Background
Scott O’Loughlin and Stefan Gearhart sued Dave’s Towing Service individually and on behalf of a certified class after paying fees to recover vehicles towed from private parking lots. They alleged that Dave’s Towing violated Louisville Metro’s Private Towing Ordinance by, among other things, failing to obtain contemporaneous written authorization for specific tows and refusing to accept credit cards. They also alleged that the conduct violated the Kentucky Consumer Protection Act.
After a jury trial began, the Jefferson Circuit Court directed a verdict against the vehicle owners on their consumer-protection claims because they had not purchased goods or services from Dave’s Towing. The court nevertheless concluded that it retained jurisdiction over the ordinance claims. It ultimately directed a verdict for Dave’s Towing on the unnamed class members’ claims for insufficient proof that the vehicles had been towed from private property, while separately awarding O’Loughlin and Gearhart their individual towing fees. The vehicle owners appealed, and Dave’s Towing cross-appealed.
The Court’s Holding
The Court of Appeals held that the Kentucky Consumer Protection Act did not apply because the vehicle owners’ payment of impound fees did not constitute a direct consumer transaction with Dave’s Towing. The pleadings alleged no purchase or lease of consumer goods or services, contractual privity, or other consumer relationship. Characterizing the fees as compelled purchases could not bring the claims within the Act or independently establish circuit-court jurisdiction.
The towing ordinance authorized recovery of amounts actually paid for towing, transportation, and storage, but required suit in a court of competent jurisdiction and did not itself confer jurisdiction. Because no individual plaintiff alleged damages exceeding Kentucky’s $5,000 circuit-court threshold, and class members’ claims could not be aggregated to satisfy that threshold, the circuit court lacked subject-matter jurisdiction from the litigation’s inception. Its rulings, verdicts, awards, and judgments therefore were void.
The Court of Appeals vacated both the directed verdict for Dave’s Towing on the class-wide claims and the award of individual damages to O’Loughlin and Gearhart. It remanded with instructions for the circuit court to transfer the case to district court, which must determine the viability of the remaining claims.
Key Takeaways
- Motorists who pay fees to recover involuntarily towed vehicles do not thereby purchase towing services within the meaning of the Kentucky Consumer Protection Act.
- A meritless consumer-protection claim cannot create circuit-court jurisdiction, and class members may not aggregate separate claims to meet the amount-in-controversy requirement.
- Because each identified ordinance claim fell below $5,000, the proper forum was district court, and the circuit court’s orders had to be vacated.
Why It Matters
The decision underscores that class certification does not cure a court’s lack of subject-matter jurisdiction. Kentucky litigants must establish jurisdiction from the complaint’s allegations, including a legally viable statutory claim or at least one individual claim satisfying the applicable monetary threshold.
The ruling does not decide whether the vehicle owners can ultimately recover for violations of Louisville’s towing ordinance. It sends those remaining claims to district court for consideration in the forum possessing jurisdiction.