Ohio Supreme Court Issues Favorable Ruling for Ganley and Ohio Dealers

The Ohio Supreme Court recently issued a ruling favorable to our industry in Felix et al., vs. Ganley Chevrolet, Inc., et al. The main issue on appeal in the Felix case involved the lower Court’s assessment of statutory damages under the Ohio Consumer Sales Practices Act (CSPA) to class members (Ganley customers) who had no actual damages. OADA and GCADA jointly supported Ganley with a ‘Friend of the Court Brief’ in the Supreme Court action.

The trial court certified a class based on Ganley’s use of an arbitration clause on its buyers orders that the trial court found to be unenforceable and in violation of the CSPA because the clause did not include certain relevant information, including the identity of the arbitrator and the arbitration fees. The court then awarded “discretionary damages” of $200 per transaction to all customers whose buyers orders included that arbitration provision, whether or not the customer actually had a dispute related to their purchase. This ruling ignored the plain language of the CSPA which requires consumers filing class actions to prove damages.  This case raised issues that would have widely impacted class action lawsuits and expanded exposure under the CSPA for all Ohio dealers.

In its ruling, the Ohio Supreme Court noted, “The trial court’s holding that it could award $200 to each member of the class as a matter of the trial court’s discretion is based on a fiction. There is no authority in the statutory scheme or in our precedent to support a damages award to a class member in class action litigation arising from the OCSPA absent a showing that the class member was injured and sustained damages as a result of the defendant’s conduct.”  The Court vacated the trial court’s order certifying the class and remanded the case to the trial court for proceedings consistent with that guidance.

This case is a victory for all dealers.  OADA’s Legal Defense Fund provided support for this case, which could have greatly expanded exposure under the CSPA for all Ohio dealers.  If you have any questions regarding this ruling or the OADA Legal Defense Fund, please contact Sara Bruce at sbruce@oada.com.