Background
Scott O’Loughlin and Stefan Gearhart brought individual and class claims against Dave’s Towing Service after paying cash to recover vehicles towed from private parking lots in Louisville. They alleged that the company violated Louisville Metro’s Private Towing Ordinance by, among other things, failing to obtain contemporaneous written authorization for tows, refusing credit-card payments, and failing to provide continuous access to its storage yard. They also alleged violations of the Kentucky Consumer Protection Act.
The Jefferson Circuit Court certified a class and later ruled that Dave’s Towing violated the ordinance’s payment provisions. At trial, however, it directed a verdict against the vehicle owners on their consumer-protection claims because they had not purchased services from Dave’s Towing. It separately entered a directed verdict for Dave’s Towing on the unnamed class members’ claims for insufficient proof that the relevant vehicles had been towed from private property, while awarding O’Loughlin and Gearhart their individual towing fees.
The Court’s Holding
The Court of Appeals held that the Kentucky Consumer Protection Act did not apply because the vehicle owners had no direct consumer transaction, agreement, or contractual privity with Dave’s Towing. Characterizing involuntary towing and impound fees as compelled purchases did not bring the claims within the statute. Because the allegations on the face of the complaints did not describe a transaction governed by the Act, the consumer-protection claim could not supply circuit-court jurisdiction.
The towing ordinance created a right to recover actual losses but did not itself confer jurisdiction, authorize punitive damages or attorney’s fees, or permit class members to aggregate their claims to satisfy the circuit court’s amount-in-controversy requirement. No identified plaintiff had more than $5,000 at issue, so exclusive jurisdiction belonged in district court. The Court of Appeals therefore vacated the circuit court’s directed verdicts, damages awards, and judgments as void and remanded with directions to transfer the case to district court for consideration of any remaining viable claims.
Key Takeaways
- Payment of an involuntary towing or impound fee is not a consumer purchase covered by the Kentucky Consumer Protection Act when no direct transaction or contractual privity exists.
- A municipal ordinance authorizing actual damages in a court of competent jurisdiction does not independently confer subject-matter jurisdiction.
- Class members may not aggregate separate claims to satisfy Kentucky circuit court’s $5,000 amount-in-controversy requirement; without a qualifying individual claim, the case belongs in district court.
Why It Matters
The decision limits attempts to invoke Kentucky’s consumer-protection statute merely by labeling involuntary payments as purchases. A complaint must allege the kind of direct consumer transaction the statute covers; adding a legally inapplicable KCPA claim cannot manufacture circuit-court jurisdiction.
The opinion also emphasizes that jurisdiction must be established at the outset and that class certification cannot cure an insufficient amount in controversy. When the remaining claims fall within district court’s exclusive jurisdiction, the circuit court should transfer them rather than adjudicate them or leave the plaintiffs without a forum.