State ex rel. v. Bur. of Workers' Comp., 2006-0916.

• Citation: 113 Ohio St.3d 154,863 N.E.2d 160,2007 Ohio 1252
• Decision Date: 04 April 2007
• Docket Number: No. 2006-0916.,2006-0916.
• Parties: The STATE ex rel. RMS OF OHIO, INC., Appellant, v. OHIO BUREAU OF WORKERS' COMPENSATION, Appellee.
• Court: United States State Supreme Court of Ohio

863 N.E.2d 160 113 Ohio St.3d 154 2007-Ohio-1252 The STATE ex rel. RMS OF OHIO, INC., Appellant,
v.
OHIO BUREAU OF WORKERS' COMPENSATION, Appellee. No. 2006-0916. Supreme Court of Ohio. Submitted January 9, 2007. Decided April 4, 2007.

[863 N.E.2d 161]

Gibson Law Office Co., L.P.A., and J. Miles Gibson, for appellant.

Marc Dann, Attorney General, and Gerald H. Waterman, Assistant Attorney General, for appellee.

PER CURIAM.

113 Ohio St.3d 154

{¶ 1} The sole question before us is this: Did appellee, the Ohio Bureau of Workers' Compensation, abuse its discretion in reclassifying the nature of the business of appellant, RMS of Ohio, Inc., for purposes of calculating its workers' compensation premium rates? We hold it did not.

{¶ 2} RMS of Ohio, Inc., provides in-home personal-care services to clients who are mentally handicapped or developmentally disabled. The bureau uses a manual of business-classification codes to determine workers' compensation premiums. The manual is prepared by the National

863 N.E.2d 162

Council on Compensation Insurance, Inc. ("NCCI"). Prior to July 2000, RMS was classified under manual classification code 8861, which covers "Welfare Social Service Organizations Professional Employees," and code 9110, which covers "Welfare Social Service Organizations Non-Professional Employees." A bureau audit of payroll records

113 Ohio St.3d 155

from July 2000 through June 2002 resulted in the reclassification of RMS under code 8835, "Nursing-Home Health, Public and Traveling— all employees." Code 8835 requires a higher workers' compensation premium. RMS objected, but the bureau's Adjudicating Committee upheld the reclassification, noting, among other things, that RMS was not a welfare or charitable organization covered by code 8861 and 9110.

{¶ 3} That order was affirmed by the bureau's administrator's designee.

{¶ 4} RMS filed a mandamus action in the Court of Appeals for Franklin County, alleging that the bureau abused its discretion in reclassifying the nature of its business. RMS conceded that it did not provide services to individuals in a group-home setting and that it was not a charitable or welfare organization, which is what code classifications 8861 and 9110 cover. It acknowledged that its services were instead rendered at the homes of its individual clients, but it argued that location should not be dispositive, since the actual duties, and hence the risks, were similar.

{¶ 5} The court of appeals was not persuaded. Stressing the long-standing deference afforded the agency in classifying occupations and industries, the court denied the writ. This appeal as of right followed.

{¶ 6} We have long recognized the challenges involved in establishing premium rates for workers' compensation coverage and have repeatedly confirmed the deference due the agency in these matters. State ex rel. Reaugh Constr. Co. v. Indus. Comm. (1928), 119 Ohio St. 205, 209, 6 Ohio Law Abs. 694, 162 N.E. 800; State ex rel. McHugh v. Indus. Comm. (1942), 140 Ohio St. 143, 149, 23 O.O. 361, 42 N.E.2d 774; State ex rel. Minutemen, Inc. v. Indus. Comm. (1991), 62 Ohio St.3d 158, 161, 580 N.E.2d 777; State ex rel. Progressive Sweeping Contrs., Inc. v. Ohio Bur. of Workers' Comp. (1994), 68 Ohio St.3d 393, 395, 627 N.E.2d 550. Deference is required "in all but the most extraordinary circumstances," with judicial intervention warranted only when the agency has acted in an "arbitrary, capricious or discriminatory" manner. Progressive Sweeping, 68 Ohio St.3d at 395-396, 627 N.E.2d 550.

{¶ 7} The rate-making process starts with "classif[ying] occupations or industries with respect to their degree of hazard." R.C. 4123.29(A)(1). The goal is to "assign the one basic classification that best describes the business of the employer within a state." Ohio Adm.Code 4123-17-08(D). It is an undertaking, however, in which "absolute precision * * * is often impossible." Progressive Sweeping, 68 Ohio St.3d at 395, 627 N.E.2d 550. Accordingly, we are "reluctant to find an abuse of discretion merely because the employer's actual risk does not precisely correspond with the risk classification assigned." Id. at 396, 627 N.E.2d 550.

113 Ohio St.3d 156

{¶ 8} The bureau's decision to reclassify RMS's operations from codes 8861 and 9110 to 8835 is not an abuse of discretion. Codes 8861 and 9110 apply to "charitable or welfare organizations." RMS is not a charitable or welfare organization. Moreover, the scope provision of codes 8861 and 9110's states:

{¶ 9} "Codes 8861 and 9110 are applicable to institutions that provide charitable or welfare assistance for clients such as needy persons; mentally, physically or

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emotionally handicapped persons; abused spouses; and those who may be working off drug- or alcohol-related sentences. Charitable or welfare organizations may offer these individuals sleeping accommodations, meals, counseling, education, training and employment." (Emphasis added.)

{¶ 10} In...