Certification on Ohio’s Voluntary-Payment Defense: “Relevant Facts” and Conflicting Price Terms in Adhesion Contracts

1. Introduction

This Sixth Circuit decision is an Order of Certification to the Supreme Court of Ohio arising from long-running class litigation over Fifth Third Bank’s “Early Access” cash-advance program. The program advanced funds into customers’ checking accounts and, upon the next qualifying deposit (or after 35 days), repaid the advance plus a 10% “transaction fee.”

The contractual flashpoint was a price disclosure stating: “The transaction fee is $1 for every $10 borrowed. This equates to an Annual Percentage Rate (APR) of 120%.” Because the repayment date varied depending on when the next deposit arrived, most borrowers’ effective APR exceeded 120%. Plaintiffs pursued (i) an Ohio breach-of-contract theory—arguing that charging an APR higher than 120% breached the contract—and (ii) a federal disclosure theory under the Truth in Lending Act (TILA).

After a jury found a contract breach but also found the bank not liable due to Ohio’s voluntary-payment doctrine, the appeal turned on whether Fifth Third could invoke that equitable defense in a standardized consumer contract containing two potentially conflicting price terms (a flat 10% fee and a 120% APR representation). Concluding Ohio law is unsettled on what “relevant facts” means for voluntary payment—and on whether the defense is available in this recurring modern-contract scenario—the Sixth Circuit certified two questions to the Supreme Court of Ohio.

2. Summary of the Opinion

The court recounts the contractual ambiguity recognized in the earlier appeal (In re Fifth Third Cash Advance Litig.) and explains why the voluntary-payment issue is outcome determinative: if the defense is available and properly applied, the Sixth Circuit would affirm; if not, reversal and remand would follow (with the remedy potentially affected by Fifth Third’s protective cross-appeal).

Although the appellants raised multiple trial-error arguments (sufficiency of evidence, jury instructions, verdict form, and a post-verdict special interrogatory), the Sixth Circuit rejected them—assuming the voluntary-payment defense is legally available. The court’s central move is certification: Ohio precedent articulates the doctrine at a high level but does not provide controlling guidance for contemporary adhesion contracts with conflicting price terms and regulated disclosures.

3. Analysis

3.1 Precedents Cited

A. Federal doctrine shaping the certification decision

• Erie Railroad Co. v. Tompkins — Frames the baseline: federal courts in diversity apply state substantive law. The Sixth Circuit emphasizes the obligation to follow Ohio law, not to innovate it.
• Berk v. Choy — Cited for the modern statement of the Erie principle (and the Rules of Decision Act, 28 U.S.C. § 1652) reinforcing that state law controls.
• In re Nat'l Prescription Opiate Litig. — Provides the Sixth Circuit’s roadmap: where state law is unclear, courts often make an “Erie guess,” but certification is preferred when the law is genuinely unsettled and determinative.
• Lehman Bros. v. Schein — Supplies the Supreme Court’s admonition that when state law is unsettled, federal courts should avoid speculation and may certify.
• Am. Booksellers Found. for Free Expression v. Strickland and Planned Parenthood of Cincinnati Region v. Strickland — Support the Sixth Circuit’s practice of using certification to further “cooperative judicial federalism,” including sua sponte certification.
• Pennington v. State Farm Mut. Auto. Ins. Co. — Quoted for the “reasonably clear and principled course” standard: absent such a course, certification is warranted.
• Scott v. Bank One Tr. Co. — Used to highlight state sovereignty concerns and the value of allowing the Ohio Supreme Court to speak authoritatively on Ohio law.

B. Ohio voluntary-payment doctrine: Supreme Court of Ohio foundations

• State ex rel. Dickman v. Defenbacher — The canonical Ohio formulation: voluntary payment bars recovery absent “fraud, duress, compulsion or mistake of fact,” and a payment cannot be recovered merely because of a mistake of law about liability to pay. The Sixth Circuit treats Dickman as the doctrine’s core but recognizes its abstraction leaves modern application questions unanswered.
• City of Cincinnati v. Cincinnati Gaslight & Coke Co. — Characterizes payment made under a “wrong construction of the terms of a contract” as a mistake of law. This case pulls toward Fifth Third’s view (price-term misinterpretation as legal mistake), but the Sixth Circuit finds the analogy imperfect for standardized consumer disclosures with internally inconsistent terms.
• Vindicator Printing Co. v. State — Reinforces the equitable intuition: a party who chooses to pay amid a contractual construction dispute generally cannot later ask the law to rectify the mistake—even if the dispute would be resolved in the payer’s favor.
• Firestone Tire & Rubber Co. v. Cent. Nat'l Bank of Cleveland — Defines mistake of fact as a “mistaken supposition” about a specific fact entitling the other party to the money; also treated payments based on misleading bills of lading as factual mistake. This authority supports the plaintiffs’ framing (misleading disclosure = factual mistake), yet its commercial context differs substantially from consumer adhesion contracts.
• In re Kangesser — Noted as one of the last Ohio Supreme Court cases addressing voluntary payment, underscoring the temporal gap and the limited modern guidance from Ohio’s high court.
• Shelton v. Gill and Farm Bureau Mut. Auto. Ins. Co. v. Buckeye Union Cas. Co. — Cited for historical roots and equitable character of the doctrine (“principles of equity and natural justice”), emphasizing the doctrine’s development in a very different contracting era.

C. Ohio intermediate appellate authority: conflict and inconsistency

• City of Cleveland v. Ohio Bureau of Workers' Comp. (City of Cleveland I), rev'd on other grounds, City of Cleveland II — City of Cleveland I restates voluntary-payment doctrine (“full knowledge of the relevant facts”); City of Cleveland II is significant because the Ohio Supreme Court reversed on other grounds, leaving voluntary payment unresolved and continuing uncertainty.
• Consol. Mgmt., Inc. v. Handee Marts, Inc. — Provides a Black’s Law-like definition of mistake of fact, but also is invoked to show “overpayment of rent based on a miscalculation of the rent formula is a mistake of law.” The case thus cuts both ways and exemplifies why the Sixth Circuit sees no stable rule.
• Indus. Fabricators, Inc. v. Nat'l Cash Reg. Corp. — Suggests that “mistake as to the contract price” can be a mistake of law. Fifth Third uses this line to argue the class’s complaint is a legal mistake.
• Nationwide Life Ins. Co. v. Myers — Treats misreading the contract and paying the wrong estate as a mistake of law, again supporting the bank’s position.
• Lycan v. City of Cleveland, rev'd on other grounds, Lycan v. City of Cleveland (plurality opinion) — Noted because the Ohio Supreme Court again did not settle voluntary payment. The appellate decision treated misunderstanding legal obligation to pay parking fines as mistake of fact, illustrating doctrinal slippage.
• Case W. Rsrv. Univ. v. Friedman — University’s tax payment after selling property treated as mistake of fact, further demonstrating that “legal obligation” errors can be framed as factual mistakes in some contexts.

D. Prior and related litigation framing the contract dispute

• In re Fifth Third Cash Advance Litig. — The earlier Sixth Circuit decision holding the contract is facially ambiguous because it defined APR in conflicting ways; also distinguishing TILA and contract injuries and noting the APR calculation’s conflict with “expressed as a yearly rate.”
• JNT Props., LLC v. Keybank Nat'l Ass'n — Cited in Judge Larsen’s partial dissent to argue customers received the benefit of the bargain by paying the promised 10% fee; foreshadows the “which price term controls?” dispute that underlies voluntary payment.
• Small v. BOKF, N.A. — Cited to show similar litigation against other banks, situating this case in a broader pattern of APR/fee disclosure disputes.
• Arlington Video Prods., Inc. v. Fifth Third Bancorp — Cited for the proposition that pre-payment knowledge is the proper time of inquiry for voluntary payment, relevant to the plaintiffs’ challenge to post-suit evidence (though the Sixth Circuit notes the evidentiary ruling was not appealed).

3.2 Legal Reasoning

A. Why certification, and why now?

The Sixth Circuit frames the threshold choice: make an “Erie guess” or certify. It concludes Ohio’s voluntary-payment doctrine is not merely unclear but “point[s] in all directions,” particularly on the distinction between mistake of fact and mistake of law when the alleged error concerns price disclosures embedded in a standardized consumer contract.

Two aspects of the court’s reasoning are especially consequential:

• Modern-contract mismatch: The voluntary-payment doctrine developed in an era of individualized bargaining and equitable assumpsit principles. The court expresses doubt about transplanting those old categories into present-day adhesion contracts that can contain internally conflicting, regulatorily compelled disclosure terms.
• Outcome determinativeness: The court methodically rejects plaintiffs’ other appellate arguments (again, on the assumption the defense is available). That analysis is designed to satisfy Ohio Sup. Ct. R. Prac. 9.01(A): the certified questions “may be determinative of the proceeding.”

B. The doctrinal crux: What are “relevant facts” in voluntary payment?

Fifth Third’s position is that the class knew the operative facts: they knowingly paid the disclosed 10% fee, and any contrary belief about liability (or the legal effect of paying) is a mistake of law. Plaintiffs’ position is that they lacked full knowledge because the APR representation was misleading; thus their payments were made under mistake of fact (or at least not with “full knowledge of the relevant facts”).

The Sixth Circuit identifies the precise doctrinal ambiguity that matters for modern fee/APR disputes:

• If “relevant facts” means knowledge of the actual economic cost expressed as APR (or knowledge that the contract’s APR representation is false in practice), plaintiffs look closer to a mistake-of-fact exception.
• If “relevant facts” means knowledge of the charged fee (the 10% transaction fee) regardless of how APR would be computed over variable repayment periods, plaintiffs’ grievance looks like a legal mistake about contractual meaning or legal liability—potentially triggering the voluntary-payment bar.

Because Ohio authorities alternately treat price-formula misunderstandings as legal mistakes (City of Cincinnati v. Cincinnati Gaslight & Coke Co.; Consol. Mgmt., Inc. v. Handee Marts, Inc.) while treating some “no obligation to pay” errors as factual mistakes (Lycan v. City of Cleveland; Case W. Rsrv. Univ. v. Friedman), the Sixth Circuit cannot extract a coherent, principled Ohio rule for this specific consumer-contract configuration.

C. The second certified issue: conflicting price terms in contracts of adhesion

The court isolates a scenario it views as increasingly common: a standardized consumer contract includes two distinct price expressions that can point in different directions (here, a flat 10% fee and a 120% APR representation). This structure complicates the classic mistake-of-law/mistake-of-fact divide because the contract simultaneously discloses the fee (true) and the APR equivalence (often false in practice).

The Sixth Circuit does not decide whether the voluntary-payment doctrine should adapt—by narrowing its reach, broadening exceptions, or redefining “relevant facts”—but it signals that any answer will have system-wide effects in consumer finance and other mass-market contracting contexts. That recognition is a key justification for certification rather than federal judicial prediction.

3.3 Impact

A. Likely consequences in Ohio law (if and when answered)

How the Supreme Court of Ohio answers will likely shape:

• Consumer contract class actions: A broader voluntary-payment defense could bar restitution/damages for paid fees even where standardized disclosures mislead consumers about economic cost; a narrower defense (or an expansive “mistake of fact” conception) could increase exposure for banks and other mass-contracting firms.
• “Relevant facts” as an operational standard: A clarified definition may alter pleading, discovery, and trial strategy—particularly what defendants must prove about consumer knowledge and what plaintiffs must show about informational deficits.
• Adhesion contracts with regulated disclosures: The decision could influence how Ohio courts treat conflicts between nominal fees and annualized-rate disclosures, and more generally how they integrate regulatory disclosure frameworks into state-law equitable defenses.

B. Federal-state judicial relations

The order reinforces a practical Sixth Circuit approach: when Ohio law is genuinely unsettled and determinative, the federal court will certify—even sua sponte. That practice can reduce divergence between federal “Erie guesses” and later state-law developments, and it places interpretive primacy with the Ohio Supreme Court on a doctrine rooted in Ohio equity.

4. Complex Concepts Simplified

• APR (Annual Percentage Rate): A standardized yearly measure of borrowing cost. With a fixed fee and variable repayment timing, the effective APR changes depending on how quickly the loan is repaid (faster repayment can yield a higher APR).
• TILA (Truth in Lending Act): Federal law requiring certain credit disclosures. Here, it required an APR disclosure; the case also references rules requiring an “estimate” disclosure when terms are variable.
• Voluntary-payment doctrine: An equitable rule barring recovery of money voluntarily paid with full knowledge of relevant facts, unless exceptions apply (including fraud, duress, compulsion, or mistake of fact). The hard part is separating “mistake of fact” from “mistake of law.”
• Mistake of fact vs. mistake of law: Roughly, a factual mistake is being wrong about an underlying factual circumstance (e.g., believing a particular cost or entitlement exists when it does not), while a legal mistake is being wrong about the legal meaning/effect of known facts (e.g., misconstruing a contract’s legal implications).
• Erie guess: A federal court’s prediction of how a state supreme court would resolve an unresolved state-law issue.
• Certification: A process allowing a federal court to ask the state supreme court to answer specific questions of state law, producing authoritative guidance.

5. Conclusion

This Sixth Circuit order does not decide who wins the breach-of-contract claim; instead, it spotlights a doctrinal gap in Ohio law at the intersection of (i) the voluntary-payment defense, (ii) standardized consumer adhesion contracts, and (iii) pricing disclosures that may conflict (flat fee versus APR equivalence).

By certifying (1) how “relevant facts” are defined for purposes of the voluntary-payment defense and (2) whether the defense is available for contracts with two potentially conflicting price terms, the court places the decisive policy and doctrinal choices with the Supreme Court of Ohio. The answers will likely influence not only this high-stakes banking class action, but also the broader landscape of restitutionary and contract remedies in consumer finance disputes involving mass-market disclosures.