We recently showed that a suspension of micrometer-sized polystyrene (PS) particles in a PDMS liquid, mixed with small (1 wt %) amounts of a nanocage, sulfonated polyhedral oligomeric silsesquioxane (s-POSS), exhibited significant electrorheological (ER) behavior. This behavior was associated with the formation of a thin adsorbed layer of s-POSS onto the surfaces of PS and the subsequent formation of polarization-induced aggregates, or structures, responsible for the ER effect in an applied electric, E, field. Current theory suggests that the ER effect would largely be determined by the dielectric and conductive properties of the conductive layer of core/shell particles in ER suspensions. We show here that sulfonated-PS (s-PS)/PDMS suspensions exhibit further increases in the yield stress of over 200%, with the addition of s-POSS. The yield stress of this system, moreover, scales as τy [proportionality] E(2). The dielectric relaxation studies reveal the existence of a new relaxation peak in the s-POSS/s-PS/PDMS system that is absent in the s-POSS/PS/PDMS suspension. The relative sizes of these peaks are sensitive to the concentration of s-POSS and are associated with changes in the ER behavior. The properties of this class of ER fluids are not appropriately rationalized in terms of current theories.