Stolz v. J&B Steel Erectors, Inc.

• Decision Date: 20 December 2018
• Docket Number: No. 2017-1245,2017-1245
• Citation: 155 Ohio St.3d 567,122 N.E.3d 1228,2018 Ohio 5088
• Parties: STOLZ v. J & B STEEL ERECTORS, INC., et al.
• Court: Ohio Supreme Court

155 Ohio St.3d 567

122 N.E.3d 1228

2018 Ohio 5088

STOLZ

v.J & B STEEL ERECTORS, INC., et al.

No. 2017-1245

Supreme Court of Ohio.

Submitted May 8, 2018

Decided December 20, 2018

Kohnen & Patton, L.L.P., Colleen M. Blandford, Cincinnati, and Jordan T. Steiner, for petitioner J & B Steel Erectors, Inc.

Patsfall, Yeager & Pflum, L.L.C., Susan M. Salyer, Stephen M. Yeager, and Stephen J. Patsfall, Cincinnati, for petitioners TriVersity Construction Co., L.L.C., and D.A.G. Construction Co., Inc.

Beckman Weil Shepardson, L.L.C., Stephanie M. Day, and Kristen M. Myers ; and Goodson & Company and Brett C. Goodson, Cincinnati, for respondent Daniel Stolz.

Michael DeWine, Attorney General, Eric E. Murphy, State Solicitor, and Michael J. Hendershot, Chief Deputy Solicitor, in support of petitioners for amicus curiae State of Ohio.

Green & Green Lawyers, L.P.A., Jane M. Lynch, and Jared A. Wagner, Dayton, in support of petitioners for amicus curiae Messer Construction Company.

DeWine, J.{¶ 1} Ohio law allows a general contractor on certain large construction projects to "self-insure" and provide workers' compensation coverage for its own employees and for the employees of subcontractors that enroll in the contractor's self-insurance program. An employee who is injured on the job may not pursue a negligence claim against the general contractor or an enrolled subcontractor but must instead seek compensation pursuant to Ohio's workers' compensation laws. In this case, which comes to us by way of a certified question from the United States District Court, we consider whether this scheme violates certain provisions of the Ohio Constitution. We conclude that it does not.

I. Background

{¶ 2} This is the second time in the same federal lawsuit that we have been called upon to answer a question about the contractor-self-insurance program. See Stolz v. J & B Steel Erectors, Inc. , 146 Ohio St.3d 281, 2016-Ohio-1567, 55 N.E.3d 1082, ¶ 3-8 (" Stolz I "). The district-court case arose from a workplace accident that occurred during construction of the Horseshoe Casino in Cincinnati.

Daniel Stolz was injured when a floor upon which he was working collapsed, causing him to fall some 25 feet. Stolz was employed as a concrete finisher for Jostin Construction, Inc. ("Jostin"). And Jostin was a subcontractor of Messer Construction Company ("Messer"), the general contractor for the project.

{¶ 3} Prior to the start of construction, Messer received permission from the Ohio Bureau of Workers' Compensation to act as the self-insuring employer on the project under R.C. 4123.35(O). Under the statute, Messer provided workers' compensation coverage on the project for its own employees as well as the employees of subcontractors like Jostin that chose to enroll in Messer's self-insurance plan ("enrolled subcontractors").

{¶ 4} After he was injured, Stolz sued Messer and several of the subcontractors for negligence. Messer and three of the enrolled subcontractors moved for summary judgment on the grounds that they are immune from liability under R.C. 4123.35(O)'s provisions concerning contractor self-insurance.

{¶ 5} The district court granted summary judgment to Messer, as the general contractor, but refused to extend immunity to the subcontractors. Following summary judgment, we accepted our first certified question of state law from the federal court. That question asked whether R.C. 4123.35 and 4123.74 provide immunity to enrolled subcontractors from tort claims brought by employees of other enrolled subcontractors. Stolz I , 146 Ohio St.3d 281, 2016-Ohio-1567, 55 N.E.3d 1082, at ¶ 8. We answered the question in the affirmative, concluding that the statutes "create a legal fiction that a self-insuring employer for a self-insured construction project is the single employer, for workers' compensation purposes, of all employees working for enrolled subcontractors on that project." Id. at ¶ 27.

{¶ 6} Back before the district court, Stolz amended his complaint to allege that R.C. 4123.35(O) violates various provisions of the United States and Ohio Constitutions. Once more, the enrolled subcontractors petitioned the district court to certify a question of state law to this court. Again, we accepted. The question is

"[w]hether Ohio [R.C.] 4123.35(O) is unconstitutional as applied to the tort claims of an enrolled subcontractor's employee who is injured while working on a self-insured construction project and whose injury is compensable under Ohio's workers' compensation laws."

(Brackets sic.) 151 Ohio St.3d 1451, 2017-Ohio-8842, 87 N.E.3d 220, quoting the district court's certification order.

II. Ohio's Workers' Compensation System and R.C. 4123.35(O)

{¶ 7} The Ohio Constitution authorizes the legislature to establish a state fund for the purpose of "providing compensation to workmen and their dependents, for death, injuries or occupational disease, occasioned in the course of such workmen's employment" and to require "compulsory contribution thereto" from employers. Ohio Constitution, Article II, Section 35. An employer that "pays the premium or compensation provided by law * * * shall not be liable to respond in damages at common law or by statute for such death, injuries or occupational disease." Id.

{¶ 8} The legislature established the Ohio workers' compensation system under this authority. See R.C. Chapter 4123. Most employers participate in the system by paying premiums into a state insurance fund that administers and pays out claims. R.C. 4123.35(A). The scheme also allows certain employers who possess "sufficient financial and administrative ability" to self-insure their workers' compensation obligations. R.C. 4123.35(B). These "self-insuring employer[s]" have the same immunity from liability as other employers but pay claims directly to injured employees and the dependents of deceased employees. Id.

{¶ 9} R.C. 4123.35(O) takes the self-insurance principle a step further. It allows the administrator of the workers' compensation system to grant a self-insuring employer the privilege of self-insuring certain large construction projects. The self-insuring employer may administer workers' compensation claims not only for its own employees but also for the employees of subcontractors enrolled in the plan. R.C. 4123.35(O). In return, the self-insuring employer gains protection against claims by its own employees as well as the claims of employees of enrolled subcontractors. Id. And as we explained in Stolz I , an enrolled subcontractor also receives protection against claims by employees of another enrolled subcontractor. 146 Ohio St.3d 281, 2016-Ohio-1567, 55 N.E.3d 1082, at ¶ 27. The question now before us is whether this grant of immunity to enrolled subcontractors violates certain provisions of the Ohio Constitution.

III. Stolz's Constitutional Claims

{¶ 10} In his amended complaint, Stolz alleged that R.C. 4123.35(O) violates various provisions of the state and federal Constitutions. The question certified by the district court does not distinguish between Stolz's federal and state claims. We answer certified questions of "Ohio law," S.Ct.Prac.R. 9.01(A), and thus we will limit our analysis to Stolz's claims under the Ohio Constitution.

{¶ 11} Stolz alleged violations of seven provisions of the Ohio Constitution. But in his briefing before this court, Stolz argues only that R.C. 4123.35(O) violates the due-process and equal-protection guarantees of the Ohio Constitution. Within these arguments, he contends that R.C. 4123.35(O) infringes upon fundamental rights protected by the right-to-jury and right-to-remedy provisions of the Ohio Constitution. Because he has not raised any arguments concerning the other provisions of the Ohio Constitution referred to in his amended complaint, we deem such claims to be abandoned. See Household Fin. Corp. v. Porterfield , 24 Ohio St.2d 39, 46, 263 N.E.2d 243 (1970). As to the constitutional claims that Stolz does raise, we conclude that neither has merit.

A. Due Course of Law

{¶ 12} Stolz first argues that R.C. 4123.35(O)'s grant of immunity to enrolled subcontractors violates his rights to due process under Article I, Section 16 of the Ohio Constitution. That section provides, "All courts shall be open, and every person, for an injury done him in his land, goods, person, or reputation, shall have remedy by due course of law, and shall have justice administered without denial or delay." Under a plain reading, the constitutional provision does not speak to "due process" at all but, rather, to an individual's right to access the court system and to seek a remedy. For many years, however, we have treated the provision as equivalent to the Due Process Clause of the Fourteenth Amendment to the United States Constitution. See Wilson v. Zanesville , 130 Ohio St. 286, 289-290, 199 N.E. 187 (1935), overruled in part on other grounds , Cincinnati v. Correll , 141 Ohio St. 535, 49 N.E.2d 412 (1943) ; Adler v. Whitbeck , 44 Ohio St. 539, 568-569, 9 N.E. 672 (1887). No party has asked us to do otherwise today.

{¶ 13} Stolz primarily argues that R.C. 4123.35(O) violates his rights to substantive due process. While the Due Process Clause of the Fourteenth Amendment on its face would seem to be concerned with only the adequacy of procedures employed when one is deprived of life, liberty, or property, the United States Supreme Court has read it to include a substantive component that forbids some government actions "regardless of the fairness of the procedures used to implement them," Daniels v. Williams , 474 U.S. 327, 331, 106 S.Ct. 662, 88 L.Ed.2d 662 (1986). We have also recognized substantive-due-process protections under the Ohio Constitution. See Arbino v. Johnson & Johnson , 116 Ohio St.3d 468, 2007-Ohio-6948, 880 N.E.2d 420, ¶ 48-49.

{¶ 14} In a substantive-due-process challenge, "[t]he first (and often last) issue * * * is the proper characterization of the individual's asserted right." Blau v. Fort Thomas Pub. School Dist. , 401 F.3d 381,...