2019 Ohio 3231
Ohio2019Background
- Plaintiff Edward Gembarski sued PartsSource alleging improper withholding of commissions and sought class certification for current and former account managers.
- PartsSource had an employee arbitration program (started 2011); Gembarski did not sign the arbitration agreement but many putative class members had.
- PartsSource denied the class-action averments (including typicality and adequacy) in its answer but did not assert arbitration against Gembarski individually.
- Gembarski moved to certify the class in 2015; PartsSource opposed certification, arguing Gembarski was not typical/adequate because he was not bound by arbitration that many putative members had signed.
- The trial court (via magistrate) and the court of appeals held PartsSource waived the arbitration defense by not asserting it earlier; the Ohio Supreme Court granted review.
- The Ohio Supreme Court reversed, holding defendants need not assert defenses that apply only to unnamed, putative class members before class certification and may raise Civ.R. 23(A) challenges (e.g., typicality/adequacy) at the certification stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendant waived the right to assert arbitration or related arguments by not pleading arbitration in its answer | Gembarski: PartsSource knew of the arbitration program and by litigating without asserting arbitration it waived that defense, so absent class members can participate | PartsSource: Unnamed putative class members are not parties pre-certification; it had no duty to plead arbitration or move to strike and preserved its Civ.R. 23(A) challenge for certification stage | Held: No waiver. Defendant need not plead defenses applicable only to unnamed putative class members before certification; it properly raised Civ.R. 23(A) arguments at certification stage |
| Whether unnamed putative class members are parties prior to class certification, triggering pre-answer defenses | Gembarski: Notice of arbitration binding other potential class members created a duty to assert arbitration earlier | PartsSource: Putative members are not parties pre-certification, so no duty to assert arbitration in answer | Held: Putative members are not parties prior to certification; defendant had no duty to raise arbitration as a defense in its answer |
| Whether denial in the answer suffices to preserve Civ.R. 23(A) challenges | Gembarski: Denials were insufficient; defendant should have moved to strike or specifically plead arbitration defense | PartsSource: Civ.R. 8(B) requires only admission/denial; moving to strike was not required and plaintiff bears burden to prove certification | Held: General denial preserved the argument; defendant was not required to move to strike or plead specifics before certification |
| Proper timing to raise arbitration-as-defense versus arbitration-as-class-certification-attack | Gembarski: Early assertion required to avoid waiver | PartsSource: Arbitration defense against unnamed members and related Civ.R. 23(A) attack are properly addressed at certification | Held: Arbitration defense against unnamed class members and Civ.R. 23(A) attacks can be raised at class-certification stage; earlier assertion not required |
Key Cases Cited
- Devlin v. Scardelletti, 536 U.S. 1 (U.S. 2002) (limited circumstances allow unnamed class members certain rights pre-certification)
- Smith v. Bayer Corp., 564 U.S. 299 (U.S. 2011) (unnamed putative class members are not parties before class certification)
- In re Checking Account Overdraft Litigation, 780 F.3d 1031 (11th Cir.) (unnamed class members are not parties prior to certification; defenses against them need not be asserted early)
- Zepeda v. United States Immigration & Naturalization Serv., 753 F.2d 719 (9th Cir.) (court cannot bind putative class members before certification)
- Rolo v. City Investing Co. Liquidating Trust, 155 F.3d 644 (3d Cir.) (action is between individual plaintiffs and defendants until certification)
- Barnes v. First American Title Insurance Co., 473 F. Supp. 2d 798 (N.D. Ohio) (proposed plaintiffs are not parties prior to certification)