Ohio Supreme Court Hears Oral Argument in State Farm Class Action
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Recently, the Ohio Supreme Court heard oral argument in Cullen v. State Farm. We have discussed this case previously in a May 2012 article.
Here is a quick primer on the facts of the case. In March 2003, Mr. Cullen’s windshield was chipped by a stone — damage that was covered under his auto policy with State Farm. In exchange for State Farm waiving his deductible, Cullen agreed to have the crack repaired rather than to replace the entire windshield. Because the deductible was waived, the $50 repair was free.
In the subsequent class action lawsuit, Cullen claims he was misled. He says he was steered by State Farm’s third party representative to repair the crack and was never told that he could have gotten a “pay-out” for a replacement windshield. He seeks to represent at least 100,000 State Farm insureds in Ohio who filed glass-only windshield repair claims since 1991.
The trial court certified the proposed class and Ohio’s Eighth Appellate District affirmed. Central to the court’s theory of certification was its statement that “[c]lass certification does not go to the merits of the claim.” Cullen v. State Farm Mut. Ins. Co. 8th Dist. No. 95925, 2011-Ohio-662, at ¶ 55. The Cullen court thus appeared to limit its analysis to the plaintiffs’ allegations and declined to consider merits issues.
At the oral argument, counsel for State Farm encouraged the Court to "modernize" Ohio law by adopting the U.S. Supreme Court’s reasoning in Wal-Mart v. Dukes with regard to consideration of merits issues at the class certification stage.
Specifically, State Farm argued that the Court’s decision in Ojalvo v. Board of Trustees, 12 Ohio St. 3d 230, 466 N.E.2d 875 (1984), should be clarified. Ojalvo stated both that “class certification does not go to the merits” of the class claims and that some inquiry into the merits may be necessary in “establishing the validity of certification . . . .” Id. at 233. State Farm noted that many Ohio courts fail to follow the latter half of Ojalvo’s holding, forbidding any inquiry into the facts at the certification phase of a case.
State Farm also explained that the numerous individualized inquiries necessary to determine each class member’s liability and damages render the class action unmanageable. For example, at issue are three different policy contracts and each class member could have had one of 10 or more different windshields installed (each at different price points). The court would need to verify the model, make and availability of each windshield to determine the appropriate hypothetical replacement value.
Counsel for the class began his argument focusing on the fact that the case has been pending for five years and that the parties participated in extensive discovery, summary judgment briefing and a 10-hour certification hearing. Class counsel then disputed the notion that the trial court did not consider merits issues. As to manageability, class counsel argued that a simple calculation to determine windshield replacement value can be used across all class members using only the class member’s vehicle VIN number.
The argument closed with class counsel urging the Court to certify now and decertify later if the class becomes unmanageable down the road. State Farm pointed out that numerous courts have rejected this “certify now, worry later” approach. The better approach, State Farm argued, is to deny certification now and certify later when (if) the elements of Rule 23 are met.
We will continue to follow this case as it moves toward final disposition in the Ohio Supreme Court.
This is for informational purposes only. It is not intended to be legal advice and does not create or imply an attorney-client relationship.Download PDF