stay, finding NEAC had waived the right to arbitrate as to putative class members.
- On appeal the Eighth District had jurisdiction only over the denial of the stay pending arbitration; the court analyzed waiver and the timing of when arbitration defenses may be raised against unnamed class members.
- The court concluded Gembarski (Ohio Sup. Ct.) controls: defendants need not assert arbitration defenses against unnamed putative class members until class certification; because those members are not yet parties, a stay to compel class-wide arbitration is premature.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NEAC waived the right to assert arbitration against putative class members | Dumas/Parker: NEAC implicitly consented to the amended complaint (including class claims) and thereby waived arbitration | NEAC: did not consent; preserved arbitration; class claims added later without consent | Court: Trial court erred finding waiver as to putative class members; waiver improper pre-certification |
| Whether NEAC could obtain a stay to compel arbitration of putative class members before class certification | Dumas/Parker: stay unnecessary; NEAC waived arbitration | NEAC: stay appropriate because its contracts use the same arbitration language across transactions | Court: Denial of stay affirmed — stay to compel arbitration of unnamed class members is premature until class certification |
| Whether the trial court’s denial of stay should be reversed because of procedural posture (leave to amend / App.R.9(C) issues) | Dumas/Parker: (implicit) amendment was proper and NEAC had notice | NEAC: trial court erred in granting leave and refused App.R.9(C) statement | Court: Appellate jurisdiction limited to stay denial; leave-to-amend and App.R.9(C) issues are interlocutory and not decided here |
Key Cases Cited
- In re Checking Account Overdraft Litigation, 780 F.3d 1031 (11th Cir. 2015) (class certification "reifies" unnamed class members and makes them subject to court power)
- Kincaid v. Erie Ins. Co., 944 N.E.2d 207 (Ohio 2010) (no justiciable controversy between defendant and unnamed putative class members before certification)