2017 Ohio 8940
Ohio Ct. App.2017Background
- Plaintiff Edward Gembarski, a commissioned PartsSource account/sales representative, sued on behalf of a putative class of current and former employees whose earned commissions were rescinded when customer invoices were unpaid within a 90-day period.
- Gembarski sought class certification in Portage County; the magistrate recommended certification and the trial court adopted that recommendation over PartsSource’s objections.
- The certified class: all current/former PartsSource Account Managers/employees who were subject to PartsSource’s policy of reducing, withholding, deducting or “pulling” earned commissions on sales of medical equipment/supplies.
- PartsSource argued (inter alia) the class definition was vague/unascertainable, membership numbers were unsupported, the magistrate adopted plaintiff’s proposed findings verbatim, and many class members were bound by arbitration agreements that Gembarski was not.
- The court reviewed Civ.R. 23 prerequisites (identifiability, numerosity, commonality, typicality, adequacy, and one of the 23(B) tests) and Civ.R. 23(B)(3) predominance/superiority; it found the record supported certification and that PartsSource had waived the arbitration defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the magistrate’s factual findings (verbatim from plaintiff) lacked competent evidence | Gembarski relied on testimony, company records, and depositions showing a uniform withholding practice and numerous affected reps | PartsSource said findings contained errors, misstatements, and unsupported numbers | Court found magistrate’s findings supported by record; adoption not an abuse of discretion |
| Whether class definition is ascertainable/definitive | Class defined by a neutral criterion: employees subjected to the commission-withholding policy | PartsSource claimed the definition presumes wrongdoing and its records cannot identify who was exposed to wrongful conduct | Court held class identifiable by the objective criterion of being subject to the withholding policy; administratively feasible |
| Whether Civ.R. 23(A) prerequisites (numerosity, commonality, typicality, adequacy) were met | Gembarski: common nucleus of operative facts (uniform policy), numerosity (≈75+), typicality/adequacy satisfied; arbitration defense waived by PartsSource | PartsSource: insufficient commonality/typicality because of varied contracts, reinstatements, different compensation, and arbitration clauses binding many putative members but not Gembarski | Court affirmed numerosity, commonality, typicality, adequacy; concluded arbitration defense was waived by PartsSource and did not defeat typicality/adequacy |
| Whether Civ.R. 23(B)(3) predominance and superiority satisfied | Gembarski: common questions (policy, withholding) predominate; class action is superior and manageable | PartsSource: individual issues (contract variation, statutes of limitations, arbitration) predominate; class is unmanageable | Court held common issues predominate, class action is superior and manageable; certified the class |
Key Cases Cited
- Cullen v. State Farm Mut. Auto. Ins. Co., 137 Ohio St.3d 373 (rigorous analysis required for class certification)
- Hamilton v. Ohio Sav. Bank, 82 Ohio St.3d 67 (seven prerequisites for Civ.R. 23)
- In re Consolidated Mortgage Satisfaction Cases, 97 Ohio St.3d 465 (predominance and superiority under Civ.R. 23(B)(3))
- Warner v. Waste Mgmt., Inc., 36 Ohio St.3d 91 (class must be identifiable and administratively feasible)
- Stammco, L.L.C. v. United Tel. Co. of Ohio, 136 Ohio St.3d 231 (trial court may probe merits at certification stage)
- Marks v. C.P. Chemical Co., Inc., 31 Ohio St.3d 200 (abuse of discretion standard for class certification)
- Eastley v. Volkman, 132 Ohio St.3d 328 (sufficiency and weight of evidence standards)
- Natl. Labor Relations Bd. v. Alternative Entertainment, Inc., 858 F.3d 393 (6th Cir.) (arbitration/class-waiver issue discussed by concurrence)