CINCINNATI BAR ASSOCIATION v. VARDIMAN
No. 2014-0358
Supreme Court of Ohio
Decided February 9, 2016
2016-Ohio-422
{¶ 22} Accordingly, Edwin Lowe Vardiman Jr. is suspended from the practice of law in Ohio for one year, with the final six months stayed on the conditions that he comply with the terms of his OLAP contract, maintain appropriate medical and psychological treatment, submit quarterly reports documenting his compliance with the foregoing obligations to a monitoring attorney selected by relators, and engage in no further misconduct. If Vardiman fails to comply with these conditions, the stay will be lifted, and he will serve the full one-year suspension. Costs are taxed to Vardiman.
Judgment accordingly.
PFEIFER, LANZINGER, KENNEDY, and FRENCH, JJ., concur.
O’CONNOR, C.J., and O’DONNELL and O’NEILL, JJ., dissent and would not stay any portion of the suspension.
Bruce A. McGary and John S. Mengle, Bar Counsel, for relator Warren County Bar Association.
Rendigs, Fry, Kiely & Dennis, L.L.P., and Michael P. Foley; and Edwin W. Patterson III, General Counsel, for relator Cincinnati Bar Association.
Cline, Mann & Co., L.P.A., William Mann, and Richard A. Cline, for respondent.
LYCAN ET AL., APPELLEES, v. THE CITY OF CLEVELAND, APPELLANT.
No. 2014-0358
Supreme Court of Ohio
Submitted March 11, 2015—Decided February 9, 2016.
2016-Ohio-422
{¶ 1} This interlocutory appeal arises in a class action challenging the city of Cleveland’s collection of fines for traffic violations captured by its automated cameras. Defendant-appellant, the city of Cleveland, appeals the decision of the Eighth District Court of Appeals, which affirmed the trial court’s class-certification order and the appointment of plaintiffs-appellees, Janine Lycan, Thomas Pavlish, Jeanne Task, Lindsey Charna, Ken Fogle, and John T. Murphy, as named plaintiffs. Because Cleveland has raised no arguments regarding class certification here, we affirm the Eighth District’s judgment in that respect.
{¶ 2} Cleveland also appeals the Eighth District’s ruling, based on the doctrine of res judicata, that appellees’ failure to appeal their traffic violations through Cleveland’s administrative process did not bar them from pursuing equitable and declaratory relief in the trial court. We hold, however, that the Eighth District erred in addressing res judicata because the trial court did not decide that question in its class-certification order. In the absence of a final, appealable order from the trial court addressing res judicata, the Eighth District improperly ruled on that issue in the first instance. We therefore vacate in part the judgment of the Eighth District regarding the preclusive effect of Cleveland’s administrative process, and we remand this matter to the trial court for further proceedings.
FACTS AND PROCEDURAL HISTORY
Overview of Cleveland’s use of automated traffic cameras
{¶ 3} Cleveland Codified Ordinances (“CCO”) 413.031 authorizes the use of automated traffic cameras in Cleveland to photograph red-light and speeding violations. The automated-camera system generates a ticket that is reviewed by a Cleveland police officer and is then sent by first-class mail or personal service to the vehicle’s owner.
{¶ 4} The ordinance imposes a $100 fine for red-light violations, a $100 fine for speeding violations up to 24 miles per hour over the speed limit, a $200 fine for speeding violations 25 miles per hour or more over the speed limit, and a $200 fine for any speed violation in a school or construction zone.
{¶ 6} The ordinance imposes liability on the “owner of a vehicle” committing a red-light or speeding offense.
Plaintiffs’ class-action lawsuit
{¶ 7} After the Dickson & Campbell decision was announced, Lycan filed a class-action complaint on February 26, 2009, in Cuyahoga County Court of Common Pleas challenging Cleveland’s imposition of fines against vehicle lessees under former
{¶ 8} Instead of filing a notice of appeal and requesting a hearing to challenge their tickets, Lycan, Pavlish, Charna, and Fogle paid the $100 fine. Murphy received five notices of liability and paid a reduced amount for one ticket; Cleveland agreed to accept this as payment in full for all five tickets. Task received notices of liability for two separate speeding violations. Task did not pay the fines for either ticket and subsequently received a demand for payment of $320 in fines and penalties.
{¶ 9} In their complaint, plaintiffs contended that Cleveland had no authority under the former version of
{¶ 10} On November 24, 2009, the trial court granted Cleveland’s motion for judgment on the pleadings, finding that plaintiffs had waived the right to pursue judicial remedies by paying their fines and failing to appeal their citations as permitted by
Plaintiffs’ appeal to the Eighth District (“Lycan I”)
{¶ 11} Plaintiffs appealed to the Eighth District Court of Appeals. The appeals court affirmed the trial court’s judgment dismissing plaintiffs’ claim for injunctive relief, finding that an injunction would serve no purpose because the offending ordinance has since been repealed. Lycan v. Cleveland, 8th Dist. Cuyahoga No. 94353, 2010-Ohio-6021, 2010 WL 5075520, ¶ 9 (“Lycan I”). But the appeals court reversed the trial court’s dismissal of plaintiffs’ claims for restitution and declaratory relief. Id. at ¶ 8, 10. The court held that plaintiffs’ failure to challenge the fines before payment did not necessarily foreclose plaintiffs from proving a set of facts under which it would be unjust for Cleveland to retain the paid fines. Id. at ¶ 8. The appeals court also reversed the denial of plaintiffs’ class-certification motion and remanded for further proceedings on that question. Id. at ¶ 11.
{¶ 12} This court declined jurisdiction over Cleveland’s discretionary appeal. 128 Ohio St.3d 1501, 2011-Ohio-2420, 947 N.E.2d 683.
Remand to the trial court
{¶ 13} On remand, and after completion of discovery, the trial court addressed the parties’ competing motions for summary judgment on plaintiffs’ unjust-enrichment claim. In support of its motion, Cleveland argued that the administrative process provided an adequate remedy to those receiving civil notices of liability and that the doctrine of res judicata therefore precluded review of the class’s unjust-enrichment claim. More specifically, Cleveland argued that its notices of liability, combined with the opportunity to participate in the administrative-appeals process, constituted quasi-judicial administrative proceedings from which the preclusive effect of res judicata arose.
{¶ 14} In an order dated February 8, 2013, the trial court granted partial summary judgment for plaintiffs. The court’s entry consisted of two lines. The first line stated that plaintiffs’ “[motion] for partial summary judgment * * * filed 7/25/2012, is granted.” The second line of the order set a hearing date on plaintiffs’ motion for class certification and appointment of class counsel. The
{¶ 15} The trial court held a class-certification hearing on February 19, 2013. Cleveland did not assert res judicata in its memorandum opposing class certification or at the class-certification hearing. On February 26, 2013, the court granted class certification and found that plaintiffs met the seven requirements of
Cleveland’s appeal to the Eighth District (“Lycan II”)
{¶ 16} On March 27, 2013, pursuant to
{¶ 17} From the outset, the court distinguished the two orders and noted that the February 8, 2013 partial summary judgment was “not yet appealable” and was “not addressed in the substance of [Cleveland]’s brief.” Lycan v. Cleveland, 2014-Ohio-203, 6 N.E.3d 91, ¶ 12 (8th Dist.) (“Lycan II”). The court therefore limited its review to the class-certification order: “the issues raised on appeal pertain to whether the Civ.R. 23(A) class action requirements were met and whether the action is barred by res judicata.” Id.
{¶ 18} The court began with the latter question and considered whether plaintiffs’ failure to appeal their traffic citations through Cleveland’s administrative procedure precluded their class action. The doctrine of res judicata, as the court noted, provides that “‘a valid, final judgment rendered upon the merits bars all subsequent actions based upon any claim arising out of the transaction or occurrence that was the subject matter of the previous action.’” Id. at ¶ 15, quoting Grava v. Parkman Twp., 73 Ohio St.3d 379, 653 N.E.2d 226 (1995), syllabus. The court concluded that plaintiffs’ failure to pursue administrative relief did not bar plaintiffs’ class action “because there was never an actual ‘judgment’ rendered by a court, or administrative tribunal, of competent jurisdiction.” Id. Moreover, the court noted, even if an administrative decision had been
QUESTION PRESENTED
{¶ 19} We accepted the following proposition of law:
Cleveland Codified Ordinance 413.031 provides an adequate remedy in the ordinary course of law to those receiving civil notices of liability by way of the administrative proceedings set forth in the ordinance. State ex rel. Scott v. Cleveland, 112 Ohio St.3d 324, 2006-Ohio-6573, 859 N.E.2d 923. Individuals who receive a civil citation issued pursuant to a local ordinance and who knowingly decline to take advantage of an available adequate remedy at law are precluded by res judicata from subsequently acting as class representatives and presenting equitable claims predicated in unjust enrichment. Accord Carroll v. Cleveland, 522 Fed.Appx. 299 (6th Cir.Ohio 2013).
See 139 Ohio St.3d 1416, 2014-Ohio-2487, 10 N.E.3d 737.
{¶ 20} In this court, Cleveland does not challenge the Eighth District’s conclusions regarding whether the proposed class met the requirements of
ANALYSIS
{¶ 21} We begin with two well-settled principles governing the scope of appellate review. First, under
{¶ 22} Applying these two principles, we conclude that the Eighth District improperly ruled on the question of res judicata, because the trial court did not decide that question in a final, appealable order.
{¶ 23} The parties do not dispute that the order that Cleveland appeals here—the trial court’s February 26, 2013 class-certification order—is a final, appealable order. See
{¶ 24} Nor does the trial court’s February 8, 2013 entry granting partial summary judgment provide a basis for reviewing the res judicata question. The Eighth District declined to review that ruling because it was “not yet appealable and is not addressed in the substance of [Cleveland’s] brief.” Lycan II, 2014-Ohio-203, 6 N.E.3d 91, at ¶ 12. We agree and note that if the order had been final and appealable on February 8, 2013, then Cleveland’s March 27, 2013 appeal to the Eighth District would have been untimely. We therefore decline to address the partial-summary-judgment order in this appeal.
{¶ 26} Next, Cleveland contends that it preserved the res judicata issue on appeal by raising plaintiffs’ lack of standing as a defense to class certification. Plaintiffs lack standing to pursue class-action relief, Cleveland argues, because they paid their fines or otherwise waived their administrative appeal and, therefore, have not suffered any cognizable injury. Res judicata and standing are not interchangeable defenses, however. “Res judicata raises merit questions that are to be resolved in a merit decision.” Shaper v. Tracy, 76 Ohio St.3d 241, 242, 667 N.E.2d 368 (1996), citing Shaper v. Tracy, 73 Ohio St.3d 1211, 1212, 654 N.E.2d 1268 (1995). Standing, on the other hand, addresses justiciability, see generally Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, ¶ 20-21, and “does not depend on the merits of the plaintiff‘s claim,” ProgressOhio.org, Inc. v. JobsOhio, 139 Ohio St.3d 520, 2014-Ohio-2382, 13 N.E.3d 1101, ¶ 7. None of the cases cited by Cleveland support the proposition that we should treat standing and res judicata as doctrinal counterparts. See, e.g., Johnson v. Allen, 101 Ohio App.3d 181, 185, 655 N.E.2d 240 (8th Dist.1995) (plaintiff who lacked standing to challenge guardianship appointment in probate court was barred by res judicata from challenging guardianship again in common pleas court). Cleveland’s challenge to plaintiffs’ standing during the class-action proceedings did not preserve the issue of res judicata on appeal of the class-certification order. And to the extent that Cleveland raises standing as an independent ground for reversing class certification, we decline to address that issue here because Cleveland did not present a proposition of law to this
{¶ 27} Finally, Cleveland argued below that an appeals court may review res judicata in the first instance as a subject-matter-jurisdiction question related to standing. While a reviewing court may consider a challenge to the court’s subject-matter jurisdiction for the first time on appeal, Jenkins v. Keller, 6 Ohio St.2d 122, 216 N.E.2d 379 (1966), paragraph five of the syllabus, either at the parties’ suggestion or sua sponte, State ex rel. Bond v. Velotta Co., 91 Ohio St.3d 418, 419, 746 N.E.2d 1071 (2001), neither res judicata nor standing implicates subject-matter jurisdiction.
{¶ 28} Cleveland argued that res judicata was a jurisdictional issue in the Eighth District and cited as support Lingo v. State, 8th Dist. Cuyahoga No. 97537, 2012-Ohio-2391, 2012 WL 1952282, aff‘d on other grounds, 138 Ohio St.3d 427, 2014-Ohio-1052, 7 N.E.3d 1188. In Lingo, the Eighth District used an amalgam of res judicata, standing, mootness, and subject-matter jurisdiction to hold that a class-certification order was void. The Eighth District appears to have used the framework from Lingo in Lycan II to review res judicata as a jurisdictional issue in the absence of a final, appealable order. Our precedent, however, does not support Cleveland’s argument or the Eighth District’s analysis.
{¶ 29} Like Cleveland in this case, the appellant in Lingo sought reversal of a class-certification order. Instead of addressing the class certification itself, the appellant argued that the plaintiffs lacked standing and that the trial court lacked subject-matter jurisdiction because res judicata barred the plaintiffs’ claims. Lingo at ¶ 15. The Eighth District noted the absence of any final, appealable order involving res judicata or standing. Id. Nevertheless, the Eighth District erroneously conflated the concepts of res judicata, standing, and subject-matter jurisdiction and addressed these issues as relevant to its review of class certification:
Jurisdiction is relevant when determining class certification because in order to represent the class, class members must have proper standing. Hamilton v. Ohio Sav. Bank, 82 Ohio St.3d 67, 70, 1998-Ohio-365, 694 N.E.2d 442. If the representative member’s claims are barred by res judicata, he lacks standing and cannot represent the class. Sierra Club v. Morton, 405 U.S. 727, 731-32, 92 S.Ct. 1361, 31 L.Ed.[2d] 636 (1972). Individual standing is a threshold to all actions, including class actions.
Id.; see also Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975).
Id. at fn. 3. The Eighth District ultimately held that res judicata barred the plaintiffs’ claims and that those claims were moot. Id. at ¶ 25. In the absence of a live case or controversy, the Eighth District concluded that the trial court lacked subject-matter jurisdiction and that any proclamation issued by the trial court, including its class-certification order, was void. Id.
{¶ 30} Our precedent does not support the Eighth District’s approach. This court has stated that res judicata is an affirmative defense that does not implicate a court’s subject-matter jurisdiction. See State ex rel. LTV Steel Co. v. Gwin, 64 Ohio St.3d 245, 251, 594 N.E.2d 616 (1992) (assertion of res judicata does not attack an appellate court’s jurisdiction); Shaper, 76 Ohio St.3d at 242, citing Shaper, 73 Ohio St.3d at 1212 (“res judicata raises merit questions” that are improperly asserted in a jurisdictional motion). We have also recently held that a party’s “lack of standing does not affect the subject-matter jurisdiction of the court.” See Bank of Am., N.A. v. Kuchta, 141 Ohio St.3d 75, 2014-Ohio-4275, 21 N.E.3d 1040, paragraph three of the syllabus. To the extent that the Eighth District relied on its previous ruling in Lingo to address res judicata here in the absence of a final, appealable order, that reliance was misguided.
{¶ 31} Finally, Cleveland did not assert a proposition of law or present any arguments in its briefs challenging the trial court’s finding that plaintiffs satisfied the
CONCLUSION
{¶ 32} For all these reasons, we affirm in part the Eighth District’s judgment and conclude that plaintiffs satisfied the requirements for class certification under
Judgment affirmed in part and vacated in part, and cause remanded.
O’CONNOR, C.J., dissents without opinion.
LANZINGER and KENNEDY, JJ., dissent.
CYNTHIA W. RICE, J., of the Eleventh Appellate District, sitting for O’DONNELL, J.
KENNEDY, J., dissenting.
{¶ 33} Respectfully, I dissent.
{¶ 34} The trial court specifically held in its order certifying the class that “[i]n its Summary Judgment Order, this Court has already ruled that there are no unique defenses to the claims of the named class members.” By explicitly referring to the summary-judgment order, the trial court indicated that within its analysis of the issues before certifying the class under
{¶ 35} In order for the majority to hold that the trial court did not address the defense of res judicata in its class-certification order and that there was no final, appealable order addressing res judicata, it must presume that the trial court did not conduct the rigorous analysis required by law for certifying a class. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 131 S.Ct. 2541, 2551-2552, 180 L.Ed.2d 374 (2011). But a trial judge is presumed to know and follow the law. See Woodford v. Visciotti, 537 U.S. 19, 24, 123 S.Ct. 357, 154 L.Ed.2d 279 (2002).
{¶ 36}
{¶ 37} This court has long held that because
{¶ 38} The trial court stated that the class to be certified was “[a]ll persons and entities who were not a ‘vehicle owner’ under CCO 413.031, but were issued a notice of citation and/or [assessed] a fine under that ordinance, prior to March 11, 2009, by/or on behalf of Defendant, City of Cleveland.” As defined, the class includes individuals who challenged a ticket under the city’s administrative-appeal process. But all the named class representatives had paid their tickets before the class action was filed and did not avail themselves of the administrative-appeal process to challenge the validity of the tickets.
{¶ 39} This distinction between other members of the defined class and the named class representatives calls into question the issue of typicality. Since all
{¶ 40} When the class was certified, the trial court stated that “[i]n its Summary Judgment Order, this Court has already ruled that there are no unique defenses to the claims of the named class members.” By explicitly referring to the summary-judgment order in the order certifying the class action, the trial court indicated that it had considered the defenses raised by the city in response to the motion for partial summary judgment within the analysis of the typicality prerequisite of
{¶ 41} In its November 21, 2012 reply brief in support of its own motion for summary judgment, the city argued that res judicata and mistake of law were defenses to the claims brought by the named class representatives. In granting the motion for partial summary judgment, the trial court issued a one-sentence order. While the order did not contain any findings of fact or conclusions of law, a logical conclusion is that the trial court rejected both of the city’s defenses.
{¶ 42} The majority opinion asserts that “it would be highly speculative to construe the class-certification order as an implicit ruling on res judicata” because the city had not argued that the action was precluded by res judicata in either the memorandum opposing class certification or at the class-certification hearing. Majority opinion at ¶ 25. However, the record contradicts the majority’s position.
{¶ 43} In its memorandum in opposition to the certification of the class, the city did argue that it was problematic for individuals who had paid their fines without availing themselves of the administrative-appeal process to serve as class representatives. The city argued: “All Plaintiffs, including Lycan, lack standing because each and every one of them admitted the violation by payment and/or not appealing the violation notice.” Although it labeled its argument as a standing argument, it correctly asserted the reasoning that applies to other defenses that destroy typicality. The city cited E. Texas Motor Freight Sys. Inc. v. Rodriguez, 431 U.S. 395, 97 S.Ct. 1891, 52 L.Ed.2d 453 (1977), which analyzed whether the named plaintiffs were members of the class they claimed to represent, for the proposition that the “class representative must be part of the class and ‘possess the same interest and suffer the same injury’ as the class members.” Id. at 403, quoting Schlesinger v. Reservists Commt. to Stop the War, 418 U.S. 208, 216, 94 S.Ct. 2925, 41 L.Ed.2d 706 (1974). This reasoning mimics the same concern courts have had when analyzing whether a defense unique to the named representatives negates typicality. See In re Schering Plough, 589 F.3d at 598 (the
{¶ 44} Moreover, while discussing typicality during the class-certification hearing, counsel for the named class representatives recognized that the trial court’s ruling on summary judgment had answered the question whether there were any defenses unique to those representatives: “[T]here’s no unique defenses, the claim is the named class and the summary judgment has always [sic] been granted.” The majority further concludes that the city was required to argue a futile position. Since the trial court’s granting of the motion for partial summary judgment was acknowledged in the class-certification hearing, the city was not required to reargue a settled issue.
{¶ 45} Finally, the majority opinion asserts that the city did not present a proposition of law challenging the trial court’s certification of the class. The only proposition of law presented by the city states:
Individuals who receive a civil citation issued pursuant to a local ordinance and who knowingly decline to take advantage of an available adequate remedy at law are precluded by res judicata from subsequently acting as class representatives and presenting equitable claims predicated in unjust enrichment.
(Emphasis added.) See 139 Ohio St.3d 1416, 2014-Ohio-2487, 10 N.E.3d 737. The gravamen of the proposition of law revolves around whether the application of the defense of res judicata bars the class representatives from serving the class as certified.
{¶ 46} For the foregoing reasons, I would hold that by referring to the summary-judgment order, the certification order rejected the city’s defenses of res judicata and mistake of law, because the certification order could be issued only after a rigorous analysis of the prerequisite of typicality. Moreover, the proposition of law presented in this appeal asserts that res judicata bars individuals who received a civil citation and declined to avail themselves of the civil-administrative-appeal remedy from serving as representatives for the certified class. Therefore, I would hold that the Eighth District did not err in
{¶ 47} Accordingly, I respectfully dissent.
LANZINGER, J., concurs in the foregoing opinion.
Bashein & Bashein Co., L.P.A., and W. Craig Bashein; Paul W. Flowers Co., L.P.A., Paul W. Flowers, and Justin D. Care; and The Dickson Firm, L.L.C., and Blake A. Dickson, for appellees.
Barbara A. Langhenry, Cleveland Director of Law, and Gary S. Singletary, Assistant Director of Law, for appellant.
Mayle, Ray & Mayle, L.L.C., Andrew R. Mayle, Jeremiah S. Ray, and Ronald J. Mayle; and Murray & Murray Co., L.P.A., and John T. Murray, urging affirmance for amici curiae Bradley L. Walker and Sam Jodka.
Michael K. Allen & Associates and Joshua Adam Engel; Markovits, Stock & DeMarco, L.L.C., and Paul M. De Marco; and Rittgers & Rittgers and Charles H. Rittgers, urging affirmance for amicus curiae Michael K. Allen.
Frost Brown Todd, L.L.C., Philip K. Hartmann, Stephen J. Smith, and Yazan S. Ashrawi; and Ohio Municipal League and John Gotherman, urging reversal for amicus curiae Ohio Municipal League.
Adam W. Loukx, Toledo Director of Law, and Eileen Granata, urging reversal for city of Toledo.
Bricker & Eckler, L.L.P., Quintín F. Lindsmith, James P. Schuck, and Sommer L. Sheely, urging reversal for amicus curiae Redflex Traffic Systems, Inc.
Baker & Hostetler, L.L.P., Gregory V. Mersol, and Chris Bator, urging reversal for amicus curiae Xerox State & Local Solutions, Inc.
Mannion & Gray Co., L.P.A., Judd R. Uhl, and Katherine L. Kennedy, urging reversal for village of Elmwood Place.