Link to Ohio’s Westfield v. Galatis test for overruling precedent Ohio’s Westfield v. Galatis test for overruling precedent
Nearly 25 years ago, the Westfield Ins. Co. v. Galatis decision established the Ohio Supreme Court’s three-part test for overruling its own precedent. This is an essential framework for understanding Ohio appellate law. In Galatis, the court emphasized that stare decisis remains the “bedrock of the American judicial system,” ensuring stability and predictability in the law.
Drawing on a disciplined approach developed by the Michigan Supreme Court, the court adopted a modified version of that test to guide when prior decisions may be set aside, saying:
A prior decision of the Supreme Court may be overruled where (1) the decision was wrongly decided at that time, or changes in circumstances no longer justify continued adherence to the decision, (2) the decision defies practical workability and (3) abandoning the precedent would not create an undue hardship for those who have relied upon it.
Westfield itself remains good law. According to LEXIS, it has been cited more than 1,000 times in reported decisions – 130 times by the Ohio Supreme Court alone. Dissenting Justices have gone as far as to complain that overruling precedent without considering the Westfield factors “is an attack on the rule of law.”
Link to But Galatis is not the only pathway around negative precedent But Galatis is not the only pathway around negative precedent
As former Justice French explained in her 2020 opinion in State v. Henderson, however, the Ohio Supreme Court has not actually applied the Galatis test in all cases after Galatis in which it has overruled a prior decision. She noted:
We have said that [Galatis] applies when we consider overruling precedent on substantive law, and that it is most helpful in cases involving contract, property, and tort principles. In cases in which we overrule a prior decision regarding procedural rules, evidentiary rules, or constitutional questions though, we have declared the Galatis test unnecessary. And in some cases, we have simply overruled one of our prior decisions without mentioning the Galatis test at all.
Asserting an alternative to the Westfield test, Justice French posited in Henderson that “when adherence to our precedent is unfair and creates doubt and confusion over certainty, we are not constrained to follow that precedent.”
Link to Another precedent-busting technique – legislative activity and “uncodified law” expressly modifying the common law Another precedent-busting technique – legislative activity and “uncodified law” expressly modifying the common law
A recent Ohio Supreme Court decision illustrates that, in addition to the limitations on Galatis described by Justice French in Henderson, there is yet another way – without applying the Galatis factors – for litigants to persuade the Ohio Supreme Court to disregard its own precedent; that is, when the General Assembly has made its wishes about that precedent known by amending relevant statutes and mentioning the precedent in uncodified law.
In February, the court issued a unanimous opinion in Eddy v. Farmers Property Casualty Ins. Co. The case involved coverage for a car accident. Melissa and Alexis Eddy were not at fault. So, the other driver’s insurer paid them $100,000 but the Eddys sought additional UIM coverage from their own insurer, Farmers. Although the Eddys wanted $150,000 from Farmers, Farmers only offered $33,312, so the Eddys sued Farmers for breach of contract (without at that point making any bad-faith allegation against Farmers). Ultimately, Farmers agreed to pay the Eddys the $150,000 they had demanded, saying that it agreed to the settlement after being presented with additional information about Melissa’s injuries. The Eddys, though, filed a new lawsuit against Farmers, alleging bad faith by Farmers in handling their claim.
During discovery in the bad-faith case, the Eddys wanted to see the entire Farmers claim file. Farmers produced most of it but refused to produce documents between the date the Eddys filed their coverage suit and the date Farmers issued its $150,000 settlement check. Farmers asserted privilege and work product over documents within that date range. After the Eddys filed a motion to compel, the trial court granted it, without inspecting the disputed information in camera.
When the case reached the Ohio Supreme Court, the court had to grapple with its own precedent in Boone v. Vanliner, in which the court had held that “[i]n an action alleging bad faith denial of insurance coverage, the insured is entitled to discover claims file materials containing attorney-client communications related to the issue of coverage that were created prior to the denial of coverage.” Like many other decisions from that period of Ohio Supreme Court history, the majority opinion in Boone garnered dissents from former Justices Moyer, Cook and Stratton.
In Eddy, quoting Justice Cook’s dissenting opinion in Boone, Justice DeWine noted that Boone had created a potentially massive exception to the attorney-client privilege based solely upon an insured’s mere allegation of bad faith by the insurer. Justice DeWine also noted that a respected insurance treatise – Appleman – characterized Boone as “astonishingly wrong.”
What the Eddy court found dispositive about Boone, though, was not the criticism of dissenting justices or commentators; nor did the Eddy court mention, much less apply, the venerable Galatis test to justify overruling its own precedent in Boone. Instead, the unanimous Eddy court recognized that Boone had been abrogated by post-Boone amendments that the General Assembly made to Ohio’s privilege statute, accompanied by uncodified law expressly acknowledging the General Assembly’s intent to modify the “common law established in [Boone].”
Like the Appleman’s treatise, the General Assembly clearly did not like Boone and modified the statutory attorney-client privilege in R.C. 2317.02 to specifically explain the more limited circumstances under which the privilege may not apply in bad-faith claims against insurers. Instead of piercing the privilege via a mere “allegation” of bad faith, per the Boone syllabus, the party seeking disclosure must per the amended privilege statute (and now Eddy) make a prima-facie showing of bad faith, fraud or criminal misconduct by the insurer and the trial court must then inspect the allegedly privileged communications in camera. That is what the Eddy court’s mandate instructs the trial court to do on remand.
Link to There is more than one way to skin a cat (or to avoid unhelpful precedent) There is more than one way to skin a cat (or to avoid unhelpful precedent)
Summing up Galatis, Henderson and now Eddy, if you are up against unhelpful Ohio Supreme Court precedent in your case, there are several potential routes to consider. As Justice French explained in Henderson, if you are trying to overrule precedent on substantive law – particularly in a contract, property, or tort case – your best bet is to convince the court that you win the Galatis factors. Otherwise, as Justice French herself did in Henderson, you can try to make a compelling argument that the unhelpful precedent is unfair and “creates doubt and confusion over certainty.” Or, as the court’s recent Eddy decision confirms, if you are litigating in a context where there is applicable statutory law, look carefully for signals of the General Assembly’s intent – even in uncodified law that may specifically express disagreement with the unhelpful precedent you are trying to avoid.