State ex rel. Ohio-Kentucky-Indiana Reg'l Council of Gov’ts v. Bureau of Workers' Comp.

CourtUnited States State Supreme Court of Ohio
Citation2022 Ohio 3058
Docket Number2021-0889
PartiesThe State ex rel. Ohio-Kentucky-Indiana Regional Council of Governments, Appellant, v. Bureau of Workers' Compensation, Appellee.
Decision Date06 September 2022



The State ex rel. Ohio-Kentucky-Indiana Regional Council of Governments, Appellant,

Bureau of Workers' Compensation, Appellee.

No. 2021-0889

Supreme Court of Ohio

September 6, 2022

Submitted June 14, 2022

Appeal from the Court of Appeals for Franklin County, No. 20AP-56, 2021-Ohio-2001.

Taft, Stettinius & Hollister, L.L.P., Lauren A. Kemp, and Samuel M. Duran, for appellant.

Dave Yost, Attorney General, and John Smart, Assistant Attorney General, for appellee.



{¶ 1} For purposes of setting workers' compensation premium rates, appellee, the Ohio Bureau of Workers' Compensation, assigns each Ohio employer to a classification based on the degree of hazard in the employer's business. The bureau had long assigned appellant, the Ohio-Kentucky-Indiana Regional Council of Governments ("OKI"), to two classifications applicable to private employers. But in 2018, the bureau reclassified OKI as a "special public authority," which is a type of "public-employer taxing district," resulting in a much higher premium. OKI sought a writ of mandamus from the Tenth District Court of Appeals ordering the bureau to return OKI to its previous classifications. The Tenth District denied the writ, and OKI appealed.

{¶ 2} We conclude that the bureau abused its discretion by classifying OKI as a special public authority without explaining why that classification most closely describes OKI's business with respect to its degree of hazard. We therefore reverse the Tenth District's judgment and grant a limited writ of mandamus, as explained in more detail below.


A. Classification of occupations

{¶ 3} Article II, Section 35 of the Ohio Constitution empowers the bureau to "classify all occupations, according to their degree of hazard" and to "fix rates of contribution" to Ohio's insurance fund according to those classifications. Under that grant of authority, R.C. 4123.29 requires the bureau to "[classify occupations or industries with respect to their degree of hazard and determine the risks of the different classes," R.C. 4123.29(A)(1), and to "[f]ix the rates of premium of the risks of the classes," R.C. 4123.29(A)(2)(a).

{¶ 4} The bureau sets forth the occupational classifications in a manual. See, e.g., Ohio State Workmen's Compensation Insurance Fund Manual (1946). Because each classification is assigned a numerical code, the classifications are


sometimes referred to-including in the record and briefing in this case-as "manual classifications," "manual numbers," or "manual codes."

{¶ 5} The bureau assigns each employer in Ohio to a classification and assigns each classification a premium rate. R.C. 4123.29; Ohio Adm.Code 4123-17-08(A) and (D). The assignment to a particular classification therefore determines the rate of an employer's workers' compensation premiums.

{¶ 6} The bureau's task is to "assign the one basic classification that best describes the business of the employer." Ohio Adm.Code 4123-17-08(D). In general, "[i]t is the business that is classified, not the individual employments, occupations or operations within the business." Id. For example, a business with a primary activity of making furniture might be classified under "furniture manufacturing," even though not all its employees work directly in the furniture-manufacturing process. See Ohio Adm.Code 4123-17-08(B)(1). "If no basic classification clearly describes the business, the classification that most closely describes the business must be assigned." (Emphasis added.) Ohio Adm.Code 4123-17-08(D). In addition, some common job duties-such as clerical office duties-have their own "standard exception classifications," Ohio Adm.Code 4123-17-08(B)(1), that apply to those employees separate from the business's basic classification; but every business is assigned a basic classification, see Ohio Adm.Code 4123-17-08(A) through (B).


{¶ 7} OKI was created in 1967 as the Ohio-Kentucky-Indiana Regional Planning Authority. In its current iteration, OKI operates according to articles of agreement adopted under R.C. Chapter 167, Ky. Rev. Stat. 65.210 et seq., and Ind. Stat. 36-1-7 et seq. As stated in its articles of agreement, OKI's purpose is "[t]o be a public body and to provide such services within the OKI Region as applicable law will permit and the Board of Directors or the Executive Committee require in order to foster and develop better coordination, protection and satisfaction of the


interests and needs of the public governing bodies within the OKI Region." (The OKI Region is the entire area of the Ohio, Kentucky, and Indiana counties that are members of OKI. The 2006 articles of agreement were approved by Butler, Clermont, Hamilton, and Warren Counties in Ohio; Boone, Campbell, and Kenton Counties in Kentucky; and Dearborn County in Indiana.)

{¶ 8} OKI's specific focus is "[t]o provide coordinated planning services" to "federal, state and local governments, their political subdivisions, agencies, departments, instrumentalities, special districts and private agencies or entities" relating to a "regional transportation and development plan within the OKI Region," including planning that affects "land use, housing, community facilities, capital improvements, metropolitan and regional development, transportation facilities, health, welfare, safety, education, economic conditions, water supply and distribution facilities, waste treatment and disposal, water and land conservation," and the like. Some of OKI's funding comes from its member counties; some comes from other public and private entities.

C. OKI's classification history

{¶ 9} In 1969, OKI applied to the bureau for the classification of its industry and the fixing of its workers' compensation premium. The bureau assigned OKI what was then manual classification 8747, "council of government staff members office and away from office."

{¶ 10} In 1970, OKI requested a new classification for its growing number of employees who worked exclusively in the office with no away-from-office duties. The bureau declined the requested change, keeping all of OKI's employees under manual classification 8747.

{¶ 11} In 1987, OKI again questioned the classification of various groups of its employees. After conducting a rating inspection, the bureau retained manual classification 8747 (then denominated as 8747-07) for some of OKI's employees


but added manual classification 8810-04, "clerical office employees, no outside duties," for others.

{¶ 12} In 1995, the bureau performed another audit of OKI and retained manual classifications 8747 and 8810.

{¶ 13} In 1997, the bureau notified OKI that it was in the process of converting its manual classifications to those established by the National Council of Compensation Insurance ("NCCI"). (The Ohio General Assembly mandated this change in 1993. Am.Sub.H.B. No. 107, 145 Ohio Laws, Part II, 2990, 3113.) The classifications the bureau assigned to OKI under the NCCI manual were 8742, "salespersons or collectors-outside," and 8810, "clerical office employees."

{¶ 14} In 2010, the bureau again audited OKI and again retained the same manual classifications: 8742 and 8810.

{¶ 15} In 2018, the bureau told OKI that its original NCCI classifications, which were for private employers, had been made in error and that the bureau would transition OKI to manual classification 9443, "special public authorities, excluding transit authorities: all employees & clerical, clerical telecommuter, salespersons, drivers." This reclassification would make OKI's workers' compensation premium 14 times higher than it had been.

D. Administrative proceedings

{¶ 16} OKI filed a complaint objecting to the reclassification, which the bureau denied, concluding that OKI "does meet the criteria of a public employer, specifically a special public authority." OKI protested that determination, but after a hearing, an adjudicating committee upheld it. OKI appealed to the administrator's designee, who also upheld the reclassification.

E. Mandamus action

{¶ 17} OKI then filed this mandamus action in the Tenth District Court of Appeals, alleging that the bureau abused its discretion by assigning OKI to a


manual classification that does not best describe OKI's business. OKI sought a writ ordering the bureau to return it to its previous classifications.

{¶ 18} A magistrate concluded that the bureau abused its discretion because "OKI is a private employer and therefore may not be assigned [m]anual [classification] 9443." 2021-Ohio-2001, 174 N.E.3d 55, ¶ 58. However, the court of appeals sustained the bureau's objections to the magistrate's conclusions of law and concluded that OKI was not a private employer and that the bureau did not abuse its discretion by determining that manual classification 9443 was the best fit for OKI's business. Id. at 14-15, 30-32. The Tenth District therefore denied the writ. Id. at ¶ 33. OKI appealed that judgment to this court as of right.


{¶ 19} OKI asserts two propositions of law. In the first, it argues that the bureau arbitrarily, capriciously, and discriminatorily reclassified it as a "special taxing district," because OKI is neither a public employer nor a taxing district,...

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