COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA Nos. 71588 & 71633 DEEGAN & MCGARRY, ET AL. JOURNAL ENTRY Plaintiff-appellees AND vs. OPINION MED-COR, ET AL. Defendant-appellants DATE OF ANNOUNCEMENT JANUARY 15, 1998 OF DECISION CHARACTER OF PROCEEDINGS Civil appeal from Court of Common Pleas Case No. CV-274292 JUDGMENT DISMISSED DATE OF JOURNALIZATION - ii - APPEARANCES: For plaintiff-appellees: For defendant-appellants-- THOMAS J. SCANLON, ESQ. Lake Hospital Systems, TIM L. COLLINS, ESQ. Meridia Health System, DENNIS M. COYNE, ESQ. MetroHealth System, Donahue & Scanlon Richmond Heights General 3300 Terminal Tower Hospital, St. Alexis 50 Public Square Hospital Medical Center, Cleveland, OH 44113 St. Luke's Medical, Merida Huron: EDWARD F. HABER, ESQ. MICHELLE BLAUNER, ESQ. DEBRA A. COLEMAN, ESQ. Shapiro, Haber & Urmy ARTHUR M. KAUFMAN, ESQ. 75 State Street MARK GRIFFIN, ESQ. Boston, MA 02109 DAVID C. WEINER, ESQ. Hahn, Loeser & Parks 200 Public Square #3300 Cleveland, OH 44114 - iii - PMSI, L.P.: PATRICK F. HAGGERTY, ESQ. ROBERT F. WARE, ESQ. Thompson, Hine & Flory, LLP 3900 Key Tower 127 Public Square Cleveland, OH 44114-1216 St. Joseph Hospital: JAMES W. MOENNICH, ESQ. Cook & Batista Co., LPA 209 Sixth Street Lorain, OH 44052 Riverside Methodist Hospital, Grant Hospital, Columbus Community Hospital, Park Medical Center, St. Ann's Hospital, Southwest General Hospital, Jewish Hospital: JOHN F. BIRATH, JR., ESQ. Bricker & Eckler 100 South Third Street Columbus, OH 43215-5100 Doctors Hospital: JOSEPH C. FELICIANO, ESQ. Baker & Hostetler 1900 East Ninth Street, #3200 Cleveland, OH 44114-3485 Keen Imaging Medical Records Service: C. RICHARD McDONALD, ESQ. 1700 Midland Bldg. Cleveland, OH 44115 - iv - The Cleveland Clinic Foundation, Brentwood Hospital, Meridia Hillcrest Hospital, Meridia Euclid Hospital, Meridia Huron Hospital and Meridia Suburban Hospital: MICHAEL BRITTAIN, ESQ. JAMES F. LANG, ESQ. Calfee, Halter & Griswold 800 Superior Avenue, #1800 Cleveland, OH 44114-2688 University Hospital of Cleveland and Euclid MEDNET: STEPHEN D. WALTERS, ESQ. DAVID C. LAMB, ESQ. Weston, Hurd, Fallon, Paisley & Howley 50 Public Square, #2400 Cleveland, OH 44113-2241 St. Alexis Hospital: ERNEST AUCIELLO, ESQ. WILLIAM A. VISCOMI, ESQ. Gallagher, Sharp, Fulton & Norman 1501 Euclid Avenue, 6th Floor Cleveland, OH 44115 - v - Smart Corporation, Recordex Services, Inc.: DAVID ZALESNE, ESQ. Montgomery, McCracken, Walker & Rhoads Three Parkway Philadelphia, PA 19102 JAMES D. WILSON, ESQ. Walter & Haverfield 50 Public Square, #1215 Cleveland, OH 44113 Children's Hospital: JAMES A. WILSON, ESQ. Vorys, Sater, Seymour & Pease 52 East Gay Street P.O. Box 1008 Columbus, OH 43215-1008 Hospital Correspondence Corporation: RONALD ISROFF, ESQ. JENNIFER H. GORMAN, ESQ. Ulmer & Berne 1300 East Ninth Street #900 Cleveland, OH 44114 Med-Cor, Inc.: THEODORE M. ROWEN, ESQ. TERESA L. GRISBHY, ESQ. SPRENGLER NATHANSON 608 Madison Avenue, #1000 Toledo, OH 43604-1169 - vi - Mt. Carmel Hospital: VICTORIA L. VANCE, ESQ. Arter & Hadden 925 Euclid Avenue Cleveland, OH 44115-1475 Fairview General Hospital: JEFFREY A. HEALY, ESQ. Arter & Hadden 925 Euclid Avenue, Suite 1100 Cleveland, OH 44115-1475 Childrens Hospital: JOEL I. RATNER, ESQ. Vorys, Sater, Seymour & Pease 2100 One Cleveland Center 1375 East Ninth Street Cleveland, OH 44114-1724 ST. FRANCIS HOSPITAL 3131 Queen City Avenue Cincinnati, OH 45238 - 2 - PATTON, J. The trial court certified as a class of plaintiffs three law firms and all persons who were patients of twenty-seven hospitals in the Cleveland, Columbus and Cincinnati metropolitan areas who had permitted their attorneys (whether named in the suit or not) to request their medical records from seven medical records services employed by the defendant hospitals. The dispositive issue, raised in plaintiffs' motion to dismiss this appeal, is whether the class certification order is a final, appealable order. The plaintiff class consists of patients and their attorneys who have requested medical records from defendant hospitals. The hospitals employ defendant records services that copy medical records for the hospitals. Plaintiffs allege these services overcharge plaintiffs and at the same time kick back a portion of the fees they receive to the hospitals in the form of referral fees or free photocopies for other photocopy services required by the hospitals. Our appellate jurisdiction is limited to reviewing final orders. See Art. IV, Section 3(B)(2) of the Ohio Constitution; R.C. 2505.03. A further limitation on our jurisdiction is contained in R.C. 2505.02, which defines a final order as (1) one that affects a substantial right in an action which in effect determines the action and prevents a judgment, (2) an order that affects a substantial right made in a special proceeding or upon - 3 - a summary application in an 1 the order appealed from is the certification of action after judgm class pursuant to Civ.R. 23 (an order that neither determines the action nor vacates or sets aside a judgment), the finality of this appeal is governed by the language of R.C. 2505.02 which refers to an order that affects a substantial right made in a special proceeding. The first inquiry is whether the order was entered in a special proceeding. See Polikoff v. Adam (1993), 67 Ohio St.3d 100, 108, fn. 8. In Polikoff, the syllabus states, [o]rders that are entered in actions that were recognized at common law or in equity and were not specially created by statute are not orders entered in special proceedings pursuant to R.C. 2505.02. A two-step analysis is to be employed when determining whether an order has been entered in a special proceeding. First, the court must determine whether the action was recognized in equity, at common law, or established by special legislation. Id. at 107. Second, the court must determine the nature of the relief sought, recognizing that a special proceeding occurs where a party either files a special petition seeking a remedy that was 1 Another limitation on appellate jurisdiction, not applicable to this appeal, is Civ.R. 54(B), which limits appellate jurisdictionto appeals where all claims against all parties have been adjudicated, unless the trial court certifies that there is no just reason for delay. See Noble v. Colwell (1989), 44 Ohio St.3d 92. - 4 - conferred upon that party by statute or is a proceeding that represents an essentially independent judicial inquiry. Id. In Blumenthal v. Medina Supply Co. (1995), 100 Ohio App.3d 473, we found the grant of class certification was not a final appealable order under Polikoff because class action suits were known at common law; hence, they were not special proceedings as required by R.C. 2505.02. See, also, DeBaggis v. Symthe Cramer Co.(June 8, 1995), Cuyahoga App. No. 68332, unreported at 2 ( a grant of class certification is not a final appealable order. ). Although this holding would seem dispositive of the motion to dismiss, defendants maintain we may still consider this appeal because the relief sought by plaintiffs under the Ohio Consumer Sales Practices Act specifically relates to class actions for money damages under R.C. 1345.09(B). They maintain that certification of a class under that section may only occur after the court has found the substantive conduct at issue to be deceptive or unconscionable. Certification of a class under R.C. 1345.09(B) requires a prior determination that the act or practice violated R.C. 1345.02 or 1345.03. In the ordinary class action case, an order certifying the class does not determine the action because the court may decertify the class at any point in the proceedings. Blumenthal, supra, at 475, citing Dayton Women's Health Ctr. v. Enix(1990), 52 Ohio St.3d 67, 76 (Resnick, J., dissenting). The trial court's order granting the motion to certify the class made - 5 - no findings, much less the determination required by R.C. 1345.09(B). Nevertheless, the trial court may yet in its discretion decide that plaintiffs have not or no longer meet the criteria of a class under Civ.R. 23 and decide to decertify the class, and such an order would have no affect on the substantive merits of plaintiffs' claims. Defendants also argue that certification of the class could only be made under R.C. 1345.09(B) if the court determines that the allegations of the complaint in fact constituted violations of the Consumer Sales Practices Act. We disagree. The court's certification of this class under R.C. 1345.09(B) does not constitute ipso facto proof of a Consumer Sales Practices Act violation by these particular defendants. Instead, it merely signifies judicial recognition that the practice complained of has previously been determined to be a violation, not that the specific allegations of the complaint are true by virtue of the class certification. For example, suppose a group of plaintiffs filed suit against a car dealership alleging the dealership turned back odometers on all used cars it sold. That practice of turning back car odometers would be a violation of the Consumer Sales Practices Act, but it would remain a question for the trier of factas to whether that particular car dealership engaged in the alleged violation. - 6 - Accordingly, we find the court's certification of this class did not constitute a final, appealable order. The motion to dismiss is granted. Dismissed. - 7 - It is ordered that appellees recover of appellants their costs herein taxed. It is ordered that a special mandate issue out of this court directing the Court of Common Pleas to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. JAMES D. SWEENEY, C.J., CONCURS. ROBERT E. HOLMES, J.,* CONCURS IN PART AND DISSENTS IN PART. See Concurring and Dissenting Opinion, Holmes, J., attached. JUDGE JOHN T. PATTON *SITTING BY ASSIGNMENT: ROBERT E. HOLMES, Retired Justice of The Supreme Court of Ohio. N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the clerk per App.R. 22(E). See, also S.Ct.Prac.R. II, Section 2(A)(1). COURT OF APPEALS OF OHIO EIGHTH DISTRICT COUNTY OF CUYAHOGA NOS. 71588 and 71633 DEEGAN & MCGARRY, ET AL. : CONCURRING PLAINTIFF-APPELLEES : AND v. : DISSENTING MED-COR, ET AL. : OPINION DEFENDANT-APPELLANTS : DATE: January 15, 1998 HOLMES, J., CONCURRING IN PART AND DISSENTING IN PART: I am in agreement that in applying the law of Polikoff v. Adam(1993), 67 Ohio St.3d 100; Walters v. The Enrichment Ctr. of Wishing Well, Inc. (1997), 78 Ohio St.3d 118, and Blumenthal v. Medina Supply Co. (1995), 100 Ohio App.3d 473, a class certification order pursuant to Civ.R. 23 is not a final appealable orderunder R.C. 2505.02. Therefore I concur that the determination of the trial court specifically regarding the requirements of Civ.R. 23 having been met are not reviewable at this time. - 2 - However, we are dealing with a hybrid variety of class certification order in this matter. Plaintiffs-appellees seek damages against the defendants alleging in their complaint that the defendants committed unfair, deceptive and unconscionable acts and practices in violation of Ohio Revised Code Sections 1345.02 and 1345.03 of the Consumer Sales Practices Act. The Complaint in addition to seeking declaratory relief from the alleged violation of the aforestated section of law, also seeks compensation under CSPA for actual losses, statutory damages, treble damages and attorneys fees. Plaintiffs also filed a motion for class certification under Civ.R. 23(B)(2) and 23(B)(3). Without making any findings on the record, the trial court granted plaintiffs' amended Motion for Class Certification. Chapter 1345 of the Ohio Revised Code, the Consumer Sales Practices Act prohibits unfair or deceptive acts and unconscionable acts or practices by suppliers in consumer transactions. Section 1345.03 sets forth designated unconscionable sales practices. Plaintiffs in their Complaint here rely primarily upon subsection (B)(2) of R.C. 1345.03, which is as follows: (2) Whether the supplier knew at the time the consumer transaction was entered into that the price was substantially in excess of the price at which similar property or services were readily obtainable in similar consumer transactions by like consumers. - 3 - R.C. 1345.09 provides for private remedies where there has been alleged violations of the Consumer Sales Practices Act. Such section, pertinent part is as follows: (A) Where the violation was an act prohibited by section 1345.02 or 1345.03 of the Revised Code, the consumer may, in an individual action, rescind the transaction or recover his damages. (B) Where the violation was an act or practice declared to be deceptive or unconscionable by rule adopted under division (B)(2) of section 1345.05 of the Revised Code before the consumer transaction on which the action is based, or an act or practice determined by a court of this state to violate section 1345.02 or 1345.03 of the Revised Code and committed after the decision containing the determination has been made available for public inspection under division (A)(3) of section 1345.05 of the Revised Code, the consumer may rescind the transaction or recover, but not in a class action, three times the amount of his actual damages or two hundred dollars, whichever is greater, or recover damages or other appropriate relief in a class action under Civil Rule 23, as amended. * * * The underlying cause of action as being pursued by the plaintiffs here has been specifically provided for by statute, and the remedies found therein including treble damages and attorney feesin an individual action, or recover damages, or appropriate relief and attorney fees in a class action were not available in an action at Common Law. The appellees argue that this case is indistinguishable from Polikoff, supra,because they state that here too the question of - 4 - whether the action meets the requirements of Civ.R. 23 will be preserved throughout the litigation. However, unlike the circumstances inPolikoff, and the cause of action in Blumenthal, supra, a plaintiff's right to seek money damages under the CSPA is conferred by statute that requires that certain conditions be present in order to bring such action, either an individual action, or a class action. R.C. 1345.09 would seem to require the trial court to determine whether the complaint falls with subsection (A) as an individual action, or whether subsection (B) is applicable in that there has been an alleged act or practice thathas been declared to be deceptive or unconscionable by rule adopted under division (B)(2) of section 1345.05 of the Revised Code, or an act or practice determined by a court of this state to violate section 1345.02 and 1345.03 of the Revised Code. And further whether such act or practice was committed after the decision has been made available for public inspection under division (A)(3) of section 1345.05 of the Revised Code. It is clear that these sections of the Act make a substantive distinction between pursuingremedies in an individual action, and pursuing remedies in a class action. Consequently before a class action for damages can be certified under the consumer practices statute, a trial court must not only find that the procedural requirements of Civ.R. 23 are satisfied, but first must find that the substantive requirements of R.C. 1345.09(B) are satisfied including the requirement that the conduct at issue has been found - 5 - to be deceptive or unreasonable, either by rule, or court decision, and made public by the Attorney General per R.C. 1345.05(A)(3). The trial court, in review of the material before it in the preliminary stages of a sought for class action in a CSPA action, may find that the conditions within 1345.05(A)(3) have been met and then proceed to a determination of the class action pursuant to Civ.R. 23. Contrarily the trial court may find that the conditions of R.C. 1345.05(A)(3) have not been met. In such event the court may hold that the action could not proceed, and enter an order dismissing the action. It should be pointed out here that the enactment of Chap. 1345 of the Revised Code, the Consumer Sales Practices Act, has not limited the remedies available to these plaintiffs in that R.C. 1345.13 specifically provides that: The remedies in Sections 1345.01 to 1345.13 of the Revised Code are in addition to remedies otherwise available for the same conduct under state or local law. I believe that this section of Chapter 1345 adds further support to the argument that the provisions of the sections here under consideration present a special proceeding provided by law. Based upon the foregoing, in my view, a motion to certify a class action in a suit for money damages under the Consumer Sales Practices Act is in the nature of a special proceeding that is conferred solely by statute, and therefore the order granting certification is subject to appellate review, at least in so far - 6 - as the jurisdictional requirements set forth within Chapter 1345. .