MICHAEL H. WATSON, District Judge.
Plaintiff in this diversity action asserts claims under the Ohio Consumer Sales
Plaintiff John W. Ferron is an attorney who lives and practices law in the State of Ohio. He purposely solicits, receives, and saves email advertisements, and then files lawsuits, arguing the email advertisements violate Ohio law. Ferron estimates he has saved about 45,000 email advertisements over a six month period.
The instant lawsuit concerns emails that Ferron received which advertised the satellite dish products and services of Dish Network. Ferron has indicated he visited about twelve satellite dish websites and purposely provided his email addresses to those sites. Before he provided his email addresses to the websites, Ferron contacted Dish Network call centers to obtain information about the terms and conditions of various Dish Network products and services.
Ferron filed this action after he collected a large number of satellite dish email advertisements. Ferron alleges that the email advertisements he received were deceptive in their price quotes, offers of free equipment, and terms of subscription. Ferron was previously aware of terms and conditions for obtaining Dish Network service and products as a result of his correspondence with the Dish Network call centers.
EchoStar provides Dish Network products and services throughout the United States. EchoStar provides these products to retailers, not to individual customers. The retailers then sell products to individual customers, and are responsible for their own marketing and advertising. These retailers often hire third-parties to market their products, without correspondence with EchoStar. EchoStar has no input regarding email advertising, which is sometimes utilized by a retailers to market Dish Network products.
E-Management is a registered Florida Corporation that operates primarily in Florida. E-Management is an authorized retailer of EchoStar, and is also authorized to market for Dish Network products and services. E-Management communicates with a potential customer, if a sale is made, E-Management forwards the customer information to EchoStar.
The standard governing summary judgment is set forth in Federal Rule of Procedure 56(c), which provides:
Fed.R.Civ.P. 56(c).
The Court may grant summary judgment if the opposing party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). See also Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 588, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Petty v. Metropolitan Government of Nashville-Davidson County, 538 F.3d 431, 438-39 (6th Cir.2008).
Thus, the central issue is "`whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Hamad v. Woodcrest Condo. Ass'n, 328 F.3d 224, 234-35 (6th Cir.2003) (quoting Anderson, 477 U.S. at 251-52, 106 S.Ct. 2505).
Defendants advance seven grounds for summary judgment. First, they maintain Ferron's OCSPA claims fail because Ferron had prior knowledge of the terms and conditions for the purchase of DISH Network products, and therefore he could not have been deceived by emails which did not contain the terms and conditions. Second, defendants contend the omitted terms and conditions were merely incidental and not material. Third, EchoStar argues that it is entitled to summary judgment on Ferron's OCSPA and EMAA claims because it did not receive a direct benefit from the third-party email advertisements. Fourth, defendants assert Ferron cannot prove any OCSPA violations with respect to 155 of the 703 emails at issue in this case. Fifth, defendants aver that Ferron's preexisting business relationship and consent to receive the email advertisements precludes liability under the EMAA. Sixth, defendants posit that the subject email advertisements are not "offers" or "solicitations to offer" and therefore do not support liability under the OCSPA. Seventh, defendants maintain Ferron cannot prevail on his OCSPA claims concerning the failure to register the business with the Ohio Secretary of State because the registration requirement does not apply to companies engaged solely in interstate commerce, and because in any event, the failure to register is not an actionable wrong under the OCSPA. The Court finds the first issue to be dispositive, and therefore declines to address the remaining grounds.
Defendants first argue that they are entitled to summary judgment on Ferron's OCSPA claims because Ferron was already aware of the terms and conditions for the purchase of DISH Network products and services, and therefore he could not have been deceived by emails that did not contain the terms and conditions. Ferron asserts that he is not required to prove that he was deceived in order to prevail on his OCSPA claims.
The purpose and history of the OCSPA were reviewed in Thomas v. Sun Furniture and Appliance Co., 61 Ohio App.2d 78, 399 N.E.2d 567 (1978). The court in Thomas observed that the OCSPA was modeled, in part, after the Uniform Consumer Sales Practices Act ("UCSPA"). 61 Ohio App.2d at 81, 399 N.E.2d 567. The UCSPA provided that it was to be construed "`to protect consumers from suppliers who commit deceptive and unconscionable
Id. (quoting Ohio Legislative Service Commission, Report No. 102, Fraud, Deception and Other Abuses in Consumer Sales and Services (1971)).
Charvat v. Farmers Ins. Columbus, Inc., 178 Ohio App.3d 118, 133, 897 N.E.2d 167 (2008).
Ferron asserts his OCSPA claims under, inter alia, Ohio Rev.Code § 1345.02(A), which provides as follows:
Id. The OCSPA defines "supplier" as "a seller, lessor, assignor, franchisor, or other person engaged in the business of effecting or soliciting consumer transactions, whether or not the person deals directly with the consumer." Ohio Rev.Code § 1345.01(C). The OCSPA defines "consumer transaction" as "a sale, lease, assignment, award by chance, or other transfer of an item of goods, as service, a franchise, or an intangible, to an individual for purposes that are primarily personal, family, or household, or solicitation to supply any of these things." Ohio Rev.Code § 1345.01(A).
The OCSPA grants the Ohio Attorney General the authority to define with reasonable specificity acts which violate Ohio Rev Code §§ 1345.02 and 1345.03. Ohio Rev.Code § 1345.05(B)(1). Ferron asserts that defendants have committed several acts that the Ohio Attorney General has identified as deceptive in the Ohio Administrative Code ("OAC"). First, Ferron refers to a section of the OAC that provides in part: "It is a deceptive act or practice in connection with a consumer transaction for a supplier, in the sale or offering for sale of goods or services, to make any offer in written or printed advertising or promotional literature without stating clearly and conspicuously in close proximity to the words stating the offer any material exclusions, reservations, limitations, modifications, or conditions." OAC § 109:4-3-02. Second, Ferron relies upon an OAC provision which places limitations on the word "free." OAC § 109:4-3-04. That section states in pertinent part, "[w]hen using the word "free" in a consumer transaction, all of the terms, conditions, and obligations
Ferron argues that the subject DISH Network email advertisements violate the aforementioned OAC provisions because the advertisements fail to disclose: (1) that the consumer must agree to subscribe to DISH Network's satellite television services for at least eighteen months in order to receive the free goods and services; (2) that the monthly price quoted in the advertisements applies only to the first ten months of the required eighteen-month subscription; (3) that Dish Network retains ownership of the advertised "FREE" satellite television equipment; and (4) that the consumer must undergo a credit check and provide DISH Network with a valid credit card.
Defendants argue that Ferron cannot recover for the alleged violations of the OCSPA because he could not have been deceived by any of the email advertisements. Defendants rely primarily on four Ohio appellate decisions in support of this proposition: Chesnut v. Progressive Cas. Ins. Co., 166 Ohio App.3d 299, 850 N.E.2d 751 (8 Dist.2006); Walker v. Dominion Homes, Inc., 164 Ohio App.3d 385, 842 N.E.2d 570 (10 Dist.2005); Motzer Dodge Jeep Eagle, Inc. v. Ohio Atty. Gen., 95 Ohio App.3d 183, 642 N.E.2d 20 (12 Dist. 1994); Crull v. Maple Park Body Shop, 36 Ohio App.3d 153, 521 N.E.2d 1099 (12 Dist. 1987).
In Chesnut, the plaintiff, a Louisiana resident, bought a used 2000 Saturn SL2 automobile from a dealership in Louisiana in November 2000. In July 2000, the original owner's insurer, Progressive, declared the Saturn a total loss as a result of fire damage. When Progressive sold the car to the dealership, it determined that the cost of repairing the Saturn was less than seventy-five percent of the actual cash value. This allowed Progressive to sell the car with a clean title, as opposed to a salvage title. The dealership took title to the Saturn in September 2000.
The plaintiff saw the Saturn disassembled at the dealership before he purchased it. The dealership informed the plaintiff that the Saturn was being rebuilt because it had sustained fire damage. The plaintiff paid $8,500 for the Saturn, which at the time had been driven less than 6000 miles. Afterwards, the plaintiff drove the Saturn about 50,000 miles. He experienced virtually no problems with the car.
In January 2002, the plaintiff filed an action against Progressive, asserting violation of the OCSPA as well as unjust enrichment. The plaintiff premised both claims on the allegation that Progressive violated Louisiana's titling statute by failing to obtain a salvage title after declaring the Saturn a total loss. Progressive filed a motion for summary judgment, which the trial court granted.
On appeal, the plaintiff in Chesnut argued that the trial court erred by finding as a matter of law that Progressive did not commit a deceptive act. Specifically, the plaintiff contended that Progressive violated the OCSPA in two respects. First, he asserted Progressive per se violated the
Id. at 307-08, 850 N.E.2d 751.
In July 1984, the plaintiff in Crull arranged to have the defendant paint his 1971 Mustang so that he could drive it and enter it in an occasional car show. In early July 1984, the defendant gave the plaintiff a written estimate of $1,348.20 for the paint job. The plaintiff delivered the car to the defendant's shop in late July. A few weeks later the defendant noticed that hail had damaged the Mustang. The defendant then told the plaintiff that additional work would be required. The plaintiff approved the additional cost. The defendant finished the paint job in October 1984, and the plaintiff was apparently satisfied with the work. Nevertheless, the plaintiff later became dissatisfied with the quality of the paint job, and filed an action for breach of contract and violation of the OCSPA. In part, the plaintiff alleged the defendant violated the OCSPA by failing to post a sign stating that consumers had the right to receive a written estimate as required by OAC § 109:4-3-13(A)(2). The trial court granted the defendant's summary judgment motion as to the plaintiff's OCSPA claims, and the case went to trial on the breach of contract claim. The trial court found in favor of the defendant following the trial, and dismissed the action.
On appeal, the plaintiff in Crull argued that the trial court erred in granting summary judgment on his OCSPA claim. The appellate court rejected the argument, stating:
Crull, 36 Ohio App.3d at 158, 521 N.E.2d 1099. Together, Chesnut and Crull stand for the proposition that a plaintiff who could not have been deceived by the a supplier's conduct cannot prevail on an OCSPA claim.
In the instant case, defendants have come forward with evidence showing that early on Ferron, who is a lawyer, acquired knowledge of all of the terms and conditions for obtaining DISH Network products and services. Ferron does not dispute defendants' assertion, and in fact expressly acknowledges that he is not alleging that he was deceived by any of the alleged OCSPA violations. He argues, however, that the above-mentioned Ohio decisions are distinguishable on the basis that the plaintiffs in those cases alleged that they were actually deceived by the supplier's conduct. (Memo. In Opp. (Doc. 306) at 22). Ferron contends that in contrast to the plaintiffs in the cases that defendants cite, he does not assert that he was deceived. Rather, Ferron maintains, he is asserting violation of specific consumer advertising regulations which were promulgated by the Ohio Attorney General under Ohio Rev.Code § 1345.05(B)(2).
Ferron's arguments are without merit. First, nothing in Chesnut or Crull indicates that the decisions turned upon the fact that the plaintiffs claimed to have
Ferron relies on three unreported Ohio appellate decisions that stand for the proposition that a consumer need not prove the supplier acted with an intent or knowledge in order to prevail on an OCSPA claim. See Grieselding v. Krischak, No. L061010, 2007 WL 1575521, at *3 (Ohio App. 6 Dist. June 1, 2007); Zindle v. Hawks, No. 13016, 1987 WL 16660, at *3 (Ohio App. 9 Dist. Sept. 2, 1987); Moyer Excavating & Trucking v. Lewis, No H-84-11, 1984 WL 14421, at *1 (Ohio App. 6 Dist. Nov. 16, 1984). These decisions are largely inapposite because defendants do not argue that Ferron has failed to adduce evidence of intent or knowledge; rather, they maintain that Ferron cannot recover under the OCSPA when it is clear that he was not deceived by the email advertisements. Zindle touches upon the latter issue, and therefore merits further discussion.
The plaintiff in Zindle purchased a refrigerator. His wife punctured the refrigerator's evaporator with a knife while trying to remove ice buildup. The plaintiff then contacted the retailer who sold him the refrigerator, and the retailer referred the plaintiff to the defendant. The plaintiff contacted the defendant, and the defendant informed the plaintiff that the necessary replacement parts would cost $155 and that recharging the refrigeration system would cost $72. The plaintiff declined to purchase the replacement parts, and instead opted to have someone else weld the puncture. After this was done, the plaintiff took the refrigerator, without its doors, to the defendant's place of business. The defendant told the plaintiff that he could not perform the work without the doors. This was the first face-to-face contact between the plaintiff and the defendant. The defendant did not provide the plaintiff a written estimate.
The plaintiff later returned with the refrigerator doors, and the defendant said he would try to complete the work within the next two days. The plaintiff went to the defendant's place of business two days later. The defendant was not there, but his daughter informed the plaintiff that the service had been completed and the charge would be $72 plus tax. The plaintiff refused to pay, and the daughter would not allow the plaintiff to take the refrigerator.
The plaintiff in Zindle then filed an action in the Akron, Ohio Municipal Court, seeking damages and attorney's fees for violation of the OCSPA. The defendant asserted a counterclaim for the value of the work he performed, and also sought attorney's fees. The matter proceeded to a bench trial. The trial court found for the defendant, and awarded him $72 in damages and $800 in attorney's fees.
On appeal, the plaintiff challenged the trial court's alternative findings that no violation of the OCSPA had occurred, or, if a violation had occurred it was due to a bona fide error. The appellate court in Zindle first addressed whether an OCSPA violation had occurred. The court found that the record showed that the defendant had violated two provisions of the OAC. First, the defendant failed to provide the plaintiff at their first face-to-face meeting a written form informing the plaintiff of, inter alia, the anticipated date of completion of the repair and the anticipated cost. Zindle, 1987 WL 16660, at *4 (citing OAC § 109:4-3-05(A)(1)). Second, the defendant failed to post a sign providing the plaintiff notice that he had the right to a written estimate. Id. (citing OAC
Id. The court of appeals next considered whether the violations were the result of a bona fide error. Id. at *4-5. The bona fide error defense is set forth in Ohio Rev.Code § 1345.11(A), which provides:
Id. The court of appeals in Zindle found that substantial evidence supported the trial court's alternative findings of bona fide error and no damages. Accordingly, the appellate court affirmed the trial court's holding that the plaintiff was not entitled to damages under the OCSPA. 1987 WL 16660, at *5.
Inasmuch as the appellate court in Zindle agreed with the trial court's alternative holding, the appellate court need not have reached the issue whether the OCSPA was not violated. That is, the court of appeals could have assumed a violation without specifically finding one. As a result, its comments on that issue are obiter dicta.
In this diversity case, the Court must apply the substantive law of the forum state. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). In doing so, this Court is bound by the decisions of the state's highest court. Pennington v. State Farm Mut. Auto. Ins. Co., 553 F.3d 447, 450 (6th Cir.2009). If the state's highest court has not directly addressed the issue, however, this Court must predict how the state's highest court would resolve the matter. Andrews v. Columbia Gas Transmission Corp., 544 F.3d 618, 624 (6th Cir.2008). In that case, the decisions of the state's intermediate appellate courts are deemed authoritative, unless there is a strong showing that the state's highest court would reach a different result. Id.
Neither side in this conflict cites controlling decisions by the Ohio Supreme Court. Two reported Ohio appellate decisions cited by defendants indicate that where a consumer could not have been deceived by the supplier's alleged conduct, the supplier cannot be held liable under the OCSPA. See Chesnut, 166 Ohio App.3d at 308, 850 N.E.2d 751; Crull, 36 Ohio App.3d at 158, 521 N.E.2d 1099; accord Davis, 2003 WL 194888, at *2-3. As Crull demonstrates, this rule applies even when, as in the instant case, the consumer asserts a violation of a rule promulgated by the Ohio Attorney General pursuant to Ohio Rev. Code § 1345.05(B)(2). See 36 Ohio App.3d at 158, 521 N.E.2d 1099. Significantly, the fact that the consumers could not have been deceived was pivotal in both Chesnut and Crull.
The only conflicting Ohio authority cited by Ferron is in the form of obiter dicta in an unreported decision. Presumably, had the court of appeals in Zindle not upheld the bona fide error defense, the consumer who had stiffed the repairman for $72 would have been rewarded with $400 in statutory damages under the OCSPA, even though he could not have been deceived. The dicta in Zindle runs counter to principles of substantial justice and common
Chesnut and Crull represent a reasonable limitation on the reach of the OCSPA.
Here, the record is replete with uncontroverted evidence that Ferron could not have been deceived by the subject email advertisements. Ferron, a practicing attorney, does not allege that he was deceived; rather, he argues it makes no legal difference that he was not. Indeed, Ferron acted purposely to receive the email advertisements he challenges so that he could file this lawsuit. Under Chesnut and Crull, Ferron cannot succeed on his OCSPA claims. Accordingly, defendants are entitled to summary judgment in their favor as a matter of law on Ferron's OCSPA claims.
In closing, the Court notes that substantial resources have been expended in this case by the Court and the parties. The parties have been actively litigating this action for more than three years. At last count, 360 documents have been filed in this case. This case has required the undersigned Judge, as well as the Magistrate Judge, to issue numerous lengthy and detailed opinions and orders. To put it bluntly, this case has demanded an inordinate amount of the Court's limited resources. And these resources have been expended not so much to determine whether a compensable civil wrong has occurred—clearly no civil wrong has occurred here—but rather for the sake of adjudicating Ferron's calculated scheme to diversify his income stream. Even construing the OCSPA in the broadest manner, attorney Ferron's manufactured claims in this case ought not to prevail. See Burdge v. Supervalu Holdings, Inc., No. C-060194, 2007 WL 865483, at *5 (Ohio Ct.App. 1 Dist., Mar. 23, 2007) (In a case in which Ferron represented the plaintiff, the court of appeals affirmed the trial court's imposition of sanctions against him, stating, "We are offended by the contrived nature of this frivolous action, which has wasted much time, paper, and other resources to the prejudice of legitimate disputes between parties, especially those involving the consumer-protection laws of Ohio.").
As defendants correctly point out, the Court has already ruled that Ferron's EMAA claims are preempted.
Based on the above, the Court
The Court also
The Clerk shall remove this case from the Court's Civil Justice Reform Act report.
