Sherman v. Ohio Pub. Emps. Ret. Sys.
| Decision Date | 29 January 2019 |
| Docket Number | No. 18AP-181,18AP-181 |
| Parties | Jeffrey P. SHERMAN, Plaintiff-Appellant, v. OHIO PUBLIC EMPLOYEES RETIREMENT SYSTEM, Defendant-Appellee. |
| Court | Ohio Court of Appeals |
On brief: Dworken & Bernstein Co., L.P.A., Patrick J. Perotti, Nicole T. Fiorelli, and Frank A. Bartela, Akron, for appellant. Argued: Nicole T. Fiorelli, Painesville,.
On brief: [Dave Yost ], Attorney General, and Benesch, Friedlander, Coplan & Aronoff LLP, John F. Stock, and Mark D. Tucker, special counsel for appellee. Argued: Mark D. Tucker, Columbus,.
DECISION
Plaintiff-appellant, Jeffery P. Sherman, appeals from a judgment entry of the Franklin County Court of Common Pleas granting the motion to dismiss of defendant-appellee, Ohio Public Employees Retirement System ("OPERS"), for failure to state a claim. For the following reasons, we reverse.
On July 28, 2017, Sherman filed a complaint alleging OPERS violated his right to equal protection under the Ohio Constitution by reducing his health insurance subsidy while continuing to provide the full subsidy to other similarly situated OPERS retirees. According to the complaint, Sherman retired from an OPERS-covered position with the Ohio Department of Taxation on May 31, 2009. In May 2010, Sherman was reemployed by the Regional Income Tax Agency ("RITA"), another OPERS-covered position, as a part-time attorney.
The complaint further alleges that in 2016, OPERS withheld $ 74.00 of Sherman's health insurance premium monies each month, resulting in Sherman paying $ 106.54 per month for health insurance instead of $ 32.54 per month. The reason these monies were withheld was, according to the complaint, solely because Sherman was reemployed in an OPERS-covered position. Sherman alleges that OPERS retirees who are reemployed in non-OPERS-covered positions receive their maximum health insurance premium monies whereas OPERS denied Sherman a significant portion of his monies solely because he gained reemployment in an OPERS-covered position.
In 2017, OPERS again withheld $ 74 of Sherman's health insurance premium monies each month, resulting in Sherman paying $ 192 for health insurance each month instead of $ 118 per month. Pursuant to the complaint, OPERS's stated reason for treating reemployed retirees differently is "the administrative feasibility of identifying retirees who are re-employed in non-[OPERS-]covered positions." (Compl. at 4.)
In the complaint, Sherman sought class certification on behalf of all OPERS retirees for whom OPERS withheld a portion of their health insurance premium monies from January 1, 2016 to the present due to their reemployment in an OPERS-covered position. Additionally, Sherman sought a declaratory judgment and equitable relief in the form of restitution of the monies withheld.
In response to the complaint, on September 21, 2017, OPERS filed a Civ.R. 12(B)(6) motion to dismiss. OPERS argued that it is the policy of the state of Ohio to discourage "double-dipping," which OPERS defined as receiving taxpayer-supported compensation while also receiving a public pension. (Mot. to Dismiss at 2.) OPERS asserted that this policy serves to preserve state money and, therefore, was a sufficient rational basis for the difference in treatment between Sherman and other reemployed OPERS retirees who have gained reemployment in non-OPERS-covered positions.
The trial court, in a February 14, 2018 decision and entry, granted OPERS's motion to dismiss. The trial court concluded that OPERS retirees who obtain reemployment with a private employer are not similarly situated to OPERS retirees who obtain reemployment with an OPERS participating employer. The trial court additionally found that even if the groups were similarly situated, OPERS was nonetheless entitled to dismissal because OPERS set forth a rational basis for the classification and Sherman did not maintain his burden of negating every possible basis which might support the classification. Sherman timely appeals.
Sherman sets forth the following errors for our review:
(Emphasis sic.)
Under Civ.R. 12(B)(6), a defendant may move to dismiss a complaint for failure to state a claim upon which relief can be granted. A Civ.R. 12(B)(6) motion to dismiss tests the sufficiency of a complaint. O'Brien v. Univ. Community Tenants Union, Inc. , 42 Ohio St.2d 242, 245, 327 N.E.2d 753 (1975). In ruling on a motion to dismiss pursuant to Civ.R. 12(B)(6), the court must construe the complaint in the light most favorable to the plaintiff, presume all factual allegations in the complaint are true, and make all reasonable inferences in favor of the plaintiff. Mitchell v. Lawson Milk Co. , 40 Ohio St.3d 190, 192, 532 N.E.2d 753 (1988). The dismissal of a complaint for failure to state a claim is proper when it appears, beyond doubt, that the plaintiff can prove no set of facts entitling him to relief. Celeste v. Wiseco Piston , 151 Ohio App.3d 554, 2003-Ohio-703, 784 N.E.2d 1198, ¶ 12 (11th Dist.). When reviewing a decision on a Civ.R. 12(B)(6) motion to dismiss for failure to state a claim upon which relief can be granted, this court's standard of review is de novo. Foreman v. Dept. of Rehab. & Corr. , 10th Dist. No. 14AP-15, 2014-Ohio-2793, 2014 WL 2931925, ¶ 9.
In his first assignment of error, Sherman argues the trial court erred in concluding that OPERS retirees reemployed in an OPERS-covered position are not similarly situated to OPERS retirees reemployed in a non-OPERS-covered position.
The Equal Protection Clause of the Ohio Constitution provides, in pertinent part, Ohio Constitution, Article I, Section 2. Generally, equal protection requires that similarly situated persons be treated similarly under the law. State v. Lawson , 10th Dist. No. 12AP-771, 2013-Ohio-2111, 2013 WL 2296318, ¶ 18. "The comparison of only similarly situated entities is integral to an equal protection analysis." GTE North, Inc. v. Zaino , 96 Ohio St.3d 9, 2002-Ohio-2984, 770 N.E.2d 65, ¶ 22. "But the Equal Protection Clause ‘does not require things which are different in fact * * * to be treated in law as though they were the same.’ " Id. , quoting Tigner v. Texas , 310 U.S. 141, 147, 60 S.Ct. 879, 84 L.Ed. 1124 (1940). Thus, to state an equal protection claim, a party must claim that the government treated similarly situated persons differently. State ex rel. Walgate v. Kasich , 10th Dist., 2017-Ohio-5528, 93 N.E.3d 417, ¶ 18.
Sherman asserts that, in all relevant respects, OPERS retirees who are employed in OPERS-covered positions are similarly situated to OPERS retirees who are employed in the private sector. According to Sherman, both groups needed health insurance, were OPERS retirees, and qualified for the OPERS health insurance premium subsidy. Both groups are treated the same by the General Assembly and OPERS in that neither group is denied a pension by virtue of their reemployed status. Additionally, Sherman argues that no public policy exists to deter OPERS retirees from seeking reemployment in an OPERS-covered position. To the contrary, Sherman notes that R.C. 145.38 expressly recognizes than an OPERS retiree may return to employment in an OPERS-covered position.
OPERS responds that the groups are not similarly situated because retirees such as Sherman who are reemployed by an OPERS-covered employer are receiving a second source of taxpayer-supported compensation and benefits. OPERS argues that the General Assembly distinguishes between publicly and privately reemployed retirees so as to deter "double-dipping" in public employment. According to OPERS, the $ 74 subsidy reduction is designed to maintain the fiscal health and stability of the public pension fund.
R.C. 145.38(B)(1) states, in pertinent part, that "[an OPERS] retirant or other system retirant may be employed by a public employer." However, an OPERS retiree who has received a retirement allowance for less than two months when he or she becomes reemployed in an OPERS-covered position must forfeit the retirement allowance for any month he or she is employed prior to the expiration of a two-month period. R.C. 145.38(B)(4)(a). This provision is not designed to discourage a return to public employment; rather, the intention of the statute is to ensure that the public employee has terminated service before receiving retirement benefits. State ex rel. O'Grady v. Griffing , 140 Ohio St.3d 290, 2014-Ohio-3687, 17 N.E.3d 574, ¶ 14. "[A] public employee must terminate service before receiving retirement benefits." Id. "A public employee need not leave public employment permanently, but may terminate employment for purposes of OPERS retirement and then be reemployed immediately, upon forfeiting two months of benefits." Id. , citing R.C. 145.38(B). During that period of forfeiture, an OPERS retiree is not eligible to receive pre-Medicare healthcare coverage. Ohio Adm.Code 145-4-30.
The state of Ohio does not have a general policy of discouraging OPERS retirees from returning to public employment. Moreover, the General Assembly has not acted to deny Sherman or others like him who resume public employment from receiving any portion of their OPERS pensions while employed as a new OPERS-covered employee. While OPERS points to a number of statutory provisions that apply to reemployed OPERS retirees in support of its argument that these classifications are not similarly situated, none...
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