2020 Ohio 3702
Ohio2020Background
- McAdams bought a certified preowned 2006 Mercedes ML350 (M272 engine) and experienced balance-shaft-gear and transmission conductor-plate problems requiring costly repairs.
- A federal class action, Seifi v. Mercedes‑Benz USA (filed 2012), alleged defective balance‑shaft gears in certain M272/M273 engines; the court conditionally certified a nationwide settlement class and required class members who wished to opt out to submit a written request to the designated claims administrator.
- On August 18, 2015 the federal court approved the Seifi settlement, expressly excluding only those who timely and validly submitted opt-out requests, and released MB USA from balance‑shaft‑gear claims of nonexcluded class members.
- McAdams filed her own suit in Franklin County on February 23, 2015 (before final approval); in deposition she acknowledged awareness of Seifi and that she had told class counsel she did not want to be in the class but did not follow the court’s formal opt-out procedure.
- The trial court granted MB USA summary judgment, concluding McAdams’s balance‑shaft‑gear claim was barred by the Seifi settlement; the Tenth District reversed, holding McAdams effectively opted out by her conduct; MB USA appealed to the Ohio Supreme Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether McAdams’s balance‑shaft‑gear claim is barred by the Seifi class settlement (res judicata) because she did not follow the court‑mandated opt‑out procedure | McAdams: her communications with class counsel, filing and maintaining the state suit, and providing identifying information amounted to an effective opt‑out | MB USA: the federal court defined the class and specified the sole opt‑out procedure; McAdams did not follow it and so remained a class member bound by the settlement | Held: Res judicata bars McAdams’s claim. The federal court determined class composition and nonexcluded members are bound; McAdams was not excluded. |
| Whether a state court may treat informal conduct as an opt‑out contrary to a federal court’s opt‑out determinations | McAdams: a liberal rule should allow reasonable expressions of exclusion to suffice (informal opt‑out) | MB USA: state court cannot relitigate a federal court’s finalized class‑certification/opt‑out determinations; full faith and credit/res judicata preclude that | Held: State court may not override the federal court’s determination; the Tenth District erred to reanalyze opt‑out and apply an informal‑opt‑out theory. |
Key Cases Cited
- Cooper v. Fed. Res. Bank of Richmond, 467 U.S. 867 (1984) (judgment in properly entertained class action binds class members in later litigation)
- Grava v. Parkman Twp., 73 Ohio St.3d 379 (1995) (preclusion bars relitigation of issues decided by a court of competent jurisdiction)
- In re Gilbraith, 32 Ohio St.3d 127 (1987) (consent/settlement judgment operates as res judicata like a judgment on the merits)
- Juris v. Inamed Corp., 685 F.3d 1294 (11th Cir. 2012) (absent class members are bound by class judgments and cannot avoid preclusion by attacking certification in a later suit)
- Frost v. Household Realty Corp., 61 F. Supp. 3d 740 (S.D. Ohio 2014) (discussion of liberal approach to recognizing informal opt‑outs)
- McCubbrey v. Boise Cascade Home & Land Corp., 71 F.R.D. 62 (N.D. Cal. 1976) (support for liberally construing expressions of intent to exclude from a class)