Title: Stammco, LLC v. United Tel. Co. of Ohio

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Stammco, L.L.C., v. United Tel. Co. of Ohio, Slip Opinion No. 2013-Ohio-3019.] 
 
 
 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2013-OHIO-3019 
STAMMCO, L.L.C., ET AL., APPELLEES, v. UNITED TELEPHONE COMPANY OF 
OHIO ET AL., APPELLANTS. 
[Until this opinion appears in the Ohio Official Reports advance sheets,  
it may be cited as Stammco, L.L.C., v. United Tel. Co. of Ohio,  
Slip Opinion No. 2013-Ohio-3019.] 
Class actions—Consideration of issues relevant to both certification of class and 
merits of claim—Predominance requirement—Overbreadth of class 
definition. 
(No. 2012-0169—Submitted February 6, 2013—Decided July 16, 2013.) 
APPEAL from the Court of Appeals for Fulton County, No. 11-F-003,  
2011-Ohio-6503. 
____________________ 
SYLLABUS OF THE COURT 
At the certification stage in a class-action lawsuit, a trial court must undertake a 
rigorous analysis, which may include probing the underlying merits of the 
plaintiff’s claim, but only for the purpose of determining whether the 
plaintiff has satisfied the prerequisites of Civ.R. 23.  (Wal-Mart Stores, 
Inc. v. Dukes, 564 U.S. ___, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011), and 
SUPREME COURT OF OHIO 
2 
 
Amgen v. Connecticut Retirement Plans & Trust Funds, 568 U.S. ___, 133 
S.Ct. 1184, 185 L.Ed.2d 308 (2013), followed.)  
____________________ 
KENNEDY, J. 
I. Introduction 
{¶ 1} In this opinion, we address a single proposition of law by 
appellants, United Telephone Company of Ohio (“UTO”) and Sprint 
Corporation.1 
{¶ 2} UTO appeals from a judgment of the Sixth District Court of 
Appeals holding that the trial court abused its discretion in denying certification 
of plaintiffs’ class-action lawsuit.  We accepted for review the following 
proposition of law: “A trial court does not abuse its discretion by evaluating the 
merits of the plaintiffs’ claims when denying class certification.” 
{¶ 3} We hold that a trial court must conduct a rigorous analysis, which 
may include probing the merits of plaintiffs’ claims, to ensure that the 
prerequisites of Civ.R. 23 are satisfied.  Even though the trial court’s 
consideration of the merits here was improper, its order denying certification of 
the class was correct because plaintiffs’ proposed amended class does not satisfy 
the prerequisites of Civ.R. 23.  Therefore, we reverse the judgment of the court of 
appeals and reinstate the order of the trial court that rejected plaintiffs’ amended 
class definition, which in effect decertifies plaintiffs’ class-action lawsuit. 
II. Facts 
{¶ 4} In 2005, Stammco, L.L.C., a limited-liability company, and 
Stammco’s owners, Kent and Carrie Stamm, on behalf of other similarly situated 
                                                          
 
1 Plaintiffs’ amended complaint named Sprint Corporation and United Telephone Company of 
Ohio, doing business as Sprint, as the defendants.  Since May 17, 2006, UOT is no longer 
affiliated with Sprint.  Sprint remains a party and has filed briefs and motions jointly with UTO.  
Because only UTO’s business practices are at issue, we refer throughout this opinion to UTO only. 
 
January Term, 2013 
 
3
telephone customers, filed a complaint seeking to certify a class-action lawsuit 
against UTO. 
{¶ 5} UTO provided plaintiffs with local and long-distance phone 
service.  In their amended complaint, plaintiffs alleged that their phone bills from 
UTO also contained unauthorized charges from third parties, as part of a practice 
known as “cramming.”  Plaintiffs’ amended complaint alleged three theories of 
liability: (1) negligent billing, (2) “breach of the duty of good faith and fair 
dealing implied in contract,” and (3) unjust enrichment.  Plaintiffs sought 
injunctive relief and compensatory damages.  Plaintiffs proposed the following 
class definition: 
 
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 and 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 [sic], agents, attorneys and 
employees and their assigns and successors. 
 
 
{¶ 6} The trial court certified the class as defined.  UTO appealed.  The 
court of appeals affirmed the trial court’s judgment certifying the class, but only 
under Civ.R. 23(B)(3).  Stammco, L.L.C. v. United Tel. Co., 6th Dist. No. F-07-
024, 2008-Ohio-3845, ¶ 66-67. 
SUPREME COURT OF OHIO 
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{¶ 7} On appeal, we held that the class definition failed to readily 
identify prospective class members because (1) it was unclear whether class 
members were expected to give UTO or the third parties authorization to bill, or 
whether the third parties were expected to obtain authorization from class 
members, (2) it was unclear in the phrase “their permission” whom the word 
“their” referred to, and (3) it was unclear how authorization would occur.  
Stammco, L.L.C. v. United Tel. Co. of Ohio, 125 Ohio St.3d 91, 2010-Ohio-1042, 
926 N.E.2d 292, ¶ 10 (“Stammco I”).  We also held that the class was not readily 
identifiable, because individualized determinations would be needed as to 
“whether and how each prospective class member had authorized third-party 
charges on his or her phone bill” and the identification of class members would 
require “more than a reasonable effort.”  Id. at ¶ 11. 
{¶ 8} Accordingly, we reversed the judgment of the court of appeals and 
remanded the cause to the trial court to “redefine the class on remand.”  Id. at 
¶ 12.  However, we noted that we did not reach UTO’s arguments that the class 
was a fail-safe class,2 that individualized issues predominated in the class, that the 
class was unmanageable, and that the class was not suitable for the issues in the 
case.  Id. at ¶ 13. 
{¶ 9} On remand, plaintiffs proffered the following amended class 
definition:  
 
                                                          
 
2   
A fail safe class definition is one in which the putative class is defined by 
reference to the merits of the claim. See Messner v. Northshore Univ. 
HealthSystem, 669 F.3d 802, 826 (7th Cir.2012); Manual for Complex Litigation 
(Fourth) § 21.222 (2004). It requires a court to rule on the merits of the claim at 
the class certification stage in order to tell who was included in the class. Id. 
“Such a class definition is improper because a class member either wins or, by 
virtue of losing, is defined out of the class and is therefore not bound by the 
judgment.”  Messner, 669 F.3d at 826. 
 
Melton ex rel. Dutton v. Carolina Power & Light Co., 283 F.R.D. 280, 288 (D.S.C.2012). 
January Term, 2013 
 
5
All individuals, businesses or other entities in the State of 
Ohio who are or who were within the period four years prior to the 
initiation of this lawsuit to the present, subscribers to local 
telephone service from United Telephone Company of Ohio d.b.a. 
Sprint and/or any successor company providing that same service, 
and who were billed for third party charges as to which Sprint had 
no prior authorization from the customer in writing or by a method 
acceptable to Sprint sufficient for Sprint to verify that the customer 
had agreed to such charge. Excluded from the class are those 
customers who subscribed to and provided authorization for long 
distance services from a provider of toll services that were billed 
on the customers’ local telephone bills.  Also excluded from this 
class 
are 
defendants, 
their 
affiliates 
(including 
parents, 
subsidiaries, 
predecessors, 
successors, 
former 
and 
future 
employees, officers, directors, partners, members, indemnities 
[sic], agents, attorneys and employees and their assigns and 
successors). 
 
{¶ 10} After the hearing, the trial court issued a decision that stated: (1) 
“[T]he ‘class definition,’ as submitted by the Plaintiffs is a prohibited ‘fail-safe 
class,’ ” (2) “Plaintiff’s [sic] action has been brought against the ‘local exchange 
carrier,’ rather than the culprit ‘third party provider,’ ” and (3) “The action 
proposes to impose a ‘duty’ upon the Defendant Carrier, that is not required of 
them, according to the status of current legislation and case law.”  Consequently, 
the court held: “[T]he Plaintiffs have not met their burden of establishing, by a 
preponderance of the evidence, that a ‘class certification,’ is a proper one,” and it 
denied the plaintiffs’ amended motion for class certification. 
SUPREME COURT OF OHIO 
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{¶ 11} Plaintiffs appealed.  The court of appeals held that the amended 
class definition addressed the ambiguities in the class definition as found by this 
court.  Specifically, the court of appeals stated: 
 
The amended class now defines to whom permission is to be 
granted: appellee, whose permission was required: the customer, 
and the manner [in which] the permission was to be granted: in 
writing or an alternative method by which appellee could verify 
agreement. The amended definition deletes any reference to 
customers who receive unauthorized charges. In our view, the 
amended language satisfies the specific concerns of the court in its 
mandate for remand. 
 
2011-Ohio-6503, ¶ 39. 
{¶ 12} The court held that the amended class definition did not set forth a 
fail-safe class, because the amended class definition did not rely upon a 
determination of liability.  Id. at ¶ 42-46. 
{¶ 13} Finally, the court of appeals addressed the trial court’s conclusion 
that UTO had no duty to ensure that third-party charges that it was billing to its 
customers were authorized and its conclusion that the third parties who were 
initiating the charges were the real culprits.  The court of appeals held that “both 
rationales are improper incursions into the merits of this case.”  Id. at ¶ 49. 
{¶ 14} The court of appeals concluded: “Since two of the three reasons 
the trial court articulated for denying the class are improper considerations of the 
merits and the third reason is inapplicable as a matter of law, we must conclude 
that the trial court abused its discretion in denying class certification.”  Id. at ¶ 50.  
The court of appeals reversed the judgment of the trial court and remanded for 
further proceedings consistent with its decision. 
January Term, 2013 
 
7
{¶ 15} We denied UTO’s discretionary appeal.  131 Ohio St.3d 1511, 
2012-Ohio-1710, 965 N.E.2d 311.  However, we granted UTO’s motion to 
reconsider.  132 Ohio St.3d 1425, 2012-Ohio-2729, 969 N.E.2d 272. 
{¶ 16} UTO argues that Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 94 
S.Ct. 2140, 40 L.Ed.2d 732 (1974), and Ojalvo v. Ohio State Univ. Bd. of 
Trustees, 12 Ohio St.3d 230, 466 N.E.2d 875 (1984), have been misunderstood by 
courts, including the court of appeals herein, as prohibiting courts from 
considering the underlying merits of the plaintiffs’ claims in a class-action suit for 
the purpose of deciding whether the requirements of certification of the class have 
been satisfied.  UTO argues that the recent decision in Wal-Mart Stores, Inc. v. 
Dukes, 564 U.S. ___, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011), has clarified that 
courts may probe the merits in determining whether certification is proper under 
Civ.R. 23. Thus, UTO argues that the court of appeals erred in holding that the 
trial court abused its discretion when it considered the merits of plaintiffs’ claims. 
{¶ 17} The plaintiffs agree that courts may consider the underlying merits 
of a class action for purposes of determining whether the certification 
requirements are satisfied.  However, plaintiffs argue that the court of appeals did 
not err in reversing the trial court’s order, because the trial court improperly 
rejected plaintiffs’ proposed amended class definition.   
III. Analysis 
A. Civ.R. 23 Requirements 
{¶ 18} We begin our analysis by reviewing the requirements for certifying 
a class-action lawsuit.  The Ohio Rules of Civil Procedure are modeled after the 
Federal Rules of Civil Procedure, which were adopted in 1938 and have been 
amended several times.  Consequently, federal law interpreting a federal rule, 
while not controlling, is persuasive authority in interpreting a similar Ohio rule.  
Myers v. Toledo, 110 Ohio St.3d 218, 221, 2006-Ohio-4353, 852 N.E.2d 1176, 
¶ 18.  “Since the Ohio rule is identical to Fed.R.Civ.P. 23, with the exception of 
SUPREME COURT OF OHIO 
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Civ.R. 23(F) which is not involved in the discussion here, federal authority is an 
appropriate aid to interpretation of the Ohio rule.”  Marks v. C.P. Chem. Co., Inc., 
31 Ohio St.3d 200, 201, 509 N.E.2d 1249 (1987). 
{¶ 19} Pursuant to Civ.R. 23, plaintiffs must establish seven prerequisites 
in order to certify a class action: (1) an identifiable and unambiguous class must 
exist, (2) the named representatives of the class must be class members, (3) the 
class must be so numerous that joinder of all members of the class is impractical, 
(4) there must be questions of law or fact that are common to the class, (5) the 
claims or defenses of the representative parties must be typical of the claims and 
defenses of the members of the class, (6) the representative parties must fairly and 
adequately protect the interests of the class, and (7) one of the three requirements 
of Civ.R. 23(B) must be satisfied.  Warner v. Waste Mgt., Inc., 36 Ohio St.3d 91, 
94-96, 521 N.E.2d 1091 (1988). 
{¶ 20} If the court determines that the proposed class satisfies the first six 
prerequisites of Civ.R. 23(A), it must then determine whether a class action is 
maintainable under at least one of the three subsections in Civ.R. 23(B).  Warner 
at 94. 
{¶ 21} Under Civ.R. 23(B)(1)(a), a class action is maintainable “if 
separate actions would create a risk of inconsistent or varying adjudications with 
respect to individual members of the class that would establish incompatible 
standards of conduct for the party opposing the class,” and subsection (B)(1)(b) 
“will permit certification if separate actions would create a risk of adjudications 
that would as a practical matter be dispositive of the claims of non-parties or 
substantially impair or impede their ability to protect their interests.”  Id. at 95. 
{¶ 22} Under Civ.R. 23(B)(2), a class action is maintainable if “its 
primary application [is] injunctive relief.”  Id. 
{¶ 23} And finally, under Civ.R. 23(B)(3), a class action is maintainable if 
the plaintiff is seeking damages and the court makes two findings: “that the 
January Term, 2013 
 
9
common questions predominate over questions affecting only individual members 
and that a class action is superior to other available methods for the fair and 
efficient adjudication of the controversy.”  Id. at 96. 
{¶ 24} “The failure to meet any one of these prerequisites will defeat a 
request for class certification * * *.”  Schmidt v. Avco Corp., 15 Ohio St.3d 310, 
313, 473 N.E.2d 822 (1984). 
{¶ 25} “A trial judge has broad discretion in determining whether a class 
action may be maintained and that determination will not be disturbed absent a 
showing of an abuse of discretion.”  Marks v. C.P. Chem. Co., 31 Ohio St.3d at 
201, 509 N.E.2d 1249.  “Abuse of discretion has been defined as more than an 
error of law or judgment; it implies an attitude on the part of the trial court that is 
unreasonable, arbitrary, or unconscionable.”  Id., citing Ojalvo, 12 Ohio St.3d at 
232, 466 N.E.2d 875.  “A finding of abuse of discretion, particularly if the trial 
court has refused to certify, should be made cautiously.”  Marks v. C.P. Chem. 
Co., at 201. 
B. Certification of a Class-Action Lawsuit Requires a Rigorous Analysis of 
Plaintiffs’ Claims to Ensure Compliance with Civ.R. 23 
{¶ 26} At the certification stage in a class-action lawsuit, courts must 
determine whether plaintiffs’ putative class complies with the requirements of 
Civ.R. 23.  UTO argues that Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 94 S.Ct. 
2140, 40 L.Ed.2d 732, has caused confusion as to whether courts can consider the 
underlying merits of the plaintiffs’ claim in a class-action suit. 
{¶ 27} Eisen involved a class-action lawsuit alleging violations of 
antitrust and securities laws with a putative class of six million members.  After 
certifying the class, the district court considered which party would more likely 
prevail on the merits, in order to determine who should bear the cost of notifying 
class members. 
SUPREME COURT OF OHIO 
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{¶ 28} On appeal, the United States Supreme Court held that the district 
court had erred in considering which party was likely to prevail on the merits for 
the purpose of deciding which party should bear the cost of notification in a class-
action lawsuit.  Id. at 177.  The court reasoned that there was “nothing in either 
the language or history of Rule 23 that gives a court any authority to conduct a 
preliminary inquiry into the merits of a suit in order to determine whether it may 
be maintained as a class action.”  Id.  The court further reasoned that an inquiry 
into the merits would give the plaintiff “a determination on the merits of the 
claims advanced on behalf of the class without any assurance that a class action 
may be maintained.”  Id. 
{¶ 29} In Wal-Mart v. Dukes, 131 S.Ct. 2541, 180 L.Ed.2d 374, the court 
stated that Eisen had sometimes been interpreted as prohibiting a court from 
conducting an inquiry into the merits of the case “in order to determine whether it 
may be maintained as a class action.”  Id. at 2552, fn. 6.  Dukes held that Eisen’s 
prohibition against considering the underlying merits in a class action was limited 
to its facts, i.e., it is improper for a court to consider which party will prevail on 
the merits for the purpose of deciding which party must bear the cost of 
notification in a class-action lawsuit.  Id. 
{¶ 30} Dukes held that “Rule 23 does not set forth a mere pleading 
standard.”  Id. at 2551.  Dukes reaffirmed that a trial court needs to conduct a 
rigorous analysis to ensure that the perquisites of Civ.R. 23 are satisfied.  Id., 
citing Gen. Tel. Co. of Southwest v. Falcon, 457 U.S. 147, 160-161, 102 S.Ct. 
2364, 72 L.Ed.2d 740 (1982).  The court went on to state: “A party seeking class 
certification must affirmatively demonstrate his compliance with the Rule—that 
is, he must be prepared to prove that there are in fact sufficiently numerous 
parties, common questions of law or fact, etc.”  (Emphasis sic.)  Dukes at 2551.  
The court elaborated: “Frequently that ‘rigorous analysis’ will entail some overlap 
with the merits of the plaintiff’s underlying claim. * * * ‘ “[T]he class 
January Term, 2013 
 
11
determination generally involves considerations that are enmeshed in the factual 
and legal issues comprising the plaintiff’s cause of action.” ’ ”  Id. at 2551-2552, 
quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 469, 98 S.Ct. 2454, 57 
L.Ed.2d 351 (1978). 
{¶ 31} In Dukes, past and present female employees alleged that Wal-
Mart discriminated against women by denying them promotions and pay equal to 
men’s.  The plaintiffs’ theory was that Wal-Mart’s “strong and uniform ‘corporate 
culture’ permits bias against women to infect * * * the discretionary 
decisionmaking of each one of Wal-Mart’s thousands of managers—thereby 
making every woman at the company the victim of one common discriminatory 
practice.”  (Emphasis added.)  Dukes, 131 S.Ct. at 2548, 180 L.Ed.2d 374.  In 
support of their claims, plaintiffs submitted statistical evidence about pay and 
promotion disparities between men and women, anecdotal reports of 
discrimination, and testimony from a sociologist, who analyzed Wal-Mart’s “ 
‘culture’ and personnel practices and concluded that the company was 
‘vulnerable’ to gender discrimination.”  Id. at 2549. 
{¶ 32} The court held that the commonality requirement in Fed.R.Civ.P. 
23(a)(2) was the crux of the case.  Id. at 2550-2551.  The court further held that 
raising common questions is not enough.  Rather, the requirement is to “ ‘generate 
common answers apt to drive the resolution of the litigation.’ ”  (Emphasis sic.)  
Id. at 2551, quoting Nagareda, Class Certification in the Age of Aggregate Proof, 
84 N.Y.U.L.Rev. 97, 132 (2009).  The court held that the commonality 
requirement of Fed.R.Civ.P. 23 overlapped with plaintiffs’ “contention that Wal-
Mart engages in a pattern or practice of discrimination.”  (Emphasis sic.)  Id. at 
2552.  The court recognized that in resolving a discrimination claim, the reason 
for the employment decision is critical.  Id.  The court in Dukes reasoned that 
because plaintiffs’ complaint involved thousands of employment decisions by 
Wal-Mart, plaintiffs would have to prove a common theory why Wal-Mart 
SUPREME COURT OF OHIO 
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discriminated against them.  The court stated: “ ‘[W]hether 0.5 percent or 95 
percent of the employment decisions at Wal-Mart might be determined by 
stereotyped thinking’ is the essential question on which [plaintiffs’] theory of 
commonality depends.”  Dukes at 2554, quoting a decision of the district court in 
the same case, 222 F.R.D. 189, 192 (N.D.Cal.2004).  The court found no 
“convincing proof of a companywide discriminatory pay and promotion policy, 
[and] concluded that [the plaintiffs] have not established the existence of any 
common question.”  (Emphasis added.)   Dukes at 2556-2557. 
{¶ 33} However, a trial court’s consideration of the underlying merits of a 
plaintiff’s claim at the certification stage is not unfettered.  “[T]he office of a Rule 
23(b)(3) certification ruling is not to adjudicate the case; rather, it is to select the 
‘metho[d]’ best suited to adjudication of the controversy ‘fairly and efficiently.’ ”  
Amgen v. Connecticut Retirement Plans & Trust Funds, 568 U.S. __, 133 S.Ct. 
1184, 1191, 185 L.Ed.2d 308 (2013).  Amgen confirmed that the rigorous analysis 
at the certification stage “may ‘entail some overlap with the merits of plaintiff’s 
underlying claim’ ” but stated: “Rule 23 grants courts no license to engage in free-
ranging merits inquiries at the certification stage.  Merits questions may be 
considered to the extent—but only to the extent—that they are relevant to 
determining whether the Rule 23 prerequisites for class certification are satisfied.”  
Id. at 1194-1195, quoting Dukes at 2551. 
{¶ 34} In Amgen, plaintiff alleged that it purchased Amgen stock based on 
misrepresentations and lost money when the misrepresentations were uncovered 
and the price of the stock fell.  The plaintiff, using the “fraud-on-the-market 
theory,” filed a section 10b-5 securities-fraud action.3  Amgen, 133 S.Ct. at 1190.  
                                                          
 
3 Securities and Exchange Commission Rule 10b-5, 17 C.F.R. 240.10b-5, provides that it is 
unlawful for a person to make material misrepresentations “[i]n connection with the purchase or 
sale of any security.”  See also Basic Inc. v. Levinson, 485 U.S. 224, 231, 108 S.Ct. 978, 99 
L.Ed.2d 194 (1988).  In order to recover damages under Rule 10b-5, the plaintiff must prove (1) a 
material misrepresentation or omission by the defendant, (2) scienter, (3) a connection between the 
January Term, 2013 
 
13
The claim required the plaintiff to prove that Amgen had made a materially 
misleading statement to the public regarding the sale of its stock.  Plaintiff sought 
to certify its complaint as a class-action lawsuit. 
{¶ 35} The question before the court was whether the predominance 
requirements in Civ.R. 23(B)(3) required plaintiff merely to plead that Amgen’s 
misrepresentations materially affected the price of Amgen’s stock, or whether 
plaintiff was required to prove the materiality requirement.  Id., 133 S.Ct. at 1195. 
{¶ 36} The court held that the “pivotal inquiry is whether proof of 
materiality is needed to ensure that questions of law or fact common to the class 
will ‘predominate over any questions affecting only individual members’ as the 
litigation progresses.”  (Emphasis sic.)  Id. at 1195. 
{¶ 37} The court found that the plaintiffs did not need to prove materiality 
at the certification stage for two reasons.  First, the court recognized that 
materiality is an objective question that can be answered by “ ‘the significance of 
an omitted or misrepresented fact to a reasonable investor.’ ”  Id. at 1195, quoting 
TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 445, 96 S.Ct. 2126, 48 
L.Ed.2d 757 (1976).  Thus, proof of materiality is common to all the class 
members.  Id. at 1196. 
{¶ 38} Second, the court determined: 
 
[T]here is no risk whatever that a failure of proof on the common 
question of materiality will result in individual questions 
predominating. Because materiality is an essential element of a 
10b-5 claim, * * * [plaintiff’s] failure to present sufficient 
                                                                                                                                                               
misrepresentation or omission and the purchase or sale of a security, (4) reliance upon the 
misrepresentation or omission, (5) economic loss, and (6) loss causation.  The “fraud-on-the-
market” theory permits certain Rule 10b–5 plaintiffs to invoke a rebuttable presumption of 
reliance on material misrepresentations made to the general public.  Amgen,133 S.Ct. at 1192, 185 
L.Ed.2d 308.  
 
SUPREME COURT OF OHIO 
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evidence of  materiality to defeat a summary judgment motion or 
to prevail at trial would not cause individual reliance questions to 
overwhelm the questions common to the class.  Instead, the failure 
of proof on the element of materiality would end the case for one 
and for all; no claim would remain in which individual reliance 
issues could potentially predominate. 
 
Amgen, 133 S.Ct. at 1196, 185 L.Ed.2d 308. 
{¶ 39} The court concluded:  
 
[Plaintiff was] not required to prove the materiality of Amgen’s 
alleged misrepresentations and omissions at the class-certification 
stage. This is not a case in which the asserted problem—i.e., that 
the plaintiff class cannot prove materiality—“exhibits some fatal 
dissimilarity” among class members that would make use of the 
class-action device inefficient or unfair. Nagareda, Class 
Certification in the Age of Aggregate Proof, 84 N.Y.U.L. Rev. 97, 
107 (2009). Instead, what Amgen alleges is “a fatal similarity—[an 
alleged] failure of proof as to an element of the plaintiffs’ cause of 
action.”  Ibid.  Such a contention is properly addressed at trial or in 
a ruling on a summary-judgment motion. The allegation should not 
be resolved in deciding whether to certify a proposed class.  
 
Id. at 1197. 
{¶ 40} To the extent that Eisen has caused confusion, Dukes and Amgen 
have clarified that at the class-certification stage, trial courts may probe the 
underlying merits of an action, but only for the purpose of determining whether 
January Term, 2013 
 
15
the plaintiff has satisfied the prerequisites of Fed.R.Civ.P. 23.  See also Comcast 
Corp. v. Behrend, ___ U.S. ___, 133 S.Ct. 1426, 185 L.Ed.2d 515 (2013). 
{¶ 41} Contrary to UTO’s assertion, our decision in Ojalvo, 12 Ohio St.3d 
230, 466 N.E.2d 875, is consistent with Dukes and Amgen. In Ojalvo, the plaintiff 
filed a class-action lawsuit in the Court of Claims alleging that he and several 
thousand other employees of the Ohio State University had not been fully 
compensated pursuant to their written contracts.  The Court of Claims denied 
certification for several reasons, including that there was “no certainty that a 
common issue of breach of three to six thousand contracts probably exists.”  
Ojalvo at 233.  The court of appeals affirmed. 
{¶ 42} In Ojalvo, we held that the Court of Claims had abused its 
discretion in denying certification of the class.  We held:  “[I]t appears that the 
Court of Claims was not reviewing the propriety of class certification but was 
attempting, contrary to the applicable law, to reach the merits of the claim.  Class 
action certification does not go to the merits of the action.”  (Emphasis sic.)  
Ojalvo, 12 Ohio St.3d at 233, 466 N.E.2d 875, citing Eisen, 417 U.S. at 177, 94 
S.Ct. 2140, 40 L.Ed.2d 732.  The court further commented: 
 
The [Court of Claims’] resolution of the narrow issue of 
commonality by the conclusion that the breach probably does not 
exist is unreasonable since no arguments were made, nor need 
have been made, with respect to the actual merits of the case 
beyond the necessity of establishing the validity of certification 
under Civ.R. 23.  See Eisen v. Carlisle & Jacquelin * * *. 
 
Id. at 233. 
{¶ 43} It is important to recognize precisely what Ojalvo held and what it 
did not hold.  Ojalvo held that the Court of Claims improperly decided the case on 
SUPREME COURT OF OHIO 
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the underlying merits, i.e., that there was no certainty that a breach probably 
existed.  Ojalvo did not hold that a court is prohibited from probing the merits of a 
plaintiff’s claims to determine whether class certification is proper under Civ.R. 
23.  In Ojalvo, we cited Eisen only for the proposition that a court cannot decide 
the case on the merits at the certification stage.  Id. at 233.  Ojalvo is consistent 
with Dukes and Amgen to the extent that a trial court may probe the underlying 
merits of the plaintiff’s claim in order to determine whether the prerequisites for 
class certification are satisfied under Civ.R. 23. 
{¶ 44} Accordingly, we hold that at the certification stage in a class-action 
lawsuit, a trial court must undertake a rigorous analysis, which may include 
probing the underlying merits of the plaintiff’s claim, but only for the purpose of 
determining whether the plaintiff has satisfied the prerequisites of Civ.R. 23. 
C. Stammco I and the Proceedings on Remand 
{¶ 45} In Stammco I, we held that the class as originally certified by the 
trial court was not readily identifiable for several reasons, including that the trial 
court would have to undertake individualized determinations to ascertain whether 
and how each prospective class member had authorized third-party charges on his 
or her bill and that doing so would require “more than a reasonable effort.”  125 
Ohio St.3d 91, 2010-Ohio-1042, 926 N.E.2d 292, at ¶ 11.  We reversed the 
judgment of the court of appeals and remanded the cause to the trial court. 
{¶ 46} On remand, plaintiffs submitted an amended class definition.  At a 
hearing, the parties presented arguments for and against certification.  An 
important issue addressed by both parties was the need for individualized 
determinations to ascertain which third-party-provider charges were authorized 
and which were not authorized. 
{¶ 47} With regard to the issue of individualized determinations of claims, 
plaintiffs’ counsel argued: “It’s simple.  Despite—despite protestations of [UTO], 
we can do what they suggest on page eight of their Brief. ‘Create a new 
January Term, 2013 
 
17
specialized computer program.’  We can do that.  You’ve got the tapes, we got the 
technology.” 
{¶ 48} In opposition, UTO asserted that there was no computer that could 
identify which charges were authorized and which were not authorized.  UTO 
argued that the amended class did not address the problems identified by this 
court in Stammco I.  UTO asserted that resolving which charges were authorized 
was an issue that would require individualized determinations and individual 
testimony.  UTO claimed that case law holds that cramming cases are not suitable 
for class-action lawsuits for just this reason.  UTO argued that the need for 
individualized determinations means that this case is not suitable for a class-
action lawsuit, because the class cannot be identified without more than a 
reasonable effort and because common issues do not predominate. 
{¶ 49} The trial court rejected plaintiffs’ amended class definition, finding 
that (1) the proposed class was a fail-safe class, (2) the real culprits were the third-
party service providers, and (3) UTO had no duty to ensure that charges by the 
third-party service providers were authorized. 
{¶ 50} The court of appeals reversed the trial court’s order, holding that 
the trial court had abused its discretion because (1) the proposed amended class 
clarified the ambiguities identified by this court in Stammco I, (2) the amended 
class was not a fail-safe class, and (3) the determination that UTO was not liable 
was an impermissible decision based on the merits. 
{¶ 51} The trial court did err in basing its rejection of plaintiffs’ amended 
class definition on the determination that they would ultimately lose on the merits.  
Nevertheless, based on the proposed amended class definition, the evidence in 
this case, the certification requirements of Civ.R. 23, and the applicable case law 
on cramming, we hold that the trial court’s order rejecting the amended class 
definition was correct.  We have consistently held that a reviewing court should 
SUPREME COURT OF OHIO 
18 
 
not reverse a correct judgment merely because it is based on erroneous reasons.  
E.g., Joyce v. Gen. Motors Corp., 49 Ohio St.3d 93, 96, 551 N.E.2d 172 (1990).   
{¶ 52} In Stammco I, we made clear that the need for individualized 
determinations to sort out which third-party-provider charges were authorized was 
an issue to be considered on remand.  Stammco I, 125 Ohio St.3d 91, 2010-Ohio-
1042, 926 N.E.2d 292, ¶ 13.  On this second appeal, we now recognize that the 
need for individualized determinations is dispositive in concluding that the class 
does not comport with Civ.R. 23.  Remanding this case for further consideration 
of the class action merely to reach an inevitable result would result in additional, 
unnecessary delay in a case that is more than eight years old.  Instead, we exercise 
our discretionary authority to decide the class-certification question.  See Apel v. 
Katz, 83 Ohio St.3d 11, 697 N.E.2d 600 (1998) (rather than remand issues to be 
resolved by the lower courts, we chose to decide the issues in this court based on 
the briefs filed therein). 
D. Plaintiffs’ Proposed Amended Class Does Not Satisfy Civ.R. 23 
1. The Proposed Amended Class Is Overly Broad 
{¶ 53} “If * * * a class is defined so broadly as to include a great number 
of members who for some reason could not have been harmed by the defendant’s 
allegedly unlawful conduct, the class is defined too broadly to permit 
certification.”  Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 824 
(C.A.7, 2012). 
{¶ 54} The original proposed class included those “who were billed for 
charges on their local telephone bills by Sprint on behalf of third parties without 
their permission.”  As we held in Stammco I, the class as originally certified was 
not readily identifiable without expending more than a reasonable effort, because 
the trial court would have to determine individually whether and how each 
prospective class member had authorized third-party charges on his or her phone 
bill. 
January Term, 2013 
 
19
{¶ 55} In response, the plaintiffs proposed the following amended class 
definition:  “All individuals, businesses or other entities * * * who were billed for 
third party charges as to which [UTO] had no prior authorization from the 
customer in writing or by a method acceptable to [UTO] sufficient for [UTO] to 
verify that the customer had agreed to such charge.” 
{¶ 56} The proposed amended class seemingly cures the problem that the 
class was not readily identifiable.  However, upon further review, the proposed 
amended class is too broad.  UTO has no records regarding which charges are 
authorized and which are not.  Under the proposed amended class, every person 
who was billed a third-party charge for which UTO had no prior authorization is 
now a class member even if the third-party charge was proper.  Therefore, the 
proposed amended class is overbroad and is not a proper class. 
2. Issues Common to Class Members Do Not Predominate 
 
[I]n determining whether common questions of law or fact 
predominate over individual issues, it is not sufficient that common 
questions merely exist; rather, the common questions must 
represent a significant aspect of the case and they must be able to 
be resolved for all members of the class in a single adjudication. 
 
(Emphasis added.)  Schmidt v. Avco Corp., 15 Ohio St.3d at 313, 473 N.E.2d 822. 
{¶ 57} In other class-action lawsuits that have alleged cramming, courts 
have held that the evidence necessary to determine whether third-party-service-
provider charges are authorized requires individualized determinations, which 
cause the class to fail the predominance requirement of Civ.R. 23(B)(3).  Brown 
v. SBC Communications, Inc., S.D.Ill. No. 05-cv-777-JPG, 2009 WL 260770, *3 
(Feb. 4, 2009) (“the Court will need to make individual determinations as to 
whether each proposed class member authorized the charges for which he was 
SUPREME COURT OF OHIO 
20 
 
billed by defendants. The result will be multiple mini-trials, each requiring 
individual proofs”); Lady Di’s, Inc. v. Enhanced Servs. Billing, Inc., 654 F.3d 
728, 738 (7th Cir.2011) (customers’ individual transactions would need to be 
examined to consider whether the claims for unjust enrichment or the statutory 
claim for deception were proven, which does not comply with Fed.R.Civ.P. 
23(b)(3)); Midland Pizza, L.L.C. v. Southwestern Bell Tel. Co., 277 F.R.D. 637, 
641-642 (D.Kan.2011) (“the injury at issue here is individualized: whether each 
class member was billed for, and paid for, unauthorized charges on his or her 
telephone bill.  And if the charges were authorized, individual questions of fact 
exist as to whether that authorization was valid.  Common questions of law or fact 
do not predominate over questions affecting only individual members.  Defendant 
is correct that no common proof is possible to demonstrate injury for all class 
members, because to determine whether or not a charge was authorized will 
require individualized proof”); Stern v. Cingular Wireless Corp., C.D.Cal. No. 
CV 05-8842 CAS, 2009 WL 481657, *8 (Feb. 23, 2009) (“one cannot determine 
what services were crammed without taking the deposition of each class member 
to determine what services he or she authorized”). 
{¶ 58} While these cases are distinguishable in some respects from the 
instant case, they are persuasive to the extent that determining whether third-
party-provider claims are authorized requires individualized determinations as to 
each member of the class that make certification of a class inappropriate under 
Civ.R. 23(B)(3) because common issues do not predominate.  Unlike failure to 
prove materiality at the certification stage in Amgen, failure to offer evidence in a 
cramming case that is sufficient to prove that third-party charges are unauthorized 
on a classwide basis will cause individual questions to overwhelm the questions 
common to class members. 
{¶ 59} UTO contracts with third-party service providers to deliver charges 
from the third-party service providers to the end users via UTO’s phone bill.  
January Term, 2013 
 
21
UTO admits that its customers dispute some of the third-party-service-provider 
charges but also asserts that many of these charges arise from services that are 
knowingly ordered by UTO’s customers, and that these charges are never 
disputed.  UTO asserts that if a customer disputes third-party-service-provider 
charges, it will credit the customer’s bill for the purpose of maintaining good will. 
{¶ 60} However, UTO does not routinely receive, have, or maintain any 
records of the end users’ requests for or authorization or receipt of any specific 
third-party services.  The third-party providers have that information, and UTO 
merely delivers the third-party service provider’s bill to the end user.  UTO 
asserts that if it had to investigate questions of complaints about the third-party 
charges, it would have to contact the clearinghouse or third-party service provider 
to obtain the relevant information to resolve the dispute.  UTO does not possess 
the information necessary to determine whether third-party charges are authorized 
by end users. 
{¶ 61} Nevertheless, at oral argument, plaintiffs maintained that the trial 
court can devise a formula that will indicate which third parties are responsible 
for unauthorized charges.  Plaintiffs submit that a database maintained by UTO 
can be used to determine which third-party charges are authorized and which are 
not.  The database reflects adjustments that UTO made for its customers each 
month.  Plaintiffs claim that the number of adjustments made each month can 
identify unauthorized charges from third-party providers.  Plaintiffs argue that a 
threshold could be established that would indicate when a third party was 
charging an unauthorized charge.  Plaintiffs suggest a 4 percent complaint level, 
but they suggest that the court would set the proper threshold complaint level. 
{¶ 62} A summary of the database in the record has seven columns, and 
each column appears to contain numerical data for a 42-month period.  Three of 
the columns have the following headings: “Carrier Issued Adjustments,” 
“Defendant Issued Adjustments,” and “Total Adjustments.”  The database does 
SUPREME COURT OF OHIO 
22 
 
not identify why the adjustments were made.  UTO asserts that adjustments are 
made for any number of reasons, including to correct mistakes or clerical errors. 
{¶ 63} In sum, we hold that the database provides no probative evidence 
that would assist in identifying unauthorized charges from third-party providers 
that appear on the phone bills from UTO each month. 
{¶ 64} The class representative’s case illustrates why individualized 
determinations would predominate if this case were certified as a class action.  
Plaintiff Kent Stamm, owner of the Pop Shop, disputed a third-party charge for a 
service from Bizopia that was billed to him on his UTO phone bill.  He called 
Bizopia to dispute the charge.  Bizopia refused to reverse the charge, claiming 
that it was authorized by Frank Smith, who was an employee of the Pop Shop.  
Bizopia claimed to have a voice recording of Smith’s authorization for the 
service, and it faxed a purported confirmation of the charge to Stamm.  Stamm 
sent several e-mails to Bizopia complaining about the charges.  Stamm requested 
that Bizopia provide him a copy of the voice authorization from the third-party 
charge from Stamm’s employee Frank Smith.  Bizopia refused to provide a 
recording, but offered to play the audio verification over the phone.  Bizopia 
canceled Stamm’s account with Bizopia, but indicated that the charges would 
remain.  Stamm’s situation is illustrative of the need for individualized 
determinations to ascertain whether third-party charges to UTO customers were 
authorized that make this case inappropriate for resolution though a class-action 
complaint. 
{¶ 65} Unauthorized third-party charges are better resolved on an 
individual basis with the third party or UTO.  UTO’s phone bills identify third-
party charges, the entity responsible for the charge, and a toll-free number for 
billing inquiries.  Moreover, UTO claims that it has a policy of removing third-
party charges for the purpose of maintaining good will with its clients.  Finally, 
January Term, 2013 
 
23
for larger charges or where the charge cannot be resolved over the phone, small-
claims court is also an option. 
{¶ 66} Accordingly, because ascertaining whether third-party charges are 
authorized will require individualized determinations, common issues do not 
predominate. 
IV. Conclusion 
{¶ 67} Plaintiffs’ amended class definition is overbroad and fails to satisfy 
the predominance requirement of Civ.R. 23(B)(3).  Accordingly, we reverse the 
judgment of the court of appeals and reinstate the order of the trial court that 
overruled plaintiffs’ motion to amend the class, which in effect decertifies the 
plaintiffs’ class action.  We remand the cause to the trial court for proceedings not 
precluded by the denial of class certification. 
Judgment reversed,  
class decertified, 
and cause remanded. 
O’CONNOR, C.J., and O’DONNELL, LANZINGER, and FRENCH, JJ., concur. 
PFEIFER and O’NEILL, JJ., dissent. 
____________________ 
PFEIFER, J., dissenting. 
{¶ 68} I dissent and would affirm the decision of the court of appeals.  I 
also dissented in Stammco, L.L.C. v. United Tel. Co. of Ohio, 125 Ohio St.3d 91, 
2010-Ohio-1042, 926 N.E.2d 292; the majority in that case remanded the case to 
the trial court to redefine the class.  That was, it turns out, a fool’s errand.  The 
majority decides today that the class is not capable of definition. 
{¶ 69} That “inevitable result,” majority opinion at ¶ 52, allows the 
majority to ignore the fact that this court, after having originally denied 
jurisdiction in this matter, reconsidered that decision and allowed jurisdiction on 
SUPREME COURT OF OHIO 
24 
 
just one of the appellants’ propositions of law.  132 Ohio St.3d 1425, 2012-Ohio-
2729, 969 N.E.2d 272.  That proposition of law reads: 
 
Wal-Mart v. Dukes rejects Ojalvo’s interpretation of Eisen: 
A trial court does not abuse its discretion by evaluating the merits 
of the plaintiffs' claims when denying class certification. 
 
The majority ultimately agreed with the appellate court that the trial court had 
“err[ed] in basing its rejection of plaintiffs’ amended class definition on the 
determination that they would ultimately lose on the merits.” Majority opinion, 
¶ 51.  That should have ended this appeal. 
{¶ 70} But the majority cites Apel v. Katz, 83 Ohio St.3d 11, 16, 697 
N.E.2d 600 (1998), in holding that this court has “discretionary authority to 
decide the class-certification question.” Majority opinion at ¶ 52.  The majority 
characterizes Apel as involving a situation where, “rather than remand issues to be 
resolved by the lower courts, we chose to decide the issues in this court based on 
the briefs filed therein.”  Id.  Apel concerned a dispute between neighbors over a 
roadway easement, and the dispute had dragged through the courts for nine years.  
Both parties in Apel argued that the court of appeals had erred by failing to 
address issues that had not been made moot by the issue the court did decide.  So 
this court decided those issues. 
{¶ 71} This case is not about an error by the court of appeals in 
determining whether issues were moot.  And here, this court itself limited the 
issues it was willing to consider.  But ultimately, as in the two times it has 
reconsidered its decision to deny jurisdiction to the appellant in this case, this 
court changed its mind. 
{¶ 72} This court’s decision today fits with the recent jurisprudence of the 
United States Supreme Court, “a Court bent on diminishing the usefulness of Rule 
January Term, 2013 
 
25
23.” Am. Express. Co. v. Italian Colors Restaurant, ___ U.S. ___, 133 S.Ct. 2304, 
2320, ___ L.Ed.2d ___ (2013) (Kagan, J., dissenting).  As a practical matter, Ohio 
citizens who suffer small, individual damages as a result of a business’s serial bad 
conduct are without a meaningful remedy unless they can convince the Ohio 
attorney general to get interested in their cases.  This court is well on its way to 
consigning class actions in Ohio to the dustbin of legal history, joining workplace 
intentional torts.  What is the next step in diminishing the role of courts? 
 
O’NEILL, J., concurs in the foregoing opinion. 
____________________ 
 
Murray & Murray Co., L.P.A., Dennis E. Murray Sr., and Donna J. Evans, 
for appellees.  
 
Baker & Hostetler, L.L.P., Michael K. Ferrell, John B. Lewis, and Karl 
Fanter, for appellants. 
 
Linda S. Woggon, urging reversal for amicus curiae Ohio Chamber of 
Commerce. 
________________________