A 2006 law intended to reduce delays of workers’ compensation appeals is constitutional, the Ohio Supreme Court ruled today.

The Supreme Court reversed an Eighth District Court of Appeals decision that struck down a law requiring an injured worker to obtain the consent of the employer before taking certain procedural measures that could slow down the resolution of an employer-initiated challenge to the administrative award of workers’ compensation benefits.

In the majority opinion authored by Justice R. Patrick DeWine, the Court found the legislature had a legitimate reason to enact the law because injured workers had been able to collect workers' compensation for a year or more before a trial court determined whether they were entitled to benefits.  The worker received benefits for as long as the appeal progressed.

“Justice delayed paid,” Justice DeWine wrote.

Appeals Follow Atypical Path
The Court’s opinion explained the unusual path an appeal of a workers’ compensation award takes compared with a traditional lawsuit or appeal of a state administrative agency ruling. The Court considered the appeal of Shannon Ferguson, who allegedly suffered injuries in 2009 while working for Ford Motor Company. Ferguson filed two workers’ compensation claims, and the Ohio Industrial Commission awarded him benefits for both claims.

Ford appealed the Industrial Commission’s ruling in 2012. Once Ford appealed to the Cuyahoga Common Pleas Court, the law required that Ferguson file the equivalent of a complaint alleging he is entitled to participate in the workers’ compensation fund, and he did. While Ford’s appeal progressed, Ferguson continued to be paid the benefits awarded by the Commission.

Although the company appeals, the law places the injured worker in the position of the plaintiff, now in a civil trial. Traditional court rules allow a plaintiff to request a case be dismissed without prejudice so it can be refiled later, and this can be done without the court’s consent. However, a 2006 law, R.C. 4123.512(D), required the employee to receive the employer’s consent to dismiss the case.

Unlike a traditional case where damages and financial compensation are determined at the outcome of the case, during a workers’ compensation appeal filed by an employer, the injured worker continues to receive the benefits awarded by the Commission throughout the entire appeal process. Additionally, workers who successfully establish in court their right to workers’ compensation can also obtain up to $4,200 in attorney fees.

During the time of an appeal, an employer may experience a negative impact from having an injury counted against it in the workers’ compensation system. However, if the employer’s appeal is successful, the state readjusts the employer’s experience rating to exclude the injury.  Self-insured employers pay benefits themselves during the appeal, but can be reimbursed by the workers’ compensation bureau if the award is overturned.

When Ferguson asked for Ford’s consent to dismiss the case, the company refused. Ultimately, Ferguson filed a declaratory judgment action, arguing the consent provision in 4123.512(D) was unconstitutional, and that he should be allowed to follow traditional court rules and have his case dismissed with the option to refile later.

Lower Courts Side with Ferguson
Ferguson argued the law violated the “separation-of-powers doctrine” because it conflicted with the Ohio Rules of Civil Procedure and the Ohio Supreme Court’s power to govern trial procedures. He also argued it violated the equal protection clause and due process clause of the Ohio Constitution.

The trial court agreed with Ferguson that the law violated the Ohio Constitution and also held that it violated the U.S. Constitution’s equal protection and due process protections. The Eighth District affirmed the trial court’s decision, and Ford appealed the case to the Supreme Court, which agreed to hear it.

Prior Rulings Allowed Delayed Appeals
Justice DeWine explained that before the 2006 law, the Court ruled workers could employ Civ.R. 41(A), the rule allowing for a voluntary dismissal of a complaint, in employer-initiated appeals. The Court concluded that while the employee is not the typical plaintiff when filing the lawsuit, the person takes on the role of plaintiff and is entitled to the rights granted to plaintiffs, including the right to voluntary dismiss a case without the court’s approval. Another 2006 Court decision, Fowee v. Wesley Howell, ruled the “savings statute” applied to the cases and placed a one-year limit on the time the employee had to refile a dismissed case.

Shortly after Fowee, the General Assembly amended R.C. 4123.512 to require employer consent.

Separation of Powers Analyzed
The opinion noted that Article IV, Section 5(B) of the Ohio Constitution gives the Supreme Court the power to prescribe rules governing the practices and procedures of Ohio courts, and that any law that conflicts with those rules has no effect. However, one area where the court rules are not superior to state laws are those set for “special statutory proceedings,” where a statute spells out the rules to be followed. And if a standard court rule would be “clearly inapplicable” to the proceeding, then it is not used.

The Eighth District found the workers’ compensation appeal was not a special statutory proceeding, which led it to view the court rule and the law as conflicting, the opinion noted. The Supreme Court ruled, however, that the appeal is a special proceeding established by legislation. The Court then explained a procedural rule is clearly inapplicable if it would “alter the basic statutory purpose” of the law.

The Court wrote that the legislature added the employer consent provision to reduce potential delay in the appeal process. Because the court rule allowing the voluntary dismissal without consent would alter the basic purpose of the law, the court rule is superseded by the state law, the Court concluded.

Equal Protection and Due Process Challenges Rejected
The court of appeals concluded that the law violated the equal protection clause because it creates a distinction between those filing a claim in an employer-initiated appeal and plaintiffs who file in traditional civil cases because other plaintiffs do not need permission to dismiss their cases.

The Court explained the equal protection clause does not forbid government from classifying people differently, and for distinctions such as this — between injured workers and typical plaintiffs — the law will be upheld if the Court finds the classification is “rationally related to a legitimate government purpose.”

“In enacting the consent provision, the legislature advanced legitimate state interests in limiting improper payments made during the pendency of appeals and in avoiding unnecessary delay in the appeal process,” the opinion stated.

The ability of an injured worker to collect payments by extending the appeal is a benefit that is not offered to any other type of civil litigation plaintiff, the Court wrote.

“The longer the delay before the reversal of an award, the greater the expense to the state. As this [C]ourt has recognized, the financial health of the workers’ compensation fund is a legitimate state interest,” the opinion stated.

Ferguson also claimed he was denied his due process rights because other types of plaintiffs could use the option of dismissing and refiling the case to take advantage of the time to prepare for the appeal. As with equal protection, the Court found the state law had to be rationally related to a legitimate government purpose to overcome a due process challenge.

“The General Assembly saw what it viewed as an area of concern—that a claimant in an employer-initiated workers’ compensation appeal could unilaterally prolong the appeal process for the sole purpose of guaranteeing the continued receipt of benefits for at least an additional year. This resulted in a needless extension of a process designed to run quickly, financial effects on the system as a whole, and a waste of judicial resources. And so, the General Assembly changed the law,” the opinion stated.

The trial court had stayed the original case until the Supreme Court ruled. The decision permits the case to proceed under the rule requiring employer consent.

Justices Sharon L. Kennedy, Judith L. French, William M. O’Neill, and Patrick F. Fischer joined the majority opinion.

Chief Justice Maureen O’Connor and Justice Terrence O’Donnell concurred in judgment only.

2015-1975. Ferguson v. State, Slip Opinion No. 2017-Ohio-7844.

View oral argument video of this case.

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