The Kentucky Court of Appeals recently issued a significant ruling in the case of Scott O'Loughlin, Individually and on Behalf of All Others Similarly Situated v. Dave's Towing Service, Inc. (2025-CA-0782). The court's decision vacated a lower court's ruling that had previously favored vehicle owners in a class action lawsuit against the towing company. This ruling affects many individuals who have had their vehicles towed in violation of local ordinances.

In this case, Scott O'Loughlin and Stefan Gearhart, representing a class of vehicle owners, alleged that Dave's Towing Service violated Louisville Metro's Private Towing Ordinance and the Kentucky Consumer Protection Act (KCPA). The court's ruling is crucial because it addresses consumer rights and the legal boundaries of towing practices in Kentucky.

Background

The dispute began when O'Loughlin's vehicle was towed from his condominium complex in Louisville on June 11, 2017. He was informed by a neighbor that his car was being towed. When he approached the towing driver, he was told he could retrieve his vehicle for a cash payment of $75, which he could not provide at that moment. His vehicle was subsequently impounded, and he eventually paid $213 to retrieve it.

Similarly, Gearhart had his vehicle towed from a nearby bar on August 19, 2017. He was also told he could only pay in cash to retrieve his vehicle, leading him to withdraw cash from an ATM to pay the impound fee of $138. Following these incidents, O'Loughlin and Gearhart filed a complaint against Dave's Towing on October 16, 2017, claiming the towing company had violated the ordinance by failing to obtain proper authorization and refusing to accept credit card payments.

The case was initially filed in the Jefferson Circuit Court, where it underwent years of litigation, including attempts to certify a class of affected vehicle owners. The trial court eventually certified the class, allowing O'Loughlin and Gearhart to represent others who had similar experiences with Dave's Towing.

The Ruling

On October 30, 2026, the Kentucky Court of Appeals ruled that the Jefferson Circuit Court had acted without authority when it granted a directed verdict in favor of the vehicle owners. The court found that the trial court lacked subject-matter jurisdiction under the KCPA because the vehicle owners did not purchase services from Dave's Towing. The court stated, "the Trial Court lacked subject-matter jurisdiction under the KCPA and Kentucky Constitution, because Vehicle Owners did not purchase or consume services from Dave’s Towing and failed to meet the jurisdictional prerequisite for damages."

The ruling effectively vacated the trial court's earlier decisions, including the directed verdicts and judgments issued in favor of the vehicle owners. The judges involved in the ruling included Eckerle, Cetrulo, and Moynahan.

Impact

This ruling has significant implications for vehicle owners in Kentucky and the towing industry. It clarifies the legal standards for consumer protection claims under the KCPA, particularly regarding what constitutes a purchase of services. The court's decision indicates that individuals who have their vehicles towed may not have the same protections under consumer law if they did not engage in a voluntary transaction for services.

The ruling may also deter future class action lawsuits against towing companies based on similar claims. It sets a precedent that could limit the ability of consumers to seek damages for alleged violations of towing ordinances unless they can demonstrate a direct purchase of services from the towing company.

What's Next

Following this ruling, it is unclear whether the vehicle owners will seek to appeal the decision to a higher court. The court's ruling leaves open the possibility for further legal action, but details were not available in the court filing regarding any pending appeals or related cases.