The Sixth Circuit recently made it more difficult for plaintiffs to certify a class where individualized inquiries are needed to identify class members.
In Tarrify Properties LLC v. Cuyahoga County Ohio, 2022 WL 2128816 (6th Cir. June 14, 2022), the Sixth Circuit addressed a claim that Ohio’s tax-foreclosure statute operates as a taking under the federal and Ohio constitutions. The plaintiff in Tarrify owned delinquent property that was transferred to an authorized land bank, and plaintiff argued that the transfer—which prevented the owner of the delinquent property from recovering the difference between the value of the land and the tax liability—amounted to a taking. Plaintiff sought certification of a class of owners in which “the total value of [their] property exceeded the amount of the impositions on that property at the time the transfer occurred.” Id. at *2. The district court denied plaintiff’s motion for class certification, plaintiff appealed, and the Sixth Circuit affirmed.
Writing for the Court, Chief Judge Sutton had no trouble finding that issues with ascertainability, or the ability to identify each proposed class member, doomed certification. Id. at *3. Because a court would need to “ask whether a given property’s fair market value exceeds the taxes owed at the time of the transfer to determine who is in the class,” and because determining that fair market value “requires an independent and individualized assessment of each absent class member’s property,” determining who is in the class necessarily would require “an individualized, fact-intensive, and adversarial process” for each potential class member. Id. Further, and noting that the analysis of each Rule 23 requirement sometimes overlap, the Sixth Circuit also found that the individualized assessments necessary for determining fair market value also meant that predominance was lacking (because individualized questions about each property would dominate), as was superiority. Id. The Sixth Circuit reached this result even though plaintiff had pointed to a variety of evidence that could be used to determine the fair market value—such as county records or tax appraisals—because the court noted that those sources did not conclusively answer the question about what each property’s fair market value truly was.
Although Tarrify focused on the fair market value of land and property, its holding should be equally applicable to other cases concerning the fair market value of other unique goods and assets, and may also be generally applicable in cases that require a determination that is dependent on many different and possibly subjective factors. Following Tarrify, plaintiffs in putative class actions in the Sixth Circuit may have difficulty establishing ascertainability, predominance, and superiority where their cases require determining fair market value. Defendants in these cases should look for ways to argue that this determination will be a complex process that will turn on individualized considerations and circumstances.