Court News Ohio
Court News Ohio
Court News Ohio

Wednesday, July 18, 2018

Cindy Satterfield et al. v. Ameritech Mobile Communications, et al., Case no. 2017-0684
Eighth District Court of Appeals (Cuyahoga County)

Embassy Healthcare v. Cora S. Bell, Case no. 2017-1031
Twelfth District Court of Appeals (Warren County)

State of Ohio v. Dustin Bishop, Case nos. 2017-1715 and 2017-1716
Second District Court of Appeals (Montgomery County)


Can Retail Customers File Class-Action Lawsuit Based on PUCO Wholesale Cell Service Ruling?

Cindy Satterfield et al. v. Ameritech Mobile Communications, et al., Case no. 2017-0684
Eighth District Court of Appeals (Cuyahoga County)

ISSUES:

  • Under R.C. 4905.61, if the Public Utilities Commission of Ohio (PUCO) finds a public utility has committed a regulatory violation, may only the “person” injured by the violation seek damages in common pleas court?
  • If the PUCO finds that a violation under R.C. 4905.61 is based on a complaint filed by a wholesale supplier of cellular service, can a class of retail cell service customers claim “injury” from the ruling and seek damages in common pleas court?
  • At the class certification stage, must a proposed class of injured customers produce a working model that indicates how damages would be assessed for each class member, or can the model to determine damages be produced later in the process?

OVERVIEW:
This dispute has its origins in the early days of mass consumer cellular telephone service. In 1989, the Ohio General Assembly allowed the Public Utilities Commission of Ohio (PUCO) to establish a competitive, rather than regulated, market for cellular telephone service. Just a few years later, Ameritech Ohio was accused of violating the rules and favoring its own cellular retailers over the competition. After a 10-year legal battle, the Ohio Supreme Court found Ameritech violated the rights of a cell service wholesaler doing business as Cellnet. Cellnet estimated its damages at more than $1 billion and reached a $22 million settlement with Ameritech.

Based on the Cellnet decision, customers impacted by actions taken by Ameritech and Verizon Wireless filed a class-action lawsuit in Cuyahoga County in 2003, alleging that these phone companies inflated prices and drove down competition. The phone companies challenged the decision, which spent more than 12 years in trial court before a judge ruled the customers could be certified as a class.

The phone companies appealed the case at a point where the Eighth District Court of Appeals agreed that a class could be certified. Ameritech remains as a defendant in the case and appealed the class certification and the right of the class to sue to the Ohio Supreme Court. The matter has drawn interest from most of Ohio public utilities as well as national and statewide business organizations, which filed amicus curiae briefs claiming the lower court decisions could open the door for increased class-action lawsuits against Ohio utilities and other businesses.

BACKGROUND:
To establish a competitive cell service market, the federal government licensed two cellular telephone carriers in each Ohio major market to offer cell service. Those two suppliers had to set up separate retail and wholesale cellular operations and offer cellular wholesalers service at the same cost it supplied service to its own retailers. This was intended to drive competition as the wholesalers could develop alternate ways to package and sell cell phone service.

In 1993 a Cincinnati wholesaler known as Cellnet attempted to buy wholesale cell service from Ameritech Ohio’s Cincinnati-area affiliate. Cellnet filed a complaint under R.C. 4905.26 with the PUCO alleging that Ameritech was discriminating against it by not offering service at the same rates as its own retailers. The PUCO found Ameritech violated the new cell rules in various ways, which permitted Cellnet to take the next step to seek compensation. Cellnet then invoked R.C. 4905.61. That law indicated that those the PUCO found were harmed could sue in common pleas court and seek treble damages, which is three times the actual damages the company could calculate.

In 2002, the Ohio Supreme Court affirmed the PUCO’s decision, and found that Cellnet was impacted between 1993 and 1995. Using the ruling, lawyers representing customers of Ameritech and Verizon Wireless initiated a class-action lawsuit to recover from potential overcharges for 1993 through 1995. As the lawsuit proceeded, parties were dropped (including Cindy Satterfield and Verizon). The dispute now before the Supreme Court is centered among a defunct business, Intermessage Communications, and Ameritech. Intermessage is the lead plaintiff in the class-action lawsuit against Ameritech.

Ameritech objected to class-action certification, arguing among other things that Intermessage was not a valid plaintiff because it wasn’t typical of a retail customer and it waited too long after it was dissolved to file the lawsuit. The phone company also argued the PUCO decision concerned wholesale, not retail, sales of cell service, and that the PUCO never issued a finding that would allow retail users to sue for damages. Finally, it argued that according to a 2013 U.S. Supreme Court decision, Comcast v. Behrend, the class-action members had to produce a working model showing how it would determine the damages suffered by nearly 200,000 customers at the certification stage, and that Intermessage failed to do that. The trial court rejected the phone company’s argument and certified the class. The Eighth District affirmed the decision, and the phone company appealed to the Ohio Supreme Court, which agreed to hear the case.

Ruling Only Applied to Wholesaler, Phone Company Argues
The parties dispute the meaning of R.C. 4905.61, which states: “If any public utility or railroad does, or causes to be done, any act or thing prohibited by Chapters 4901, 4903, 4905, 4907, 4909, 4921, 4923, and 4925 of the Revised Code, or declared to be unlawful, or omits to do any act or thing required by such chapters, or by order of the public utilities commission, such public utility is liable to the person, firm, or corporation injured thereby in treble the amount of damages sustained in consequence of such violation, failure, or omission.”

Ameritech argues the second clause determines who can sue and that “only persons whose rights were found to be violated” may sue. The PUCO found that Ameritech violated the rights of a wholesaler at the wholesale level and only Cellnet was proven to show direct harm from the violations. The ruling said nothing about harm at the retail level, and retail customers cannot use the PUCO and Court’s decision regarding Cellnet as the basis for their lawsuit against the company, Ameritech asserts.

The phone company also argues the claims made by retail customers from 23 to 25 years ago suffer from an inability to trace and determine the damage the company might have caused. The lawsuit against the company can’t move forward, Ameritech maintains, because the customers haven’t produced a model that would be used to calculate the potential damage each of them could have suffered by not having access to as many service providers. The company has urged Ohio courts to adopt the U.S. Supreme Court’s reasoning in Comcast, requiring Intermessage the working model. Without that model, the company argues, the critical requirement for filing a class-action lawsuit — that common law and facts predominate over individual issues — is missing. The Comcast decision indicates that determination should be made at the class certification stage, which the company argues would save a lot of time and money, and benefit both parties in the case.

Lawsuit Not Limited to Complaint Filer, Consumer Argues
Intermessage argues the phone company’s premise that the PUCO ruling only applies to those who directly filed a complaint runs contrary to the law when read in connection with R.C. 4905.25. The law states that “any person, firm, or corporation, or upon the initiative or complaint of the public utilities commission,” may file a complaint against a utility. The class members argue that the PUCO, or a group representing consumers, or a competitor, can file a complaint and may not be directly impacted by the rule violation. Because the Cellnet decision determined that Ameritech violated rules that hurt its own direct consumers, those consumers can proceed to use R.C. 4905.61 to have a common pleas court award damages. They argue that under Ameritech’s reasoning, if the PUCO or a trade association brings a complaint and is successful, there is no way for the customers of the utility to ever collect damages for the harm done to them because they weren’t the ones bringing the complaint.

Intermessage also argues the Comcast decision doesn’t apply to the situation that the former Ameritech customers are facing. Intermessage argues nothing in that ruling would require an expert witness to produce a model that determines damages at the certification stage. The company argues all that is required is a witness to explain how a model would work and how it would determine damages. Intermessage indicates its expert worked with two renowned economics professors, including a Nobel Prize winner, to develop a theory to determine damages. The model is based on the one used by Cellnet that included the Nobel Prize in Economics-winning model to determine damages. The company maintains the trial court and Eighth District concluded the group met the requirements to be certified as a class. If during the trial, the judge determined the model wouldn’t work, the trial court could dismiss the case.

Friend-of-the-Court Briefs
Four amicus curiae briefs supporting the Ameritech’s position has been submitted. Utilities AEP Ohio, the Cleveland Electric Illuminating, the Dayton Power & Light Company, Duke Energy Ohio, Ohio Edison Company, and the Toledo Edison Company filed a joint brief. The U.S. Chamber of Commerce and the Ohio Chamber of Commerce together filed a brief. A joint brief was submitted by the Ohio Association of Civil Trial Attorneys, Ohio Alliance for Civil Justice, Ohio Council of Retail Merchants, and the Ohio Insurance Institute. And former Ohio Attorney General Betty D. Montgomery filed a brief.

- Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing Ameritech Mobile Communications Inc. et al.: Irene Keyse-Walker, 216.592.5000

Representing Intermessage Communications, et al.: Robert Fogarty, 216.621.0150

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Must Healthcare Company First Sue Deceased Person’s Estate for Expenses Before Making Claim Against Surviving Spouse?

Embassy Healthcare v. Cora S. Bell, Case no. 2017-1031
Twelfth District Court of Appeals (Warren County)

ISSUES:

  • Does R.C. 2117.06(C), which involves a creditor’s claims against a deceased person’s estate, mandate that a claim based on R.C. 3103.03, which describes certain requirements a spouse has to supply “necessaries” to the other spouse, must first be made to the decedent’s estate?
  • If a creditor doesn’t timely file a claim against a decedent’s estate, is it impossible to prove that the decedent is unable to pay the claim and, as a result, a claim against the spouse under R.C. 3103.03 is barred?

BACKGROUND:
Cora Bell’s husband moved into Carlisle Manor Health Care, a skilled nursing care facility in Warren County, in January 2014, and he died on May 22, 2014. In November 2014, Embassy Healthcare, which operates Carlisle, sent a letter to Bell about payment of her husband’s outstanding bill of $1,678.

Embassy filed a lawsuit against Bell on June 29, 2015, alleging that she was responsible for the debt based on R.C. 3103.03, which requires spouses to support each other with “necessaries” when one is unable to do so. Those “necessaries” may include food, medicine, medical expenses, housing, and clothing. The trial court, however, granted summary judgment to Bell. The court determined that Ohio probate law – specifically, R.C. 2117.06 – required the company to submit its claim to the estate of Bell’s husband and that step had to take place within six months of his May 2014 death.

Embassy appealed to the Twelfth District Court of Appeals, which reversed the trial court’s decision. The Twelfth District ruled that the lawsuit against Bell under R.C. 3103.03 was an independent claim against her, not her husband, so it wasn’t prohibited by the state’s probate law.

Bell appealed to the Ohio Supreme Court, which accepted the case.

Laws at Issue

The “necessaries” statute
R.C. 3103.03 states:
“(A) Each married person must support the person’s self and spouse out of the person’s property or by the person’s labor. If a married person is unable to do so, the spouse of the married person must assist in the support so far as the spouse is able.

(C)If a married person neglects to support the person’s spouse in accordance with this section, any other person, in good faith, may supply the spouse with necessaries for the support of the spouse and recover the reasonable value of the necessaries supplied from the married person who neglected to support the spouse unless the spouse abandons that person without cause.”

Probate provisions
R.C. 2117.06 states, “Except as provided in section 2117.061 of the Revised Code [regarding Medicaid benefits], all claims shall be presented within six months after the death of the decedent, whether or not the estate is released from administration or an executor or administrator is appointed during that six-month period.”

The statute continues: “… [A] claim that is not presented within six months after the death of the decedent shall be forever barred as to all parties, including, but not limited to, devisees, legatees, and distributes.”

Laws at Issue

The “necessaries” statute
R.C. 3103.03 states:
“(A) Each married person must support the person’s self and spouse out of the person’s property or by the person’s labor. If a married person is unable to do so, the spouse of the married person must assist in the support so far as the spouse is able.

(C)If a married person neglects to support the person’s spouse in accordance with this section, any other person, in good faith, may supply the spouse with necessaries for the support of the spouse and recover the reasonable value of the necessaries supplied from the married person who neglected to support the spouse unless the spouse abandons that person without cause.”

Probate provisions
R.C. 2117.06 states, “Except as provided in section 2117.061 of the Revised Code [regarding Medicaid benefits], all claims shall be presented within six months after the death of the decedent, whether or not the estate is released from administration or an executor or administrator is appointed during that six-month period.”

The statute continues: “… [A] claim that is not presented within six months after the death of the decedent shall be forever barred as to all parties, including, but not limited to, devisees, legatees, and distributes.”

Claim First Must Be Filed Against Estate, Surviving Spouse Reasons
Bell notes that a claim against a spouse can be brought under R.C. 3103.03, the necessaries statute, only after it’s determined that the other spouse is unable to support himself or herself. Bell argues that, after her husband’s death, Embassy had to first submit its claim to her husband’s estate, as required in R.C. 2117.06, to find out whether the estate would pay the bill. Because the claim was for nursing home services provided to her husband, his estate was the proper place for Embassy to make its claim, Bell reasons. However, Embassy never submitted a claim to the estate within the six-month statutory deadline.

Bell stresses that the probate law applies to “all claims,” and creates no exception for necessaries claims. She also argues that Embassy’s claim now is “forever barred,” based on that law.

When deciding that Embassy’s claim under the necessaries statute was an independent claim against her, the Twelfth District created a conflict between legislative policies recognizing that spouses must support each other and those providing for efficient estate management, Bell maintains. The ruling also wrongly gives the decedent’s creditors the ability to avoid probate altogether and sue the surviving spouse instead, she argues.

“If R.C. 3103.03 were an independent claim, it would disrupt the orderly administration of the estate by allowing necessaries creditors to collect outside the administration of the decedent’s estate …,” her brief states.

Given that Embassy didn’t submit its claim to the estate by the deadline, Bell contends that Embassy is unable to establish that her husband’s estate was unable to pay the bill. Without showing that the estate couldn’t compensate the nursing home for the services provided to her husband, Bell asserts that Embassy isn’t permitted to pursue a claim against her under the necessaries statute. Bell asks the Supreme Court to reinstate the trial court’s dismissal of the lawsuit.

Claim for Medical Expenses Can Be Made Against Surviving Spouse, Company Indicates
Embassy counters that a claim under the necessaries statute against a married person who isn’t the debtor isn’t dependent on any other statute, such as Ohio’s probate law, and doesn’t depend on whether the spouse with the debt is alive or dead.

R.C. 2117.06 allows creditors with claims against an estate to present their claims to the estate within six months. Embassy maintains that the law’s critical language is “against an estate” of the decedent. Its claim for necessaries under R.C. 3103.03 isn’t a claim against an estate, but instead is a claim against a married person who may be shown to be able to support her spouse for this medical bill, Embassy argues. Along with the Twelfth District, two other appellate courts have adopted this interpretation that creditors can file claims against the estate or against the surviving spouse, according to Embassy.

“At bottom, R.C. 2117.06 and 3103.03 are two separate and distinct statutes with separate and distinct requirements against separate and distinct individuals allowing separate and distinct remedies,” the company’s brief states.

In Embassy’s view, there is no conflict between the legislative policies of these two laws. The company views itself, and nursing homes, hospitals, and pharmacies, as suppliers of necessaries entitled to recover expenses for those necessaries when a married person neglects to support the spouse, as described in R.C. 3103.03(C). R.C. 2117.06 applies to claims against a decedent’s estate, and R.C. 3103.03 applies to claims against a non-debtor spouse for necessaries provided while the spouse is alive, Embassy concludes.

The concerns raised by Bell and the groups that filed a joint amici brief in this case that probate law is designed to protect surviving spouses are not an issue, Embassy maintains. The company notes that the necessaries statute addresses this concern by providing protections to a spouse who is unable to pay for necessaries.

Embassy asks the Court to uphold the Twelfth District’s judgment and remand the case to allow the municipal court to consider the case’s merits.

Several Organizations Argue in Support of Bell
A friend-of-the-court brief backing Bell’s position has been submitted collectively by these organizations:

  • Advocates for Basic Legal Equality, Inc.
  • Community Legal Aid Services
  • Legal Aid Society of Cleveland
  • Legal Aid Society of Columbus
  • Ohio Association for Justice
  • Southeastern Ohio Legal Services

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing Cora S. Bell: Miriam Hirsch Sheline, 513.458.5509

Representing Embassy Healthcare: Daniel Friedlander, 216.685.1169

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Must Defendant Be Told Potential Consequences of Post-Release Control Violation When Pleading Guilty to New Offense?

State of Ohio v. Dustin Bishop, Case nos. 2017-1715 and 2017-1716
Second District Court of Appeals (Montgomery County)

ISSUE: When a criminal defendant on post-release control for a prior felony appears before a trial court to plead guilty to a new felony, must the trial court inform the defendant that it can terminate the defendant’s post-release control and impose a consecutive prison sentence for the post-release control violation?

BACKGROUND:
A Montgomery County grand jury indicted Dustin Bishop in December 2016 for possession of heroin and drug paraphernalia. Based on a plea agreement, Bishop pled guilty to drug possession, and the state agreed to dismiss the drug paraphernalia count. The trial court accepted the plea.

At Bishop’s sentencing hearing, the trial court sentenced him to nine months in prison for drug possession. When he committed the offense, Bishop was on postrelease control (PRC) for an earlier crime. Because of that status, the trial court also imposed a one-year prison term, to be served consecutively to the nine-month sentence, for Bishop’s violation of his PRC conditions.

Bishop appealed to the Second District Court of Appeals. Among his arguments, Bishop claimed that his guilty plea was invalid because the trial court didn’t alert him that it could impose an additional sentence for his PRC violation on top of the agreed-to nine-month sentence for the current offense. The Second District agreed, reversing Bishop’s conviction and guilty plea.

State Appeals Courts Disagree on Issue
The Montgomery County Prosecutor’s Office notified the Ohio Supreme Court that the Second District had certified that its decision was in conflict with two other state appellate courts. The prosecutor also appealed the Second District’s decision to the Supreme Court. The Court agreed that a conflict exists on this issue in the state courts of appeals and also accepted the prosecutor’s appeal. The Court consolidated the two cases for consideration.

The prosecutor’s brief notes that after the Second District’s ruling, Bishop’s case returned to the trial court where he pled guilty to drug possession and was sentenced in January 2018 to time already served. While a ruling from the Ohio Supreme Court no longer will affect Bishop, the prosecutor asks the Court to address the legal question because of its public importance given that the situation likely will occur again.

Criminal Rule Applies Only to Plea to Current Offense, State Maintains
The prosecutor describes a rule for criminal cases, Crim.R. 11, that requires courts accepting a guilty or no contest plea to determine, in part, that the defendant makes the plea voluntarily, understanding the nature of the charges and the maximum penalty involved; to inform the defendant of the effect of the plea; and to inform the defendant that by pleading guilty or no contest the defendant is waiving certain constitutional rights.

The prosecutor notes that decisions from the Eighth District Court of Appeals (State v. Dotson, 2015) and Fifth District Court of Appeals (State v. Hicks, 2010) have come to a different conclusion than the Second District. The Eighth and Fifth appellate courts determined that Crim.R. 11 doesn’t require a court to advise defendants about the possible effect a guilty plea may have on the person’s PRC because the PRC stems from a separate criminal case.

In addition, the prosecutor argues that the Ohio Supreme Court has ruled that “the maximum penalty” doesn’t include mentioning penalties that could be imposed based on a separate case. In State v. Johnson (1988), the Supreme Court, referring to Crim.R. 11, stated, “In the context of ‘the plea’ to ‘the charge,’ the reasonable interpretation of the text is that ‘the maximum penalty’ is for the single crime for which ‘the plea’ is offered. It would seem to be beyond a reasonable interpretation to suggest that the rule refers cumulatively to the total of all sentences received for all charges which a criminal defendant may answer in a single proceeding.”

R.C. 2929.141 states that courts may terminate a PRC term when a person on PRC is convicted of or pleads guilty to a new felony. The court may impose a prison term for the PRC violation and, if instituted, that prison term must be served consecutive to any prison term charged for the new felony. Terminating a PRC term and imposing a prison sentence for a PRC violation are at the trial court’s discretion, and take place after a defendant has been found guilty, the prosecutor indicates. While acknowledging that “it would be a sound policy” to advise a defendant in this circumstance of the trial court’s authority to apply additional prison time for the PRC violation, the prosecutor argues the statute and the criminal rule don’t require that notification. 

Defendant Must Understand Full Consequences of Pleading Guilty, Bishop Asserts
Both the prosecutor and Bishop note that the constitutional right to due process requires that a plea be made knowingly, intelligently, and voluntarily. Noting that Crim.R. 11 requires a court to ensure that a defendant understands the consequences of a guilty or no contest plea, Bishop argues that R.C. 2929.141 gives a court increased sentencing power and that power has consequences for the defendant that must be explained to meet due process requirements. Bishop states in his brief that State v. Ballard (1981), an Ohio Supreme Court decision, essentially conveyed that “reality, not ritual, controls when it comes to whether a plea is knowing and voluntary.”

Bishop distinguishes Johnson, maintaining that the defendant in that case was told about the maximum penalty for each of the charges in his case and that the sentences for each could run concurrently or consecutively. But in his case, Bishop stated he wasn’t told about the potential penalty for his PRC violation, and the court could impose an additional sentence only consecutively.

“Because R.C. 2929.141 automatically enhances the sentencing power of a trial court for a pleading defendant who is on post-release control, it necessarily involves a greater potential maximum penalty, a greater potential restraint on one’s liberty,” Bishop’s brief argues. “Knowledge of this fact is the only way a defendant can reckon the maximum penalty in order to make a reasoned decision whether to plead or not.”

Because the trial court never told him, Bishop contends he was unable when deciding to plead guilty to consider the additional prison term he might receive for his PRC violation related to an earlier case. Reading Crim.R. 11 so narrowly leads to unreasonable and arguably absurd results, Bishop contends, and he asks the Court to uphold the Second District’s judgment.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket (Case nos. 2017-1715 and 2017-1716).

Contacts
Representing the State of Ohio from the Montgomery County Prosecutor’s Office: Michael Scarpelli, 937.225.5543

Representing Dustin Bishop: Carl Bryan, 937.506.4378

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These informal previews are prepared by the Supreme Court's Office of Public Information to provide the news media and other interested persons with a brief overview of the legal issues and arguments advanced by the parties in upcoming cases scheduled for oral argument. The previews are not part of the case record, and are not considered by the Court during its deliberations.

Parties interested in receiving additional information are encouraged to review the case file available in the Supreme Court Clerk's Office (614.387.9530), or to contact counsel of record.