Alert

Alert: Ohio Supreme Court Reinstates Law Severely Limiting Damages Under the Ohio Consumer Sales Practices Act

August 6, 2007

On August 1, 2007, the Ohio Supreme Court issued a decision that, among other things, upheld certain limits on damages recoverable under Ohio’s Consumer Sales Practices Act.  R.C. 1345.01 et seq.  Below is a discussion of that decision and its ramifications.

Background

In late December 2006, the Ohio House and Senate approved Senate Bill 117, and the bill was presented to Governor Bob Taft.  The bill made changes to the Ohio Consumer Sales Practices Act, products liability law, and discovery of attorney-client communications in insurance bad faith litigation suits.  Governor Taft waited the required time and filed the bill without his signature on January 5, 2007, thus making the bill law. 

When newly elected Governor Ted Strickland took office on January 8, 2007, he instructed Secretary of State Jennifer Brunner to retrieve the Senate Bill 117 for his veto.  The Ohio General Assembly, Ohio Senate President, and Speaker of the Ohio House of Representatives filed an action for a writ of mandamus compelling the Secretary of State to treat the bill as valid law and carry out her duties accordingly. 

On August 1, 2007, the Ohio Supreme Court issued a decision declaring Governor Strickland’s veto of S.B. 117 invalid and issued a writ of mandamus directing the Secretary of State to process the bill as required by law.  State ex rel. Ohio Gen. Assembly v. Brunner, ____ Ohio St.3d ___, 2007-Ohio-3780 (2007).  As a result, the provisions of S.B. 117 are now law in Ohio.

Senate Bill 117

      Ohio Consumer Sales Practices Act

S.B. 117 amends Ohio’s Consumer Sales Practices Act by making the following changes in that statute:
 
• Limiting the amount of damages recoverable to a consumer’s actual economic damages.  Prior to the bill, the amount of economic damages recoverable was either three times the amount of damages or $200, whichever was greater.  Thus, the onerous triple damages provision has been eliminated.

• Capping non-economic damages recoverable at $5,000.

Insurance Bad Faith Litigation and Attorney-Client Privilege

• Requiring an initial or prima facie showing of bad faith, fraud, or criminal misconduct on the part of an insurance company before the insurance company’s attorney may be compelled to testify about related attorney-client communications.

S.B. 117 also makes certain changes with respect to product liability law and the use of criminal convictions as evidence in later civil actions.  The effective date of S.B. 117 is July 1, 2007.  In State ex rel. Ohio Gen. Assembly v. Brunner, supra the parties did not request a stay of the bill’s effective date to allow for circulation of referendum petitions.  However, a stay may be sought to allow the circulation of such petition. 

This information on S.B. 117 and the Ohio Supreme Court’s decision in State ex rel. Ohio Gen. Assembly v. Brunner is general in nature and should not be construed as legal advice.