STAMMCO, L.L.C., D.B.A. THE POP SHOP, ET AL., APPELLEES, v. UNITED TELEPHONE COMPANY OF OHIO, D.B.A. SPRINT, ET AL., APPELLANTS.
No. 2008-1822
Supreme Court of Ohio
Submitted October 21, 2009—Decided March 24, 2010.
125 Ohio St.3d 91, 2010-Ohio-1042
{¶ 42} Finally, this court has many times stated that it avoids construing statutes that lead to illogical or absurd results. State ex rel. Haines v. Rhodes (1958), 168 Ohio St. 165, 5 O.O.2d 467, 151 N.E.2d 716, paragraph two of the syllabus; In re T.R., 120 Ohio St.3d 136, 2008-Ohio-5219, 896 N.E.2d 1003, ¶ 16. Hannum is currently the sheriff of Noble County. By the time the next elected sheriff takes office, Hannum will have been the sheriff for almost two years. But today this court concludes that the Noble County Board of Elections abused its discretion when it certified Hannum‘s candidacy for sheriff. This court concludes that a man who has been sheriff since May 2009 is unqualified to be a candidate for sheriff. How is that not an absurd result?
{¶ 43} I conclude that Knowlton failed to establish that the board of elections abused its discretion or clearly disregarded applicable law in determining that Hannum had met the requirements of
McTigue & McGinnis, L.L.C., Donald J. McTigue, Mark A. McGinnis, and J. Corey Colombo, for relator.
Patrick J. Piccininni, Special Counsel to Clifford N. Sickler, Noble County Prosecuting Attorney, for respondents.
{¶ 1} We accepted this discretionary appeal to consider two propositions concerning the definition of a class for purposes of a class action under
Case Background
{¶ 2} In June 2005, appellees, Stammco, L.L.C., d.b.a. The Pop Shop (“Stammco“), and its owners, Kent and Carrie Stamm, filed a complaint on behalf of themselves and all others similarly situated against United Telephone Company of Ohio, d.b.a. Sprint (“UTO“), and the Sprint Nextel Corporation (“Sprint“), who provided appellees with local and long-distance phone service. The complaint alleged that Stammco and other customers of UTO and Sprint had been damaged by appellants’ negligent acts and billing practices. Specifically, appellees alleged that UTO and Sprint had engaged in the practice of “cramming,” or causing unauthorized charges to be placed on their customers’ telephone bills. Appellees highlighted one incident, in which charges from a third party, Bizopia, appeared on Stammco‘s phone bill. Although Bizopia claimed that it had secured from a Stammco employee authorization to charge fees on the bill, Stammco claimed that the employee had explicitly told Bizopia that he did not have the authority to authorize such charges.
{¶ 3} Pursuant to
{¶ 4} UTO and Sprint appealed the order certifying the class, asserting in part that the trial court failed to carefully apply the requirements for class certification under
{¶ 5} After initially declining jurisdiction, Stammco, L.L.C. v. United Tel. Co. of Ohio, 120 Ohio St.3d 1488, 2009-Ohio-278, 900 N.E.2d 198, this court granted appellants’ motion to reconsider and accepted discretionary jurisdiction over appellants’ two propositions of law. Stammco, L.L.C. v. United Tel. Co. of Ohio, 121 Ohio St.3d 1430, 2009-Ohio-1296, 903 N.E.2d 327. The first states, “A plaintiff cannot define the class to include only individuals who were actually harmed.” The second states, “A class action cannot be maintained when only some class members have been injured.”
Legal Analysis
{¶ 6}
{¶ 7} In the present case, the trial judge and court of appeals determined that the class was proper under
{¶ 8} In Warner, the plaintiffs filed a lawsuit in response to alleged activities in and around a dump site by the defendants, including Waste Management, Inc. The trial court certified a class consisting of people who “lived, worked, resided or owned real property within a five-mile radius of the Waste Management * * * site.” Id. at 93, 521 N.E.2d 1091. We held that a class defined to include all people who had ever worked within five miles of a specific site did not permit identification of its members with a reasonable effort and that the trial court had abused its discretion in certifying a class whose members were not readily identifiable. Id. at 96, 521 N.E.2d 1091.
{¶ 9} On the other hand, in Hamilton, the trial court had denied plaintiffs’ motion seeking certification of a class and subclasses consisting of mortgagors on whose residential loans Ohio Savings Bank calculated interest according to a certain method. Hamilton, 82 Ohio St.3d at 69, 72, 694 N.E.2d 442. We held that an identifiable class existed because the trial court needed only to look at the actions or practices of Ohio Savings Bank to determine whether an individual was a member of the class or subclasses. Id. at 73, 694 N.E.2d 442. We rejected Ohio Savings Bank‘s argument that the trial court would be required to conduct an individual inquiry into each prospective member‘s knowledge or understanding of the method for calculating interest before ascertaining whether each person was a member of the proposed class. Because the bank was able to identify prospective class members with a reasonable effort, we concluded that there was an identifiable class. Id. at 72-73, 694 N.E.2d 442.
{¶ 10} In the case now before us, the class certified by the trial court does not have readily identifiable members and fails to meet the first requirement of
{¶ 11} Furthermore, unlike in Hamilton, the trial court cannot readily identify prospective class members. In Hamilton, the court needed only to review the bank‘s records to determine whether a person was a member of the class. Here, however, the court must determine individually whether and how each prospective class member had authorized third-party charges on his or her phone bill. The trial court must examine testimony by the person claiming to be a member of the class and what most likely will be conflicting testimony by Sprint or the third party. For example, the court must determine whether Stammco‘s employee had authority to authorize Bizopia‘s charges and whether the employee actually did so. Unlike the class in Hamilton, the class here cannot be ascertained merely by looking at appellants’ records. While it appears that the class is intended to consist only of customers who received unauthorized charges, the class definition prevents the class members from being identified without expending more than a reasonable effort. We conclude that a class action cannot be maintained under
{¶ 12} Rather than attempt to redefine the class ourselves, we remand the case to the trial court to do so, for two reasons. First, the parties did not have the opportunity to present and argue the merits of alternative class definitions in their briefs before us. Second, the trial judge who conducts the class action and manages the case must be allowed to craft the definition with the parties. See Marks v. C.P. Chem. Co., Inc. (1987), 31 Ohio St.3d 200, 201, 31 OBR 398, 509 N.E.2d 1249 (“A trial court which routinely handles case-management problems is in the best position to analyze the difficulties which can be anticipated in litigation of class actions. It is at the trial level that decisions as to class definition and the scope of questions to be treated as class issues should be made“). In Marks, we noted that “[e]ven if the appellate court does find an abuse of discretion, it should not proceed to formulate the class or issue itself.” Id. We thus conclude that it is proper for the trial court to redefine the class on remand.
{¶ 13} Because we remand the case to the trial court to clarify and complete the class definition, we do not reach appellants’ arguments that the class is a fail-safe class, that individualized issues predominate the class, that the class is unmanageable, and that a class action is not suitable for the issues present in this case.
{¶ 14} We hold that the class certified by the trial court as presently defined does not permit its members to be identified with a reasonable effort. We therefore reverse the judgment and remand the cause to the trial court so that it may clarify the class definition in a manner consistent with this opinion.
Judgment reversed and cause remanded.
LUNDBERG STRATTON, O‘CONNOR, and O‘DONNELL, JJ., concur.
MOYER, C.J., and CUPP, J., concur in part and dissent in part.
PFEIFER, J., dissents and would affirm the judgment of the court of appeals.
MOYER, C.J., concurring in part and dissenting in part.
Introduction
{¶ 15} I agree with the majority that the class definition in this case is ambiguous and that the matter should be remanded in order that the trial court may redefine the class. Therefore I concur in that portion of the majority opinion. But I do not completely agree with the analysis used by the majority in reaching that determination because the majority strays into issues of predominance and superiority. Therefore, I dissent from that portion of the majority opinion.
{¶ 16} In addition, I dissent from the majority opinion because I would address the appellants’ propositions of law. When the trial court redefines the class on remand, the court and the parties would benefit from a ruling on the issues raised in the propositions of law. Judicial economy would be served by determining these issues now, rather than allowing the issues to lurk on remand and resurface in a new appeal.
{¶ 17} I would hold that the class in this case was ambiguously defined, but was not otherwise improper. The trial court did not abuse its discretion when it determined that classwide issues are predominant in this case.
Law and Analysis
The class definition is ambiguous
{¶ 18} To properly establish a class under
{¶ 19} The class in this case is defined as follows: “All individuals, businesses or other entities in the State of Ohio who are or who were within the past four years, subscribers to local telephone service from United Telephone Company of Ohio d.b.a. Sprint who were billed for charges on their local telephone bills by Sprint on behalf of third parties without their permission. Excluded from this class are defendants, their affiliates (including parents, subsidiaries, predecessors, successors, and any other entity or its affiliate which has a controlling interest), their current, former, and future employees, officers, directors, partners, members, indemnities, agents, attorneys and employees and their assigns and successors.”
{¶ 20} I agree that the class definition is ambiguous. The phrase “without their permission” is unclear. We cannot discern whether the customers/plaintiffs should have given permission to United Telephone Company of Ohio, d.b.a. Sprint, or to the third parties for the charges, and what form that permission should have taken. Thus, the definition fails to unambiguously specify the criteria by which to determine whether a particular person is a member of the class. I concur in that portion of the majority opinion. As an appellate court, we should refrain from endeavoring to define the class; that responsibility rests with the trial court. Marks v. C.P. Chem. Co. (1987), 31 Ohio St.3d 200, 201, 31 OBR 398, 509 N.E.2d 1249. Therefore, I agree that the matter should be remanded to the trial court.
The determination of ambiguity under Civ.R. 23(A) should not be confused with the determination of the predominance of classwide issues and the superiority of a class action under Civ. R. 23(B)(3)
{¶ 21} In analyzing whether the class definition is ambiguous, the majority improperly includes issues relating to predominance and superiority under
{¶ 23} Yet according to the majority‘s analysis of the issue, the trial court cannot “readily identify” class members if there are differing facts and legal issues among them.
{¶ 24} In Hamilton, we rejected a similar argument: “[E]ven when a class is appropriately defined by reference to defendant‘s conduct, it is nevertheless indefinite if separate adjudications are likely required to finally determine the action.” Hamilton, 82 Ohio St.3d at 73, 694 N.E.2d 442. “The focus at this stage is on how the class is defined. The test is whether the means is specified at the time of certification to determine whether a particular individual is a member of the class. Planned Parenthood Assn. of Cincinnati, Inc. v. Project Jericho (1990), 52 Ohio St.3d 56, 63, 556 N.E.2d 157, 165. The question as to whether there are differing factual and legal issues ‘do[es] not enter into the analysis until the court begins to consider the
{¶ 25} Thus, we have already rejected an analysis that blends
common to the class predominated over individual questions, the court in Brown found, “[T]he Court will need to make individual determinations as to whether each proposed class member authorized the charges for which he was billed by defendants. The result will be multiple mini-trials, each requiring individual proofs.” Id. at *3.
The trial court did not abuse its discretion when it found that classwide questions of law and fact predominate
{¶ 27} Appellants contend in their second proposition of law that the class was improper under
{¶ 28} Appellants’ second proposition of law asks us to apply the long-settled law controlling class certification.
{¶ 29} A trial court must “find[] that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members” before it certifies a class under
{¶ 30} We have held that “[t]he mere existence of different facts associated with the various members of a proposed class is not by itself a bar to certification of that class. If it were, then a great majority of motions for class certification would be denied.
{¶ 31} This case presents the type of claims appropriate for class-action treatment because it includes common questions regarding significant aspects of the case which “arise from standardized forms or routinized procedures.” Hamilton, 82 Ohio St.3d at 84, 694 N.E.2d 442. As the court of appeals correctly
{¶ 32} We have consistently held that a trial court has discretion in determining whether to certify a class under
{¶ 33} Appellants direct us to four decisions of federal courts, which they believe should guide the outcome of this case. I would hold that those cases are distinguishable and that, in any case, the trial court did not abuse its discretion when it determined that classwide issues were predominant in this case.
{¶ 34} In two of the cited cases, the entanglement of multiple causes of action and multiple statutes and a lack of standardized practices led the federal courts to hold that individualized issues predominated. Sikes v. Teleline, Inc. (C.A.11, 2002), 281 F.3d 1350; Andrews v. AT & T (C.A.11, 1996), 95 F.3d 1014.
{¶ 35} Sikes and Andrews are conceptually similar to Schmidt v. Avco Corp., 15 Ohio St.3d at 314, 15 OBR 439, 473 N.E.2d 822, in which we held that “a class action would be inefficient and non-economical * * * because the claims raised involve noncommon issues that are either inextricably entangled with common issues or are too unwieldy to be handled adequately on a class action basis.”
{¶ 36} We distinguished Schmidt from Hamilton by noting that the claims in Schmidt involved many “inextricably entangled” “noncommon issues.” Hamilton, 82 Ohio St.3d at 83-84, 694 N.E.2d 442. In Hamilton, we explained that “class action treatment is appropriate where the claims arise from standardized forms or routinized procedures” despite the need for individualized proof on the issue of reliance. Id. at 84, 694 N.E.2d 442. Sikes and Andrews are distinguishable from this case because they involved a broader spectrum of claims and law and demanded an inquiry into the state of mind of each individual plaintiff. Sikes and Andrews do not aid in the disposition of this case.
{¶ 37} Appellants also direct us to Stern v. Cingular Wireless Corp. (Feb. 23, 2009), C.D.Cal. No. CV 05-8842, 2009 WL 481657, and Brown v. SBC Communications, Inc. (Feb. 4, 2009), S.D.Ill. No. 05-cv-777-JPG, 2009 WL 260770. While
{¶ 38} In Stern, the trial court refused to certify a class defined as cell-phone purchasers who claimed that certain services had been added to their plans without their permission. Id. at *2. The outcome in Stern was based on the plaintiffs’ inability to offer any evidence that would establish on a classwide basis which services had been selected by the customer at the point of purchase and which had been provided. Id. at *7-8.
{¶ 39} Similarly, in Brown, the plaintiffs claimed that the defendant had placed unauthorized monthly fees on their local phone bills. 2009 WL 260770 at *1. The court refused to certify the class, finding that “the Court will need to make individual determinations as to whether each proposed class member authorized the charges for which he was billed by defendants. The result will be multiple mini-trials, each requiring individual proofs. Consequently, there will be no judicial economy realized from certifying this action as a class action.” Id. at *3.
{¶ 40} Unlike in Sikes and Brown, the trial court in this case determined that a class action was appropriate. Relying on Ritt v. Billy Blanks Ents., 171 Ohio App.3d 204, 2007-Ohio-1695, 870 N.E.2d 212, the trial court found that individualized issues did not predominate and that the policies behind class actions supported allowing the class in this case. Although the unpublished district court cases Stern and Brown are somewhat similar to this case, that fact does not automatically mean that the trial court abused its discretion in certifying the class.
{¶ 41} Each class action is different and each trial court will decide issues of predominance based upon the facts present in the case before it. Thus, one court may appropriately certify a class, even if it resembles one that was not certified by another court under
The defined class is not a “fail-safe class”
{¶ 42} In their first proposition of law, appellants urge us to find that the class in this case is a “fail-safe class” and that it is therefore defectively defined.3
{¶ 43} We can resolve this issue by applying the holding in Ojalvo v. Bd. of Trustees of Ohio State Univ. (1984), 12 Ohio St.3d 230, 233, 12 OBR 313, 466 N.E.2d 875, that a court cannot reach the merits of a case at the class-certification stage. Here, the class definition contains the phrase “individuals * * * who were * * * billed for charges on their local telephone bills * * * on behalf of third parties without their permission.” Appellants contend that this phrase prohibits class certification because class membership cannot be determined until a finding on the issue of liability has been made. In so contending, appellants appear to concede that the lack of permission equates automatically with liability, but this is not the case. Defining the class in this way does not require a determination on the issue of liability or the merits of the underlying causes, because finding a class of customers who were assessed charges that they had not authorized does not require a determination that appellants are liable to the customers.1
{¶ 44} In sum, determination of membership in the class in this case does not depend on a predetermination of the merits of the case or liability of the appellants.
Conclusion
{¶ 45} For the foregoing reasons, I concur in part and dissent in part.
CUPP, J., concurs in the foregoing opinion.
predominantly with the notion of a “fail-safe class.” The remainder of appellants’ arguments under the first proposition of law deal mainly with alleged errors of the findings that a trial court must make in certifying a class and are not germane to the resolution of the fail-safe-class issue that we accepted for review.
Baker & Hostetler, L.L.P., Michael K. Farrell, Thomas D. Warren, Karl Fanter, and John B. Lewis, for appellants.
Aneel L. Chablani, Andrew D. Neuhauser, and Stanley A. Hirtle; Burdge Law Office Co., L.P.A., and Ronald L. Burdge; and Stephen Gardner, urging affirmance for amici curiae Advocates for Basic Legal Equality, Inc., and National Association of Consumer Advocates.
Linda S. Woggon, urging reversal for amicus curiae Ohio Chamber of Commerce.