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Pietro Cristino et al. v. Administrator, Ohio Bureau of Workers' Compensation, et al., Case no. 2007-0152
8th District Court of Appeals (Cuyahoga County)
State ex rel. General Motors Corporation v. Industrial Commission of Ohio et al., Case no. 2007-0210
10th District Court of Appeals (Franklin County)
Michael Dworning v. City of Euclid et al., Case no. 2007-0307
8th District Court of Appeals (Cuyahoga County)
Kenneth C. Hageman v. Southwest General Health Center et al., Case no. 2007-0376
8th District Court of Appeals (Cuyahoga County)
Elyria Foundry Company v. The Public Utilities Commission of Ohio, Case no. 2007-0860
Pietro Cristino et al. v. Administrator, Ohio Bureau of Workers' Compensation, et al., Case no. 2007-0152
8th District Court of Appeals (Cuyahoga County)
ISSUE: Is a class action lawsuit seeking recovery from the state for alleged deliberate underpayment of lump-sum workers' compensation settlements a suit seeking “equitable relief” that may be brought in a common pleas court, or is such a suit a claim for “money damages” that may only be brought in the Ohio Court of Claims?
BACKGROUND: Pietro Cristino and hundreds of other disabled workers have filed a class action lawsuit against the state. The plaintiffs, each of whom was qualified to receive lifetime benefits from the Bureau of Workers' Compensation (BWC) based on an award of permanent total disability, each accepted a single lump-sum payment from the bureau in lieu of a lifetime stream of monthly disability benefits. Their complaint alleges that, in calculating the amount of a lump-sum payment proffered to each claimant as the “present value” of his or her lifetime benefits, the bureau determined the actual present value of the claimant's benefits, but subtracted an undisclosed 30 percent discount from the amounts it paid to the claimants. The complaint also alleges that in calculating the proffered “present value” of claimants' benefits, the bureau utilized outdated mortality tables that understated claimants' life expectancy.
The Cuyahoga County Court of Common Pleas initially granted a motion by the state to dismiss the plaintiff's suit based on a lack of subject matter jurisdiction. The 8th District Court of Appeals affirmed the trial court's ruling that the recovery the plaintiffs sought from the state was an “award of money damages,” and that suits seeking money damages from the state may only be brought in the Ohio Court of Claims. Cristino and his fellow plaintiffs appealed the 8th District's ruling to the Supreme Court, which accepted the case. In 2004, the Supreme Court held in a similar case, Santos v. BWC, that a claimant's attempt to recover benefits that had been underpaid by the state was not a claim for “money damages,” but was rather a claim seeking “equitable relief” that could be heard in a common pleas court. The Supreme Court then issued a one-sentence decision in Cristino's case in which it reversed the 8th District's judgment “on the basis of Santos v. BWC ” and remanded the plaintiffs' complaint to the trial court for further proceedings.
The state subsequently entered new motions to dismiss the case based on lack of jurisdiction by the common pleas court. Those motions were overruled by both the trial court and the 8th District. The state appealed the 8th District's ruling on its new motions, and the Supreme Court has agreed to hear its appeal.
In the current appeal, the state asserts that the recovery sought by Cristino and the other claimants in this case is different from the recovery sought in Santos, and argues that the lower courts erred in ruling that the Cristino suit seeks only “equitable relief” and therefore can be tried in common pleas court. They point out that the plaintiff in Santos had been improperly required to remit monies he had received from a private insurance settlement to the BWC as repayment of workers' compensation benefits he had received from the state for the same injuries. They contend that the Supreme Court's “equitable relief” holding in Santos applies only to cases in which a plaintiff seeks a refund of money that was in a plaintiff's custody and that the state improperly took from him. In this case, they assert, the plaintiffs were never in possession of the money that they are trying to obtain through their lawsuit, but are rather trying to obtain additional “money damages” in excess of the lump sums they received from BWC based on claims that the state acted fraudulently and violated its fiduciary duties in underpaying their lump sum settlements. They argue that these claims allege tortious conduct, and that tort claims against the state seeking money damages may only be brought in the Court of Claims.
Attorneys for Cristino and the other plaintiffs argue that the Supreme Court's 2004 ruling decided the jurisdiction issue in this case “on the basis of Santos,” and Santos has already established that the remedies sought by the plaintiffs are equitable in nature and therefore may be pursued in common pleas court. They assert that there is nothing in the Santos decision and no other case law to support the state's contention that a remedy is equitable in nature only if the plaintiff first had custody of the claimed funds. They urge the Court to affirm that, because Cristino and the other plaintiffs ask only that the state disgorge the amounts that it improperly withheld from their lump-sum settlements, and do not ask for interest or other damages in excess of those amounts, their complaint is equitable and may be heard by the common pleas court.
Contacts
Stephen P. Carney, 614.466.8980, for
the Ohio Bureau of Workers' Compensation.
Paul W. Flowers, 216.344.9393, for Pietro Cristino et al.
State ex rel. General Motors Corporation v. Industrial Commission of Ohio et al., Case no. 2007-0210
10th District Court of Appeals (Franklin County)
ISSUE: Under Ohio's workers' compensation laws, when a self-insured employer disputes an injured employee's claim for temporary total disability, the employer is required to pay the employee taxable “sickness and accident” (S&A) insurance benefits, from which normal payroll deductions are withheld, while the claim is reviewed by the Industrial Commission. If the claim is subsequently allowed by the Industrial Commission, the employer is required to pay the employee a higher non-taxable weekly benefit, from which no payroll deductions are made, retroactive to the date of injury. In compensating the employee for the difference between the S&A payments he received while his claim was disputed and the full benefits to which he was entitled for that period, the employer is allowed to subtract the actual amounts it paid in insurance benefits. In this case, an employer (General Motors) claims that it was entitled to subtract from the “catch-up” payment it owed to an injured worker not only the amounts that were paid to the employee in S&A insurance, but also the payroll deductions the employer withheld from those insurance payments.
BACKGROUND: The Industrial Commission ordered General Motors to pay its injured worker, Chester Stephan, the full difference between the S&A insurance payments that were made to him while his claim was being reviewed and the amount of temporary total disability (TTD) benefits for which the commission found him eligible, without deducting any amounts GM had withheld from his S&A checks for payroll deductions. GM filed suit in the Franklin County Court of Common Pleas seeking a writ of mandamus ordering the commission to allow an offset of the payroll deductions as well as the insurance payments that were actually made to Stephan. The trial court denied the requested writ. GM appealed, and the 10th District Court of Appeals reversed, holding that the language of the applicable state law entitles an employer to offset all amounts that it paid to or on behalf of its injured employee for S&A insurance while a disputed workers' compensation claim was under review.
Stephan and the Industrial Commission now ask the Supreme Court to overturn the 10th District's ruling. They note that, until recently, when GM disputed a workers' compensation claim, it placed all payroll deductions withheld from an employee's S&A benefit checks in an escrow account pending resolution of the dispute, and immediately forwarded that money to the employee if his or her TTD claim was approved by the commission. If GM's change in accounting practices is affirmed, they assert, injured workers will be forced to wait months for uncertain tax refunds rather than immediately receiving full, tax-free benefits sufficient to replace their lost wages while they recover, as the legislature intended.
They argue that: 1) A writ of mandamus is not the appropriate remedy in this case because GM could have obtained the relief it sought through a declaratory judgment action; 2) The Industrial Commission's decision in favor of Stephan is entitled to a strong presumption of validity and GM did not meet the burden of proof necessary to overcome that presumption; and 3) The provision of state law at issue is ambiguous, and courts must interpret any provision of a workers' compensation statute found to be ambiguous in the manner most favorable to injured workers.
Attorneys for GM argue that the language of the applicable statute is not ambiguous, and plainly entitles an employer to offset against TTD payments all amounts the employer has expended in providing S&A insurance benefits to an injured employee while a disputed claim was under review. Because S&A benefits are taxable and an employer is required by law to withhold payroll taxes from an employee's insurance checks, they assert, the Industrial Commission clearly abused its discretion in barring GM from offsetting those amounts against the TTD benefits payable to Stephan. They note that Stephan and other injured workers can obtain refunds for any excess payroll taxes an employer has forwarded to taxing authorities on their behalf, and they contend that allowing workers to recover those funds immediately from their employer could result in an unfair “double recovery.”
Contacts
Elise Porter, 614.466.2872, for
the Industrial Commission of Ohio.
Stephen Mindzak, 614.221.1125, for Chester Stephan.
Bradley Sinnott, 614.464.8278, for General Motors Corporation.
Michael Dworning v. City of Euclid et al., Case no. 2007-0307
8th District Court of Appeals (Cuyahoga County)
ISSUE: Is a public employee who has administrative remedies available to him required to exhaust those remedies before filing a private disability discrimination action?
BACKGROUND: Michael Dworning was the city of Euclid's fire chief until March 2004 when he either retired or was terminated. The exact reason for Dworning's departure is disputed, as the city contends he retired and Dworning claims he was forced to quit. Dworning did not pursue the administrative appeal process prescribed in Euclid 's city charter for workers to appeal negative employment actions taken against them to the city civil service commission.
In October 2004, Dworning filed suit against the city in the Cuyahoga County Court of Common Pleas alleging that he had been discharged because of a disability – alcoholism – in violation of anti-discrimination provisions of the Ohio Civil Rights Act ( R.C. Chapter 4112). Euclid filed a motion for summary judgment, asserting that Dworning and other city employees were legally barred from pursuing a civil lawsuit against the city arising from an employment action if they had not first completed the administrative appeal procedures set forth in the city charter. The trial court granted the city's motion and dismissed Dworning's civil rights claim based on his failure to exhaust the available administrative remedies. Dworning appealed, and the 8th District Court of Appeals reversed the trial court's ruling. The court of appeals cited two prior decisions of the Supreme Court of Ohio, Elek v. Huntington Natl. Bank (1991) and Smith v. Friendship Village of Dublin (2001), which it interpreted as holding that discrimination claims asserted under R.C. Chapter 4112 may be pursued in state courts regardless of whether the plaintiff has first exhausted other available administrative remedies.
Attorneys for Euclid now ask the Supreme Court to overrule the 8th District and reinstate the trial court's summary judgment in its favor. They argue that the appeals court misinterpreted and misapplied this Court's rulings in Elek and Smith, which they say held only that a claimant need not exhaust the administrative remedies available through the Ohio Civil Rights Commission before filing a discrimination suit under R.C. Chapter 4112. They assert that the 8th District's ruling in this case conflicts with decisions in three other court of appeals districts holding that public employees covered by civil service appeals processes may not sue their employers under R.C. 4112 without first exhausting their available administrative remedies. They urge the Court to follow its 1990 decision in Nemazee v. Mt. Sinai Medical Ctr., which they say upheld the application of the judicial exhaustion doctrine in discrimination cases on the basis that it gives public employers the ability to correct their own errors, provides a factual record that can later be relied on by a trial court if private litigation proves necessary, and promotes judicial economy through the resolution of these disputes without the premature need for judicial intervention.
Attorneys for Dworning urge the Court to affirm the ruling of the 8th District and allow his discrimination suit against the city to go forward. They point to language in R.C. Chapter 4112 expressing the legislature's intent that the anti-discrimination protections of that statute be “liberally construed” and that those protections take precedence over “any law inconsistent with any provision of this chapter.” By requiring Dworning and other public employees to go through an extended civil service commission appeal of a negative employment action before they may file suit under the civil rights statute, they assert, the doctrine of judicial exhaustion conflicts with an employee's right to speedy prosecution of discrimination claims and to a full range of recovery. Dworning notes that, unlike civil service appeals that can only grant reinstatement with back pay, the legislature has made a much wider range of compensatory and punitive damages available to successful plaintiffs in private lawsuits filed under the civil rights statute.
Contacts
Christopher P. Thorman, 216.621.9767, for
Michael Dworning.
Richard A. Millisor, 440.838.8800, for the City of Euclid.
Kenneth C. Hageman v. Southwest General Health Center et al., Case no. 2007-0376
8th District Court of Appeals (Cuyahoga County)
ISSUE: Can an attorney who has properly obtained a non-client's confidential mental-health records in connection with a divorce action be liable for civil damages for the unauthorized disclosure of those records to a prosecuting attorney for use against the non-client in a criminal proceeding?
BACKGROUND: In 2003, Kenneth Hageman and his then-wife, Janice Galehouse-Hageman, were going through a divorce and child custody dispute when he was charged with aggravated vehicular assault for allegedly running into her with his truck. The attorney for Hageman's wife, Barbara A. Belovich, who had subpoenaed confidential mental-health records from Mr. Hageman's doctors in connection with the divorce action, subsequently provided those records to the Cuyahoga County prosecutor's office without Mr. Hageman's consent for use in the criminal case against him.
Hageman sued for damages for the unauthorized release of his records, naming his doctors, his wife, Belovich and Southwest General Health Center as defendants. The Cuyahoga County Court of Common Pleas granted summary judgment in favor of all of the defendants, holding that when he filed suit to obtain custody of his daughter, Hageman had waived the confidentiality of his health records. Hageman appealed. The 8th District Court of Appeals affirmed the trial court's awards of summary judgment to all of the defendants except Belovich, but remanded Hageman's claim against Belovich to the trial court for further proceedings. The appellate panel ruled that Belovich had “overstepped her bounds as Galehouse's divorce attorney” and exposed herself to civil liability when she provided confidential medical records obtained in the divorce case to the prosecutor in a different case.
Belovich has appealed the 8th District's ruling to the Supreme Court. She argues that a Supreme Court decision cited by the court of appeals, Biddle v. Warren General Hospital (1999) recognized a cause of action only against medical service providers who improperly disclose health care records to a third party, and should not be expanded to impose liability on an attorney who lawfully obtained those records. She argues that the records that she provided to the prosecutor were no longer privileged because Hageman had waived their confidentiality and had and not sought a protective order to prevent them from becoming part of the public record of his divorce case. She also asserts that the criminal prosecution of Hageman for vehicular assault was not a “separate legal matter” unrelated to the divorce and custody disputes for which she had properly obtained the medical records, but was a direct result of his actions toward her client arising from those cases.
Hageman argues that the 8th District correctly held that the Biddle decision protects patients against the unauthorized disclosure of their non-public medical records by anyone, including a third party who obtained the information for a permissible purpose but who disseminates it to others without the consent of the patient. He asserts that his waiver of confidentiality of his mental-health records was strictly limited to the divorce/child custody action in which that information was necessary to the court's decision-making process, and did not authorize Belovich to disseminate the records to the prosecutor for use against him in a separate criminal case that had no bearing on the outcome of the divorce action.
Contacts
Jacob A.H. Kronenberg, 216.426.2970, for
Barbara Belovich.
James E. Boulas, 440.526.8822, for Kenneth Hageman.
Elyria Foundry Company v. The Public Utilities Commission of Ohio, Case no. 2007-0860
ISSUE: Did the Public Utilities Commission of Ohio (PUCO) abuse its discretion by allowing an electric utility company to use an inflated cost-of-service formula as the basis for declaring an excessive number of “economic service interruptions” during which the company charged higher than standard “replacement” rates to its high-volume customers who had contracted for interruptible service?
BACKGROUND: The Elyria Foundry Company procures the electricity to run its plant from Ohio Edison, an electric utility company whose rates and business practices are regulated by the PUCO. Like a number of high-volume users of electricity, Elyria Foundry contracts with Ohio Edison to receive a significant portion of its day-to-day power supply at a discounted “interruptible” service rate. In exchange for lower everyday rates, utility customers purchasing interruptible service agree either to curtail their use of electricity or to pay higher-than-standard “replacement” rates for power they use during peak usage periods when a specified level of very high demand on the utility's generation capacity allows the utility to declare a “power interruption.”
In this case, Elyria Foundry filed a complaint with the PUCO alleging that Ohio Edison violated state and federal regulatory standards in 2005, when the utility declared power interruptions on 44 different days, during which it charged its interruptible service customers emergency “replacement” rates for a total of 642 hours of service. In the seven years prior to 2005, the utility had declared an average of four service interruptions per year. The PUCO denied the complaint, ruling that Ohio Edison had acted within regulatory guidelines in declaring the contested service interruptions and billing its interruptible service customers at replacement rates on those dates.
Elyria Foundry has exercised its right to appeal the PUCO's ruling to the Supreme Court. Attorneys for the foundry argue that the commission abused its discretion by allowing the utility to base its declarations of power interruption periods, and to set the rates it charged interruptible service customers for replacement power during those periods, on a flawed mathematical formula. They assert that the formula used by Ohio Edison and affirmed by the commission improperly took into consideration not only the peak power demands and procurement costs of Ohio Edison , but also reflected the power demands and costs of other utility companies that are owned by Ohio Edison's parent company, FirstEnergy Corporation. They note that all of FirstEnergy's Ohio affiliates procure power generation service through a joint purchasing entity known as FirstEnergy Solutions, and argue that the formula approved by the PUCO improperly allowed Ohio Edison to declare service interruptions and charge its customers emergency “power replacement” rates to replace power being consumed by the customers of other FirstEnergy utility companies serving other parts of the state.
Attorneys for Ohio Edison and the PUCO point out that, in reviewing the commission's rulings on rate and service disputes such as this one, the Court must begin with a presumption that a ruling is correct and may overrule the commission only if it finds that a decision was not supported by any credible evidence. In this case, they assert, the PUCO found no regulatory violation after carefully reviewing the complex terms and formulas that Ohio Edison was required to apply in declaring service interruptions and setting power replacement rates. They urge the Court to hold that the evidence and arguments advanced by Elyria Foundry in this case do not meet burden of proof required to overturn a ruling of the commission.
Contacts
Craig I. Smith, 216.561.9410, for
Elyria Foundry Company.
John H. Jones, 614.466.4395, for the Public Utilities Commission of Ohio.
These summaries are prepared by the Office of Public Information solely to help news reporters determine if they want to cover the arguments. The summaries are not part of the case record and are not considered by the Court at any point during its deliberations.
Parties interested in receiving additional information are encouraged to review the case file available in the Supreme Court Clerk's Office (614.387.9530), or to contact counsel of record.