Pund et al v. City of Bedford, Ohio et al
Filing
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Memorandum of Opinion and Order granting plaintiffs' Motion for class certification (Related Doc # 27 ). Because the City has modified its Rental Inspection ordinance (Related Doc # 31 ), the Court denies the Plaintiffs' Oral Motion for Temporary Restraining Order as moot. Judge Benita Y. Pearson 7/28/2017(C,KA)
PEARSON, J.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
KENNETH PUND, et al.,
Plaintiffs,
v.
CITY OF BEDFORD, OHIO, et al.,
Defendants.
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CASE NO. 1:16CV1076
JUDGE BENITA Y. PEARSON
MEMORANDUM OF OPINION AND
ORDER [Resolving ECF No. 27]
Pending before the Court is Plaintiffs’ Motion for Class Certification. ECF No. 27.
Defendants responded (ECF No. 28) and Plaintiffs replied (ECF No. 33). Also pending is
Plaintiffs’ Oral Motion for Temporary Restraining Order, made at the February 17, 2017
Telephonic Status Conference. For the following reasons, the Court denies Plaintiffs’ Oral
Motion for Temporary Restraining Order as moot and grants Plaintiffs’ Motion for Class
Certification.
I. Background
Plaintiffs, citizens of the City of Bedford, Ohio, brought suit against the City of Bedford
and various city officials challenging the city’s practice of imposing Point of Sale Inspection
fees. ECF No. 1. Plaintiffs filed Motions for Preliminary Injunction and Temporary Restraining
Order, asking the Court to enjoin Defendants’ Point of Sale inspection requirements. ECF No. 4.
The Court set a hearing for May 13, 2016, but, prior to the hearing, parties filed a Joint Motion
for an Order Granting Preliminary Injunction. ECF No. 10. The Court granted the Motion and
cancelled the hearing. ECF No. 11. The Court preliminarily enjoined Defendants from
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enforcing warrantless Point of Sale searches and from indirectly enforcing the warrantless Point
of Sale searches requirement by criminally prosecuting Plaintiffs, stripping them of the right to
occupy or rent their property, or otherwise. Id. at PageID #: 74. The City indicated in its
Opposition to the Motion for Permanent Injunction that it had amended its Point of Sale
Inspection regulations. ECF No. 17.
Plaintiffs then moved for leave to amend their Complaint, which the Court granted. ECF
No. 23. The Amended Complaint added a claim for class-wide relief, as well as claims related to
Defendants’ Rental Inspection fees. Plaintiffs argued that Defendants’ Rental Inspection
mandates were materially identical to the City’s enjoined Point of Sale Inspection requirements.
ECF No. 22 at PageID #: 208–09. Nonetheless, Defendants continued to enforce the Rental
Inspections, and maintained that the injunction applies only to the Point of Sale inspections. Id.
at PageID #: 209. Plaintiffs also moved for a temporary restraining order. ECF No. 22. The
Court held a hearing, at which Defendants agreed to amend the City’s rental inspection
ordinance. On March 10, 2017, Defendants confirmed that the ordinance has been amended, and
the rental application and City’s website were updated accordingly. ECF No. 31. Plaintiffs now
move for class certification. ECF No. 27.
II. Standard of Review
The principal purpose of class actions is to achieve efficiency and economy of litigation,
with respect to both the parties and the courts. See Gen. Tel. Co. v. Falcon, 457 U.S. 147, 159
(1982). Before certifying a class, the district court must conduct a “rigorous analysis” of the
prerequisites of Federal Rule of Civil Procedure 23. Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct.
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2541, 2551 (2011). A district court has broad discretion in deciding whether to certify a class,
although it must exercise that discretion within the framework of Rule 23. Beattie v. CenturyTel,
Inc., 511 F.3d 554, 559–60 (6th Cir. 2007); In re American Medical Systems, Inc., 75 F.3d 1069,
1079 (6th Cir. 1996).
“Rule 23 does not require a district court, in deciding whether to certify a class, to inquire
into the merits of the plaintiff’s suit.” Beattie, 511 F.3d at 560. But in evaluating whether class
certification is appropriate, “it may be necessary for the court to probe behind the pleadings,”
because the relevant issues are often “enmeshed” within the legal and factual considerations
raised by the litigation. Falcon, 457 U.S. at 160. The party seeking class certification bears the
burden of establishing that the requisites are met. Alkire v. Irving, 330 F.3d 802, 820 (6th Cir.
2003).
III. Discussion
In order to certify a class, a court must identify the purported class and determine that the
named plaintiffs are members of the class; establish that the requirements of Fed. R. Civ. P.
23(a) have been met; and determine that the case may be certified pursuant to at least one of the
subcategories of Fed. R. Civ. P. 23(b). Each requirement is addressed in turn.
A. Class Definition
In reviewing a motion for class certification, a court must first identify the purported
“class” and determine that the named plaintiffs are members of the class. The class definition
must specify “a particular group at a particular time frame and location who were harmed in a
particular way” and define the class so that its membership can be objectively ascertained.
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Edwards v. McCormick, 196 F.R.D. 487, 491 (S.D. Ohio 2000). “[T]he class definition must be
sufficiently definite so that it is administratively feasible for the court to determine whether a
particular individual is a member of the proposed class.” Young v. Nationwide Mut. Ins. Co.,
693 F.3d 532, 537 (6th Cir. 2012) (quoting 5 James W. Moore et al., Moore’s Federal Practice §
23.21[1] (Matthew Bender 3d ed. 1997)) (internal quotation marks omitted).
Plaintiffs seek to certify a class, consisting of two subclasses, defined as:
Subclass A: All individuals and businesses that have (1) been subjected to Point of
Sale Inspections since September 10, 2014; and (2) paid Points of Sale Inspection
fees to the City of Bedford in conjunction with the aforesaid inspection(s).
Subclass B: All individuals and businesses that have (1) been subjected to rental
inspections since September 10, 2014; and (2) paid Rental Inspection fees to the City
of Bedford in conjunction with the aforesaid inspection(s).
ECF No. 27 at PageID #: 265.
Defendants counter that these proposed subclasses are overly broad in two ways. ECF
No. 28 at PageID #: 296–98. First, Defendants argue that the subclasses should not includes
dates after the date Defendants amended their point of sale and rental inspection ordinances. In
regards to Subclass A, Defendants argue that because Bedford amended its point of sale
ordinance to include a warrant requirement, any point of sale inspection that has occurred since
January 30, 2017 (the date of the Court’s order holding that Plaintiffs’ Motion for a Permanent
Injunction was moot) has been in compliance with the Fourth and Fourteenth Amendment. Id. at
PageID #: 296. As to Subclass B, Defendants argue that because Bedford amended its rental
inspection ordinance to include a warrant requirement on October 3, 2016, any individual or
business that has been subject to a rental inspection since October 3, 2016 should not be included
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in the certification of Subclass B. Plaintiffs do not oppose this change in principle, but argue
that, with respect to rental inspections, coerced inspections continued through February 14,
2017, the date of the Court’s hearing on Plaintiffs’ Motion for Temporary Restraining Order.
ECF No. 33 at PageID #: 335. Finding Defendant’s argument concerning point of sale
inspections well taken, the Court adopts the January 30, 2017 cutoff. Regarding rental
inspections, because there were still questions as to whether the City had properly amended its
ordinance, changed the rental application form, and updated its website when the Court
conducted the February 14, 2017 Hearing, the Court adopts the February 14, 2017 cutoff.
Second, as to Subclass B, Defendants argue that because claims brought under 42 U.S.C.
§ 1983 are subject to a two-year statute of limitations, Subclass B should not be certified to
include any plaintiffs earlier than January 30, 2015. ECF No. 28 at PageID #: 296 (citing Banks
v. City of Whitehall, 344 F.3d 550, 553 (6th Cir. 2003)). Defendants misstate the law on statute
of limitations. Although Plaintiffs’ Amended Complaint was filed on January 30, 2017, the
relevant state for statute of limitations purposes is the date the motion for leave is made. Ne.
Ohio Coal. for the Homeless v. Husted, No. 2:06CV896, 2016 WL 8223066, at *2–3 (S.D. Ohio
Mar. 17, 2016) (citing Moore v. State of Indiana, 999 F.2d 1125, 1131 (7th Cir. 1993) (“As a
party has no control over when a court renders its decision regarding the proposed amended
complaint, the submission of a motion for leave to amend, properly accompanied by the
proposed amended complaint that provides notice of the substance of those amendments, tolls
the statute of limitations, even though technically the amended complaint will not be filed until
the court rules on the motion.”)); United States v. Katz, 494 F. Supp. 2d 641, 644 (S.D. Ohio
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2006) (“Courts have held that the filing of a motion for leave to amend tolls the running of the
statute of limitations.”). Because Plaintiffs filed their motion for leave on September 8, 2016,
the September 10, 2014 start date for Subclass B is within the statute of limitations.
Accordingly, the Court identifies the following subclasses:
Subclass A: All individuals and businesses that have (1) been subjected to Point of
Sale Inspections between September 10, 2014 and January 30, 2017; and (2) paid
Points of Sale Inspection fees to the City of Bedford in conjunction with the
aforesaid inspection(s).
Subclass B: All individuals and businesses that have (1) been subjected to rental
inspections between September 10, 2014 and February 14, 2017; and (2) paid Rental
Inspection fees to the City of Bedford in conjunction with the aforesaid inspection(s).
This class definition provides objective criteria to permit the Court to ascertain whether an
individual is member of proposed Class. The proposed Class also would not constitute a
“fail-safe class,” or one that is not defined until case is decided on merits. See Randleman v.
Fidelity Nat’l Title Ins. Co., 646 F.3d 347, 352 (6th Cir. 2011) (“Either the class members win
or, by virtue of losing, they are not in the class and, therefore, not bound by the judgment.”).
B. Rule 23(a) Prerequisites
After a class has been identified, plaintiffs must establish that the requirements of Federal
Rule of Civil Procedure 23(a) are met. Rule 23(a) lists four requirements for the certification of
a class:
One or more members of a class may sue or be sued as representative parties on
behalf of all only if (1) the class is so numerous that joinder of all members is
impracticable, (2) there are questions of law or fact common to the class, (3) the
claims or defenses of the representative parties are typical of the claims or defenses
of the class, and (4) the representative parties will fairly and adequately protect the
interests of the class.
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Fed. R. Civ. P. 23(a). Each of these prerequisites is discussed in turn.
i. Numerosity
Rule 23(a)(1) requires that the class be “so numerous that joinder of all members is
impracticable.” The Sixth Circuit has stated that, although “there is no strict numerical test,
‘substantial’ numbers usually satisfy the numerosity requirement.” Daffin v. Ford Motor Co.,
458 F.3d 549, 552 (6th Cir. 2006). According to Newberg’s often-cited treatise, “a class of 40 or
more members raises a presumption of impracticability of joinder based on numbers alone.” 1
William B. Rubenstein, Alba Conte and Herbert B. Newberg, Newberg on Class Actions § 3:12
(5th ed. 2017).
Plaintiffs highlight figures provided by City of Bedford official Peggy Zelasko, in
response to a March 2, 2016 public records request by Plaintiffs’ counsel. ECF No. 27 at
PageID #: 270 (citing ECF No. 21 at PageID #: 205 (titled “EXHIBIT H - Revenue Derived
From Point of Sale Inspection and Rental Inspection Fees”)); ECF No. 33 at PageID #: 318.
These figures demonstrate that each year, hundreds of rental and point of sale inspections are
performed. ECF No. 21 at PageID #: 205. For example, in 2014, 535 rental inspections were
performed, and 275 point of sale inspections were performed. Id. In 2015, 483 rental
inspections were performed, and 284 point of sale inspections were performed. Id. Plaintiffs do
not provide statistics for 2016 inspections.
Defendants challenge Plaintiffs’ numerosity argument, contending the Plaintiffs’
subclasses include individuals and businesses outside the scope of the class action, as described
above This argument is not sufficient to challenge the numerosity of the class members. Even if
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just a fraction of the hundreds of rental and point of sale inspectees from one year were to join,
the class would likely meet the 40-person rule of thumb, making joinder impracticable.
Moreover, the nature of the claims makes joinder impracticable, as the cost of litigating these
constitutional claims would likely outweigh the monetary injuries suffered. Putnam v. Davies,
169 F.R.D. 89, 93 (S. D. Ohio 1996) (citing Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 158–61
(1974)) (noting that litigating constitutional challenges is costly, and that class members
suffering “the cost of a rental car for a few days” would be unlikely to bring suit). With
inspection fees as low as $50 per inspection, “the financial disincentives to initiating a lawsuit
such as this one create a significant hardship for prospective plaintiffs and warrant the
conclusion that the questioned statutes would go unchallenged were a class not certified.”
Putnam, 169 F.R.D. at 93 (quoting Kutschbach v. Davies, 885 F. Supp. 1079, 10854 (S. D. Ohio
1995)).
Given the large number of potential class members, as well as the nature of the claims,
the Court finds that Plaintiffs have satisfied the numerosity requirement.
ii. Commonality
Rule 23(a)(2) requires that there be “questions of law or fact common to the class.” The
Sixth Circuit has characterized the commonality requirement as “qualitative rather than
quantitative” and has observed that “[v]ariations in the circumstances of class members are
acceptable, as long as they have at least one issue in common.” In re Am. Med. Sys., Inc., 75
F.3d 1069, 1080 (6th Cir. 1996). The resolution of the common issue must “advance the
litigation.” Sprague v. Gen. Motors Corp., 133 F.3d 388, 397 (6th Cir. 1998). Commonality is
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satisfied when the claims “depend on a common contention . . . of such a nature that it is capable
of classwide resolution—which means that determination of its truth or falsity will resolve an
issue that is central to the validity of each one of the claims in one stroke.” Young, 693 F.3d at
542 (quoting Dukes, 131 S. Ct. at 2551).
Defendants contest the commonality of the potential class, arguing that because the City
has amended the ordinance, class certification should not include individuals or businesses
whose commonality is based upon claims seeking to enjoin warrantless searches. ECF No. 28 at
PageID #: 297–98. This argument is not a barrier to finding commonality, however, as the class
members share common questions of law and fact: all class members claim that they are entitled
to receive restitution of illegally collected funds. Because even one common issue of law or fact
can satisfy commonality, In re Whirlpool Corp. Front-Loading Washer Prods. Liability
Litigation, 722 F.3d 838, 853 (6th Cir. 2013), the Court finds this prong satisfied.
iii. Typicality
Rule 23(a)(3) requires that “the claims or defenses of the representative parties are
typical of the claims or defenses of the class.” Typicality “tends to merge” with commonality
because both “serve as guideposts for determining whether under the particular circumstances
maintenance of a class action is economical and whether the plaintiff’s claim and the class
claims are so interrelated that the interests of the class members will be fairly and adequately
protected in their absence.” Young, 693 F.3d at 542 (quoting Dukes, 131 S. Ct. at 2551 n.5).
Typicality will be found when the representative has aligned interests with the class members,
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and pursuing the personal claims will also advance the class members’ interests. In re Am. Med.
Sys., 75 F.3d at 1082.
The Class representatives’ claims are typical of the claims of the proposed Class.
Defendants’ conduct affects the Class representatives in the same manner as it does other Class
members—the Class representatives seek declaratory relief and the return of Point of Sale and
Rental Inspection fees illegally paid to Defendant. The representative parties’ claims, therefore,
are typical of the claims of the proposed Class. Daffin, 458 F.3d at 552.
iv. Representative Parties
Rule 23(a)(4) requires that “the representative parties will fairly and adequately protect
the interests of the class.” The class representative must be part of the class, and “possess the
same interest and suffer the same injury as the class.” Young, 693 F.3d at 543 (citing Amchem
Prod. Inc. v. Windsor, 521 U.S. 591, 625–26 (1997)). The Sixth Circuit considers two criteria
for determining adequacy of representation: (1) the representatives have common interests with
the unnamed members of the class, and (2) the representatives will vigorously prosecute the
interests of the class through qualified counsel. Beattie, 511 F.3d at 563. The first requirement
serves to uncover conflicts of interest between representative and the class. Young, 693 F.3d at
543. The second inquires into the competence of counsel. In re Am. Med. Sys., 75 F.3d at 1083.
Both of these criteria are met. For the reasons as discussed above, Plaintiffs have
common interests as the unnamed members of the Class. Moreover, Plaintiffs have prosecuted
this case vigorously thus far, having brought two Motions for Temporary Restraining Orders,
and having succeeded in persuading Defendants to modify their ordinances. Similarly,
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Plaintiffs’ counsel, the 1851 Center for Constitutional Law, is also competent to represent the
class, and Defendants do not challenge Plaintiffs’ representation. The Center is a public charity
and public interest law firm focused on representing Ohioans in constitutional challenges, and
has experience representing large classes in such cases. ECF No. 27 at PageID #: 274.
For these reasons, the Court finds that the representative parties will fairly and
adequately protect the interests of the class.
v. Summary
For the foregoing reasons, the Court finds that Plaintiffs have shown numerosity,
typicality, commonality, and adequacy, and, therefore, have satisfied Rule 23(a).
C. Rule 23(b) Prerequisites
In addition to meeting the requirements of Rule 23(a), Plaintiffs must also demonstrate
that the case may be certified pursuant to at least one of the subcategories of Rule 23(b). Rule
23(b) provides, in pertinent part, that:
A class action may be maintained if Rule 23(a) is satisfied and if:,
(1) prosecuting separate actions by or against individual class members would
create a risk of:,
(A) inconsistent or varying adjudications with respect to individual class
members that would establish incompatible standards of conduct for the
party opposing the class, or,
(B) adjudications with respect to individual class members that, as a
practical matter, would be dispositive of the interests of the other members
not parties to the individual adjudications or would substantially impair or
impede their ability to protect their interests,
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(2) the party opposing the class has acted or refused to act on grounds that apply
generally to the class, so that final injunctive relief or corresponding declaratory
relief is appropriate respecting the class as a whole. . . . ,
(3) the court finds that the questions of law or fact common to class members
predominate over any questions affecting only individual members, and that a
class action is superior to other available methods for fairly and efficiently
adjudicating the controversy. The matters pertinent to these findings include:
(A) the class members’ interests in individually controlling the
prosecution or defense of separate actions; (B) the extent and nature of
any litigation concerning the controversy already begun by or against class
members; (C) the desirability or undesirability of concentrating the
litigation of the claims in the particular forum; and (D) the likely
difficulties in managing a class action.
Fed. R. Civ. P. 23(b). Plaintiffs contend that the case may be certified pursuant to Rule
23(b)(1), (b)(2), and (b)(3).
i. Rule 23(b)(1)
“Rule 23(b)(1) authorizes mandatory class actions, meaning that potential class members
do not have an automatic right to notice or opt out of the class.” Cates v. Cooper Tire & Rubber
Co., 253 F.R.D. 422, 431 (N.D. Ohio 2008) (citing Reeb v. Ohio Dep’t of Rehab. & Corr., 435
F.3d 639, 645 (6th Cir. 2006)). Rule 23(b)(1) is written in the disjunctive, meaning that
Plaintiffs need to show either inconsistent adjudications will result in incompatible standards for
conduct, or that adjudication of the individual claims would substantially impair the ability of
potential class members to protect their interests.
In this case, Plaintiffs have shown that the case may be certified pursuant to Fed. R. Civ.
P. 23(b)(1)(A). If the instant case is not certified for class action, Defendants could face
hundreds of separate lawsuits, which could result in inconsistent rulings on the constitutionality
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of the searches. For these reasons, the Court finds that the Plaintiffs meet the requirements of
class certification under Rule 23(b)(1)(A).
ii. Rule 23(b)(2)
In the alternative, the Court certifies the class pursuant to Rule 23(b)(2). “Rule 23(b)(2)
also authorizes mandatory class actions.” Cates, 253 F.R.D. at 431 (citing Reeb, 435 F.3d at
645). This subsection “does not extend to cases in which the appropriate final relief relates
exclusively or predominantly to money damages.” Coleman v. Gen. Motors Acceptance Corp.,
296 F.3d 443, 446 (6th Cir. 2002) (quoting the Advisory Committee Notes 1966, Note on
Subdivision (b)(2)).
Defendants argue that because the City has revised its ordinances and stopped the
unconstitutional behavior, and the appropriate final relief in this case is predominately money
damages, class certification pursuant to Rule 23(b)(2) is not appropriate. Plaintiffs’ claims for
declaratory relief—a prerequisite to an order that restitution be paid—are not moot. Therefore,
because the proposed Class as a whole would benefit from declaratory or injunctive relief, the
Court finds that certification under Rule 23(b)(2) is also appropriate. See Cates, 253 F.R.D. at
431 (“Although plaintiffs request past compensation, monetary damages are not their exclusive
or predominate [sic] requested relief. Past compensation covers only four and a half years of
nonpayment, a relatively short period of time compared to the cost of providing retirees with
medical benefits for life”).1
1
Having found that the class could be certified pursuant to Rule 23(b)(1) or Rule
23(b)(2), the Court need not reach the question of certification pursuant to Rule 23(b)(3).
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iii. Summary
Because the Class meets the requirements of Rule 23, the Court certifies the following
Class, composed of two subclasses:
Subclass A: All individuals and businesses that have (1) been subjected to Point of Sale
Inspections between September 10, 2014 and January 30, 2017; and (2) paid Points of
Sale Inspection fees to the City of Bedford in conjunction with the aforesaid
inspection(s).
Subclass B: All individuals and businesses that have (1) been subjected to rental
inspections between September 10, 2014 and February 14, 2017; and (2) paid Rental
Inspection fees to the City of Bedford in conjunction with the aforesaid inspection(s).
D. Class Counsel
Pursuant to Rule 23(g), a court that certifies a class must also appoint class
counsel. Rule 23(g) states, in pertinent part:
(1) Appointing Class Counsel. Unless a statute provides otherwise, a court that
certifies a class must appoint class counsel. In appointing class counsel, the court:
(A) must consider: (i) the work counsel has done in identifying or
investigating potential claims in the action; (ii) counsel’s experience in
handling class actions, other complex litigation, and the types of claims
asserted in the action; (iii) counsel’s knowledge of the applicable law; and
(iv) the resources that counsel will commit to representing the class; . . .
(2) Standard for Appointing Class Counsel. When one applicant seeks appointment
as class counsel, the court may appoint that applicant only if the applicant is
adequate under 23(g)(1) and (4).
...
(4) Duty of Class Counsel. Class counsel must fairly and adequately represent the
interests of the class.
Fed. R. Civ. P. 23(g). Appointment of counsel is not contested. The Court certifies current
counsel, Maurice A. Thompson, as class counsel.
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IV. Conclusion
For the foregoing reasons, the Court grants the Motion for Class Certification. Because
the City has modified its Rental Inspection ordinance (ECF No. 31), the Court denies the Oral
Motion for Temporary Restraining Order as moot.
IT IS SO ORDERED.
July 28, 2017
Date
/s/ Benita Y. Pearson
Benita Y. Pearson
United States District Judge
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