State ex rel. v. Bur. of Workers' Comp.
Decision Date | 05 April 2006 |
Docket Number | No. 2005-0526.,2005-0526. |
Citation | 2006 Ohio 1327,844 N.E.2d 335,108 Ohio St.3d 432 |
Parties | STATE ex rel. UNITED AUTOMOBILE, AEROSPACE & AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, Region 2-B, Appellant and Cross-Appellee, v. Ohio BUREAU OF WORKERS' COMPENSATION et al., Appellees. |
Court | Ohio Supreme Court |
Stephen E. Mindzak Law Offices, L.L.C., and Stephen E. Mindzak, Columbus, for appellant and cross-appellee.
Jim Petro, Attorney General, Elise Porter, and James A. Barnes, Assistant Attorneys General, for appellees and cross-appellants.
Garvin & Hickey, L.L.C., Preston J. Garvin, and Michael J. Hickey, urging affirmance for amicus curiae Ohio Chamber of Commerce.
Bricker & Eckler, L.L.P., and Thomas R. Sant, Columbus, urging affirmance for amici curiae Ohio Chapter of the National Federation of Independent Business and Ohio Manufacturers' Association.
Vorys, Sater, Seymour & Pease, L.L.P., Robert A. Minor, and Robin Obetz, Columbus, urging affirmance for amicus curiae Ohio Self-Insurers Association.
{¶ 1} This is an appeal and cross-appeal from a judgment dismissing a complaint for a writ of mandamus to compel a state agency to follow the law expressed in two of this court's opinions.
{¶ 2} Under R.C. 4123.931(A), the payment of workers' compensation benefits "creates a right of recovery in favor of a statutory subrogee against a third party, and the statutory subrogee is subrogated to the rights of a claimant against that third party." The "statutory subrogee" is "the administrator of workers' compensation, a self-insuring employer, or an employer that contracts for the direct payment of medical services." R.C. 4123.93(B).
{¶ 3} Former R.C. 4123.931(A) specified: "A statutory subrogee's subrogation interest includes * * * estimated future values of compensation and medical benefits arising out of an injury to or disability or disease of a claimant." See 1995 Am.Sub. H.B. No. 278, 146 Ohio Laws, Part II, 3596.
{¶ 4} Former R.C. 4123.931(D) further provided:
{¶ 6} In June 2001, in Holeton v. Crouse Cartage Co. (2001), 92 Ohio St.3d 115, 135, 748 N.E.2d 1111, we held that former R.C. 4128.931 violated Sections 2, 16, and 19, Article I of the Ohio Constitution.
{¶ 7} More specifically, we held: Id. at 123, 748 N.E.2d 1111.
{¶ 8} In addition, we held:
{¶ 9} "[Former] R.C. 4123.931(D) establishes a procedural framework under which an unconstitutional taking of the claimant's property or a denial of remedy by due course of law can occur. This framework distinguishes between third-party claims that are tried and third-party claims that are settled. In the case where an award or judgment is rendered in the third-party action, [former] R.C. 4123.931(D) allows the claimant to obtain jury interrogatories segregating damages that do not represent workers' compensation or medical benefits and, therefore, are not subject to the reimbursement right of the statutory subrogee. In contrast, the entire amount of any settlement or compromise is deemed subject to the reimbursement right of the statutory subrogee, and the claimant is precluded, under any circumstances, from showing that his or her settlement or portions thereof do not represent or duplicate workers' compensation or medical benefits.
{¶ 10} "* * * [Former] R.C. 4123.931(D) operates unconstitutionally * * * because it allows for reimbursement from proceeds that do not constitute a double recovery." Id., 92 Ohio St.3d at 125-126, 748 N.E.2d 1111; see, also, Modzelewski v. Yellow Freight Sys., Inc., 102 Ohio St.3d 192, 2004-Ohio-2365, 808 N.E.2d 381, holding former R.C. 4123.93 unconstitutional.
{¶ 11} In Holeton, 92 Ohio St.3d at 135, 748 N.E.2d 1111, despite holding the statute unconstitutional, we expressly noted that workers' compensation subrogation statutes are not per se unconstitutional and that we were addressing only the specific provisions in former R.C. 4123.931:
{¶ 12}
{¶ 13} We also recognized that "virtually every jurisdiction provides some statutory mechanism enabling the employer or fund to recover its workers' compensation outlay from a third-party tortfeasor." Id. at 120, 748 N.E.2d 1111.
{¶ 14} Following Holeton, the General Assembly enacted 2002 Sub.S.B. No. 227 ("S.B. 227"), which amended the subrogation provisions in R.C. 4123.93 and 4123.931, effective April 9, 2003.
{¶ 15} S.B. 227 repealed the former provisions in R.C. 4123.931(A) and (D) that we had found unconstitutional in Holeton and set forth a new settlement procedure in which a claimant would receive "an amount equal to the uncompensated damages divided by the sum of the subrogation interest plus the uncompensated damages, multiplied by the net amount recovered." R.C. 4123.931(B). The statutory subrogee would receive "an amount equal to the subrogation interest divided by the sum of the subrogation interest plus the uncompensated damages, multiplied by the net amount recovered." Id. The claimant and statutory subrogee can instead agree to divide the net amount recovered on a more fair and reasonable basis. Id.
{¶ 16} In addition, S.B. 227 permits claimants to "establish an interest-bearing trust account for the full amount of the subrogation interest that represents estimated future payments of compensation, medical benefits, rehabilitation costs, or death benefits, reduced to present value, from which the claimant shall make reimbursement payments to the statutory subrogee for the future payments of compensation, medical benefits, rehabilitation costs, or death benefits." R.C. 4123.931(E)(1).
{¶ 17} The manifest objective of the General Assembly in enacting S.B. 227 was to comply with our holding in Holeton. See, generally, Legislative Service Commission, Bill Analysis of 2002 S.B. 227.
{¶ 18} On April 14, 2003, five days after S.B. 227 became effective, appellant and cross-appellee, United Automobile, Aerospace & Agricultural Implement Workers of America, Region 2-B ("UAW"), filed a complaint in the Court of Appeals for Franklin County against the Ohio Bureau of Workers' Compensation and its administrator (collectively, "BWC"). UAW alleged that R.C. 4123.931 S.B. 227 contains provisions substantially identical to those in former R.C. 4123.931 found by the court to be unconstitutional in Holeton. UAW further alleged that R.C. 4123.93 and 4123.931, S.B. 227, are invalid under the court's holding in Glaspell v. Ohio Edison Co. (1987), 29 Ohio St.3d 44, 29 OBR 393, 505 N.E.2d 264.
{¶ 19} UAW requested a writ of mandamus to compel BWC to "follow the law as set forth" in the court's decisions in Holeton and Glaspell. UAW claimed that the BWC was bound to follow Holeton "notwithstanding the ill-fated attempt by the general assembly to act beyond their powers as conferred upon them by the constitution." UAW did not allege any specific claim by it or any of its members that they had been harmed by the enactment of the present versions of R.C. 4123.93 and 4123.931 in S.B. 227.
{¶ 20} BWC moved to dismiss UAW's complaint because, among other reasons, UAW lacked standing and the court of appeals did not have jurisdiction to grant declaratory and injunctive relief.
{¶ 21} In January 2004, a court of appeals magistrate recommended that the court either deny the writ or grant BWC's dismissal motion. The magistrate concluded that although UAW had the requisite standing, it had not established that BWC had refused to comply with Holeton or Glaspell. The magistrate further concluded that insofar as UAW sought a holding that S.B. 227 is unconstitutional based on Holeton, it had adequate remedies in the ordinary course of law.
{¶ 22} The parties filed objections to the magistrate's decision. BWC asked that the court adopt the magistrate's decision, "but clarify that UAW also lacks standing."
{¶ 23} In February 2005, the court of appeals overruled UAW's objections, held that BWC's objections were moot,...
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