In the Matter of the Commission Review of the Capacity Charges of Ohio Power Company and Columbus Southern Power Company, Case nos. 2012-2098 and 2013-0228
Public Utilities Commission of Ohio

Clyde A. Hupp, et al. v. Beck Energy Corporation and XTO Energy, Inc., Case no. 2014-1933 State of Ohio ex rel. Claugus Family Farm, L.P. v. Seventh District Court of Appeals, et al., Case no. 2014-0423
Seventh District Court of Appeals (Monroe County)

Jessica Simpkins, et al. v. Grace Brethren Church of Delaware, Case no. 2014-1953
Fifth District Court of Appeals (Delaware County)

In re: A.G. A Minor Child v. State of Ohio, Case no. 2014-2190
Eighth District Court of Appeals (Cuyahoga County)

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Is PUCO-Set Rate for Electricity Capacity Charges Permitted by Law?

In the Matter of the Commission Review of the Capacity Charges of Ohio Power Company and Columbus Southern Power Company, Case nos. 2012-2098 and 2013-0228
Public Utilities Commission of Ohio

ISSUES:

• Was the decision by the Public Utilities Commission of Ohio (PUCO) in an AEP-Ohio rate case unlawful and unreasonable because the PUCO attempted to regulate a competitive service in direct contradiction to state law?
• Did the PUCO lack ratemaking authority over AEP’s transactions that don’t involve supplying electricity to consumers?
• Did the PUCO lack the authority to interpret the contract provisions of an agreement approved by the Federal Energy Regulatory Commission (FERC)?
• Did AEP-Ohio present evidence as required in these cases, and did the PUCO comply with the requirements contained in R.C. Chapter 4909?
• Was the PUCO’s authorization unlawful and unreasonable when it approved above-market compensation to AEP-Ohio and set capacity rates at a level greater than the market-based auction prices?
• Did the PUCO improperly fail to restore the market-based auction pricing as required by R.C 4928.143(C)(2)(b)?
• Were the two-tiered rates established by the PUCO in two 2012 entries based on the record?
• Did the PUCO improperly fail to order AEP-Ohio to refund certain capacity charges or to credit certain amounts?
• Was the PUCO’s conduct in these matters “arbitrary and capricious,” an abuse of discretion, and outside the law?

BACKGROUND:
AEP-Ohio, which is the merged companies of Ohio Power Company and Columbus Southern Power, is part of PJM Interconnection, an organization that manages the delivery of electricity to 13 states and the District of Columbia. In its role, AEP must ensure that it has sufficient capacity to supply electricity to customers given fluctuating demand. To meet that obligation, AEP can choose to sell electricity at a price determined through a market-based auction process conducted by PJM or to become a “fixed resource requirement (FRR) entity,” pursuant to a 2007 agreement with PJM.

As an FRR entity, AEP can reject the auction prices and ask a federal commission to set rates based on its actual costs to meet electricity demands. Or, if the state adopts a “state compensation mechanism,” that rate would prevail and be used instead by AEP.

Following an auction, capacity rates were set at $220.96 megawatt-day for 2010-2011, $145.79 megawatt-day for 2011-2012, $20.01 megawatt-day for 2012-2013, $33.71 megawatt-day for 2013-2014, and $153.89 megawatt-day for 2014-2015.

AEP chose to become an FRR entity from 2012 through May 2015. On Dec. 8, 2010, the PUCO approved a state compensation mechanism so that AEP could charge a rate different from the auction prices, and the commission also began an investigation. Initially, a two-tiered pricing system was implemented in January 2012 that included a rate of $255 megawatt-day. Some months later, the PUCO rejected that structure. After several administrative hearings, the PUCO rejected AEP’s proposed rate of $355 megawatt-day and eventually set the company’s rate at $188.88 megawatt-day, though it allowed the company to charge other competitive retail electric service providers the lower auction prices. The commission permitted AEP to defer the difference between the two rates, and collect the costs later from retail customers.

Industrial Energy Users-Ohio, the Ohio Consumers’ Counsel, and FirstEnergy Solutions appealed the PUCO’s ruling to the Ohio Supreme Court. In February 2013, the Court combined case number 2013-0228 with a case involving related issues, 2012-2098.

Industrial Energy Users-Ohio
Attorneys for Industrial Energy Users-Ohio, a statewide association of manufacturers, argue that the PUCO had no authority to use a cost-based method to decide the capacity rate AEP could charge. The agreement with PJM cannot expand the PUCO’s jurisdiction because the commission’s authority is defined by the state legislature, they maintain.

They add that the federal commission has found market-rate auction prices determined by PJM to be “just and reasonable.” They contend that the PUCO invented a methodology to arrive at the rates approved for AEP. Not only does the substantial rate increase the PUCO approved for AEP deny lower electricity bills to customers, but also the costs that AEP is permitted to defer from the competitive electric providers to the customers amount to $508 million, they assert. They conclude that the “above-market supplement” to AEP is unlawful and unreasonable.

Consumers’ Counsel
Attorneys for the Ohio Consumers’ Counsel, the state agency created to represent residential utility customers, focus on the costs that the PUCO “deferred” from the electric providers to customers in AEP’s service area. They estimate these costs to be anywhere from $725 million to $800 million. This “subsidy” to the electric companies is “unfair, unjust, and unreasonable” and violates Ohio law, they maintain. They also argue the PUCO was required by state law to first find that the existing electric rate, based on the auction prices, was unjust and unreasonable before it was authorized to change it. They contend that the commission didn’t make this determination, so it lacked jurisdiction to set a different rate for capacity charges.

FirstEnergy Solutions
Attorneys for FirstEnergy Solutions assert that the agreement allowing a company like AEP to opt out of the auction prices and ask to sell electricity at a different rate, possibly set by the state, doesn’t allow the PUCO to abandon the market principles inherent in the agreement. They maintain that the PJM agreement’s goals are to ensure reliable electric service and to develop a strong competitive marketplace. They argue that the PUCO instead applied a cost-based rate-setting method that was used before the industry’s deregulation in 1999 to permit AEP to recover its actual costs through the capacity charges assessed to competitive electric providers. By approving a rate for AEP that’s well above the market price, the PUCO failed to follow state law and policy, they conclude.

Public Utilities Commission
Attorneys for the PUCO note the volatile capacity market reflected in the highs and lows of the auction prices. They contend that the PUCO applied state law to decide a just and reasonable rate that would allow AEP to cover its costs in meeting its obligations to ensure electric capacity service throughout its service area as an FRR entity. They maintain that the rate set by the PUCO protects consumers because they have a choice of electric suppliers and rates. By letting AEP charge competitive electric providers the auction prices and deferring the difference in costs to consumers, the providers are better able to compete for customers within AEP’s territory, they argue. They assert that the PUCO-approved rate also provides certainty and stability to AEP by covering its costs to ensure capacity service in the region.

Because AEP is solely ensuring and supplying capacity in the territory, the PUCO’s attorneys argue this is a non-competitive arena. They also note the commission has broad authority to oversee utility companies and to decide whether rates are just and reasonable. The PUCO is mandated to adjust rates that don’t “reasonably compensate a utility for a service it provides,” they write in the brief to the Court. The commission did so while protecting the interests of all parties, they conclude.

AEP-Ohio
Attorneys for AEP believe the price set by the PUCO is too low and doesn’t adequately cover its costs in providing capacity service. But they note that at least a $188.88 megawatt-day charge is fully supported by the evidence. Because AEP in this particular role isn’t providing power to consumers, but instead is ensuring that competitive providers have electricity to meet demand, AEP’s attorneys point out that the PUCO views this not as retail electric service but instead as a wholesale service. Noting that the company would have lost $240 million in revenue just in 2012 and 2013 had it used the fluctuating auction prices, they explain that the PUCO agreed that a cost-based rate was needed. They also contend that the deferral of costs isn’t yet resolved because they’re part of a separate appeal.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket (2012-2098 and 2013-0228).

Contacts
Representing FirstEnergy Solutions: Mark A. Hayden, 330.761.7735

Representing Industrial Energy Users-Ohio: Samuel C. Randazzo, 614.469.8000

Representing Ohio Consumers’ Counsel: Kyle L. Kern, 614.466.8574

Representing Ohio Power Company/AEP-Ohio: Steven T. Nourse, 614.716.1608

Representing the Public Utilities Commission of Ohio from the Ohio Attorney General’s Office: John H. Jones, 614.466.4395

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Are 700 Ohio Landowners Locked Into Long-Term Leases With Beck Energy Even After a Decade of No Drilling for Oil and Gas?

Clyde A. Hupp, et al. v. Beck Energy Corporation and XTO Energy, Inc., Case no. 2014-1933 State of Ohio ex rel. Claugus Family Farm, L.P. v. Seventh District Court of Appeals, et al., Case no. 2014-0423
Seventh District Court of Appeals (Monroe County)

ISSUES:

• Are leases Monroe County landowners and others signed with Beck Energy void because they are worded to allow Beck to perpetually control the mineral rights while not attempting to drill for oil or gas?
• Do the Beck leases properly contain a primary and secondary clause that requires it drill for oil and gas in the first 10 years of the lease and that it can only control the land as long as they are actively producing?
• Do an estimated 700 Ohio landowners with Beck leases who were made part of a class-action suit against Beck without notice have the right to end their leases and renegotiate new ones if they choose?
• Was an appeals court authorized to place an order freezing all 700 contested leases, and allowing the clock to start running again on them only after the litigation is resolved?

INTRODUCTION:
Two sets of Ohio landowners are engaged in protracted lawsuits with Beck Energy Corp. over leases signed to explore drilling for oil and natural gas in southern and eastern Ohio. The parties, including Beck’s partner XTO Energy, have indicated the dispute involves millions of dollars in potential bonus payments and royalties, with each side accusing the other of blocking its path toward those profits. The Ohio Supreme Court consolidated the two cases, Hupp and Claugus Family Farm, to hear multiple issues involved in the cases. The first issues, raised in Hupp, center on whether a trial court’s decision to void the Beck leases for five Monroe County landowners was valid because the court agreed with the landowners that Beck crafted the language to sit on the land as long as it wished before drilling. In that case, the court also allowed the landowners to seek class action status to void the Beck leases of 700 landowners with similar form leases. The second case, Claugus Family Farm¸ is brought on behalf of those absent class members who weren’t notified of the class action. When the class action was certified, an appeals court froze all the leases on a date in 2012. Claugus Family Farm objected to the “tolling order” by the court that froze the leases. It argues its lease with Beck would have expired by now, and the farm owners could enter into another lease that would pay more than $470,000 in signing bonuses plus more royalties that Beck offered. Beck and XTO argue the approval of the class made it too risky to drill, so they have been thwarted from moving forward since 2012 and should have more time to drill if they choose.

BACKGROUND:
In September 2011, five landowners filed a complaint in Monroe County Common Pleas Court against Beck claiming they all signed virtually identical form leases labeled “G&T (83).” The landowners claimed that after a few years of inactivity, they contacted Beck and were told the company had no immediate plans to drill their land because a pipeline wasn’t available in that area of the county. The landowners then interpreted the lease as allowing Beck to perpetually refuse to drill and pay royalties as long as the company paid between $1 and $5 per acre per year. Beck argued the leases followed more than 100 years of precedent of Ohio law that required Beck to drill within 10 years of the lease, and could only remain on the land after that as long as the company kept up the drilling operations and paid royalties.

The court in February 2012 granted summary judgment to the landowners granting a declaratory judgment that declared the leases void as a violation of public policy against mineral right leases that have no end date, and ordered the leases cleared from their titles. The landowners also filed for class-action status, first recognizing the same G&T (83) leases were likely signed by 200 other Monroe County landowners who had not had their property prepared for drilling by Beck. They amended their lawsuit to contain an estimated 700 landowners throughout Ohio that signed the same standard lease with Beck. As the litigation ensued, Beck signed an agreement with XTO Energy to designate the “deep rights” to drill under the land to XTO for $84 million. As Beck appealed the decision voiding the leases to the Seventh District Court of Appeals, XTO unsuccessfully attempted to intervene in the case arguing its rights were at stake as well if the leases were voided. In February 2013, the trial court granted the class-action status.

Because the landowners only sought the judgment to void the leases and asked for no monetary damages, the class action was designated under a section of Ohio law (similar to federal law), that didn’t require the other landowners to be notified of the case or given a right to opt out as is required in more typical class-action lawsuits. Beck asked the trial court to issue a “tolling order” that would freeze all leases to Oct. 1, 2012, and not count any time toward the 10-year deadline to drill while the litigation proceeded. The order was sought to last until the Supreme Court either declined to hear or decided the case. The trial court only agreed to toll the leases of the three landowners in the original suit after two others dropped out. In September 2013, the Seventh District reversed the trial court’s ruling declaring the leases valid. Beck, claiming it lost the time to drill not only on the premises of the three landowners, but also for all the class action members, asked for the tolling order to extend to all 700 properties. The appellate court agreed. In March 2014, the Claugus Family Farm filed writs of mandamus and prohibition with the Supreme Court to prevent the Seventh District from applying its tolling order to the farm, arguing it should’ve had notice of its inclusion and a right to argue it shouldn’t be involuntarily bound to be in the class. The Supreme Court accepted the appeals and combined both cases for consideration.

Lease Can Unfairly Extend Without Paying Royalties, Landowners Argue
The Hupp case centers on a portion of the lease contract known as a “habendum clause,” which has been a common element of oil and gas, and other mineral, leases for more than 100 years. The clause traditionally contains two segments: the primary term that states a particular length of time, and the secondary that may contain the terms “as long as” or such to indicate the lease can continue if the wells are producing and the landowners are receiving royalties. The other common element of a habendum clause is the right of the drillers to pay a “delay rental” to the property owners during the time of the lease. It requires the drillers to pay the landowner a nominal fee if they delay drilling activities based on market conditions or other factors that would prevent them from immediately drilling after signing a lease.

Attorneys for Hupp argue the G&T (83) form lease is crafted to give the illusion of the two traditional clauses. In reality, they charge, it allows Beck in its own judgment to go on for years paying a few hundred dollars a year with delayed rentals to the landowners without drilling and not paying the 12.5 percent royalty on the oil and gas profits if it were actually producing oil and gas. The provision at issue in the contracts reads:

“This lease shall continue in force and the rights granted hereunder be quietly enjoyed by the Lessee for a term of ten years and so much longer thereafter as oil or gas or their constituents are produced or are capable of being produced on the premises in paying quantities, in the judgment of the Lessee, or as the premises shall be operated by the Lessee in the search for oil or gas and as provided in paragraph 7 following.”

When combined with other provisions of the contract regarding the delay rental payments, the attorneys contend that Beck allows itself to go far past 10 years without drilling. “The lease purports to establish a timetable for development. However, under the language in the lease, Beck has the right to control all the oil and gas in or under all lessor’s property, and to develop the land or not for any reason or no reason, for a term that may extend in perpetuity as long as Beck, in its own judgment, believes that gas or oil is capable of being produced in paying quantities, and/or as long as Beck pays nominal delay rentals,” the brief states.

The attorneys cite the Ohio Supreme Court’s 1983 Ionno v. Glen-Gery Corp. decision where the Court ruled that oil and gas leases that don’t have a fixed term of time are perpetual leases and are void as against public policy. The attorneys argue not only was the trial court correct in finding the leases void because of a perpetual term that didn’t require them to drill, but was also in violation of an implied agreement in Ohio oil and gas contracts that the drillers would move to produce or terminate the lease.

Beck Argues It Has 10 Years to Drill
Attorneys for Beck (and XTO who asked to intervene in the case and filed an amicus curiae brief ) argue the Seventh District accurately interpreted the habendum clause of the contract and found it to be similar to those that have been in use in Ohio and other states for years. They note the G&T stands for the law firm Geiger & Teeple of Alliance, and that 83 indicates 1983, the year the form was developed. Beck’s attorneys argue that form has been used by it and other gas companies for years without anyone legally contesting its validity. They note the landowners in the case had been paid between $55 and $108 a year in delay rentals as the company prepares for future drilling. They point to the Seventh District’s finding that there is clearly a 10-year primary lease term in which it must commence drilling of a well to retain its rights to stay on the land. They argue the three landowners who sued initiated the suit between three and six years into their leases. They allege the landowners are seeking to void the leases because a competitor, Gulfport Energy, has offered to pay the landowners a bonus and a 20 percent royalty for signing over the land to it.

In the brief to the Court, they suggest one key provision the trial court misread about the lease was the term “capable of being produced on the premises, in the judgment” of Beck. They explain the court of appeals appropriately clarified that in the context of the contract “on the premises” didn’t mean on the land, but from a well drilled on the land. The only way Beck could use its judgment whether to continue to produce oil is if it drilled a well within 10 years, which is a fixed term, and not an illusion, they conclude.

“Due to recent Utica shale development, landowners now regret their contractual obligation with Beck Energy and ask the courts to declare their leases void as against public policy,” the brief reads.

Seventh District Defends Tolling Order
The question of the validity of the leases leads to the next issue facing the landowners and the drillers. If the Supreme Court holds the leases were valid, Beck argues it has been unfairly prevented from moving forward with drilling activities since October 2012 when it first asked the trial court to freeze the time it had left on the leases until the litigation was resolved. Beck, in the Claugus Family Farm brief, estimated that at least 84 leases on hundreds of acres expired while the court case was moving through appeals, and it lost the potential to earn millions of dollars drilling on the land. Beck also argued the Claugus Family Farm signed an agreement with Gulfport six months before its 10-year Beck lease was up in hopes of collecting a $470,000 signing bonus and 20 percent royalties. Claugus argued it was a “top lease” that was designed to take effect only after the Beck lease expired because of Beck’s inactivity. The farm also told the Supreme Court Gulfport cancelled the lease once it became aware that the farm had been made part of the class-action lawsuit and the Seventh District’s tolling order was effectively allowing Beck to control the mineral rights.

The Seventh District explained that Ohio Civil Rule 23(B)(2) allowed the trial court to grant class certification to all the Beck landowners with the same form lease, including Claugus Family Farm. And when the Seventh District reversed the trial court’s summary judgment ruling, it sent the case back to Monroe County to hear testimony and conduct further proceedings to determine if the contracts were valid. Attorneys for the Seventh District argue that gives the Claugus Family Farm the opportunity to intervene in the trial court case and have the trial court determine what rights the farm has as the case moves forward. The attorneys state that the writs are “extraordinary relief” and are only to be granted when those seeking it have no other remedies. Not only did the appellate court have the discretion to determine whether the class action could go forward, it also had the authority to issue the tolling order that in its view fairly preserved the rights of all the parties until the litigation concluded, they suggest.

Farm Suggests Unusual Circumstance Makes Tolling Unfair
Attorneys for the Claugus Family Farm contend that the civil rules can’t trump the due process rights the landowners have under the U.S. and Ohio constitutions. They argue the typical situation impacting a class-action lawsuit is that the plaintiffs sue and win a class action and then, as the defendants appeal, the plaintiffs are granted a tolling order to assure no rights are lost as they proceed to gather together and inform all the other potential members of the class. In this case, the attorneys argue, the relief is granted to Beck to give it more time to hold the farm’s land without drilling, even though the farm never asked to be in a class and has no right to get out of it. They characterized the tolling order as “a monstrous perversion of the principles of civil procedure” in a reply brief.  They contend Beck’s lease was coming to an end with the company having no plans that could demonstrate it would start drilling within the 10-year lease. Because of the lack of a plan, the tolling order and lack of a chance to opt out of the class action unfairly extended the time for Beck, they suggest. Unlike the three landowners who won in Monroe County, the farm isn’t disputing the validity of the lease. Rather, it’s arguing that its right to use its land has been delayed because those three landowners unfairly allowed 700 other properties to be included without adequate representation, the attorneys contend. “Extending the leases of the absent parties because of a ‘ludicrous’ lawsuit that the absent class members had no knowledge of (or control over) is not justice,” the brief states.

“Friend of Court” Briefs Filed
An amicus brief supporting the Beck and Seventh District positions has been submitted by the Ohio Oil and Gas Association and six other oil and gas companies. The association indicated that many companies use the G&T (83) lease or ones very similar and that “countlessly similar worded Ohio leases will be thrown into doubt” should the Supreme Court reverse the Seventh District.  American Energy – Utica LLC filed an amicus brief in the Claugus Family Farm case.

Time Allotted for Arguments
For the oral argument, the Court has granted attorneys for Hupp and Claugus Family Farms each nine minutes of oral arguments. Attorneys for Beck Energy and the Seventh District are also granted nine minutes each while XTO Energy is given four minutes.

- Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket (2014-1993 and 2014-0423).

Contacts
Representing Clyde A. Hupp, et al.: Richard Zurz; 330.762.0700

Representing the Claugus Family Farm L.P.: Daniel Plumly, 330.264.4444

Representing Beck Energy Corp.: Scott Zurakowski, 330.497.0700

Representing XTO Energy Inc.: Clair Dickinson, 330.535.5711

Representing the Seventh District Court of Appeals from the Ohio Attorney General’s Office: Sarah Pierce, 614.466.2862

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Is Damage Limit Unconstitutional for Sexually Abused Minors?

Jessica Simpkins, et al. v. Grace Brethren Church of Delaware, Case no. 2014-1953
Fifth District Court of Appeals (Delaware County)

ISSUES:

• Does R.C. 2315.18, which governs awards of damages for injuries or loss, violate the constitutional rights to due process, equal protection, trial by jury, and open courts and a remedy as applied to minors who are victims of sexual abuse?
• Were the acts of sexual battery separate “occurrences” for purposes of applying the damage cap for noneconomic losses in R.C. 2315.18?

BACKGROUND:
In 1988, Brian Williams became youth pastor at Grace Brethren Church of Delaware. While in that role, a teen girl reported to church officials that Williams had touched her inappropriately during a concert. In 2002, an 18-year-old woman met with Williams as part of applying for an international mission trip. Afterward, she informed Delaware Grace officials that Williams talked with her about his sex life with his wife and made other inappropriate and sexual comments at the meeting.

Delaware Grace’s leaders decided to start and fund another church in Sunbury, and Williams was chosen in 2004 as the senior pastor. Jessica Simpkins attended Sunbury Grace and met with Williams for a counseling session on March 6, 2008. She was 15 years old. Williams forced Simpkins to perform oral sex and, when she tried to leave, he forcibly had intercourse with her. She reported the incident to school officials the next day.

Williams was arrested, and he pled guilty to two counts of sexual battery. The court sentenced him to eight years in prison.

Family Files Civil Suit
Simpkins and her father filed a lawsuit against Delaware Grace alleging in part that the church was negligent by keeping Williams as an employee and then hiring him as senior pastor at Sunbury Grace despite the reported misconduct with two other teenagers.

The jury found in June 2013 that Delaware Grace knew of Williams’ sexual misconduct with the two other teens and didn’t document or conduct a proper investigation of those incidents. The jury awarded damages to Simpkins and her father -- $1,378.85 for past economic damages, $150,000 for future economic damages, $1.5 million for past noneconomic damages, $2 million for future noneconomic damages, and $75,000 to her father for harm to their relationship. The trial court then reduced the award. Because of an earlier settlement with Sunbury Grace, the court eliminated the $1,378.85 past economic award. And, based on the caps set out in R.C. 2315.18, the court cut the noneconomic damages from a total of $3.5 million to $350,000. Following a motion by Delaware Grace, the court further reduced the amount given for future noneconomic damages.

Delaware Grace appealed the ruling to the Fifth District Court of Appeals, and the Simpkinses filed a cross-appeal. The Fifth District reversed the trial court’s decision denying a claim for punitive damages. But the appeals court also rejected the Simpkinses’ claims that the damage caps in the statute are unconstitutional as applied to Jessica Simpkins and that she suffered more than one assault. The Simpkinses appealed, and the Ohio Supreme Court agreed to consider those two issues.

Court Earlier Ruled Statute Was Constitutional On Its Face
In Arbino v. Johnson & Johnson (2007), the Ohio Supreme Court considered whether the caps on noneconomic damages described in R.C. 2315.18 and enacted in tort reform legislation were constitutional “on its face,” which means as applied to everyone. The Court upheld the statutory limits on these damages for injuries or losses to person or property, though allowed for the exceptions provided in the statute. Those exceptions place no caps on noneconomic damage awards if a person suffers a physical deformity, loses use of a limb or bodily organ system, or is physically injured in a way that prevents the ability to care for oneself and perform life-sustaining activities.

Law Is Unconstitutional as Applied to Juvenile Sex-Abuse Victims, Simpkins Asserts
Attorneys for the Simpkinses argue that the damage limits in R.C. 2315.18 violate multiple constitutional rights when applied to juveniles who are victims of sexual abuse. The Simpkinses’ attorneys expect the Court to apply a rational-basis analysis to these constitutional challenges, and they explain that a law doesn’t infringe on due process protections under that analysis if the statute has a real and substantial relation to the public’s welfare and it isn’t unreasonable or arbitrary.

They note that sexual abuse typically results in more emotional damage than physical injury or economic harm. These types of injuries are just as real as those that have no limits on damages, and minors who are sexually abused often spend a lifetime dealing with the fallout, they contend. In this case, Simpkins testified that she at times stopped going to high school classes, she fears the dark and being alone, and struggles in her dating relationships with men. She stated that she recalls the events of that day three or four times a week and hesitates to go to therapy. A psychologist diagnosed her with post-traumatic stress disorder, chronic mild depression, alcohol abuse, and dependent and avoidant behavior, and stated that Simpkins needs long-term treatment to cope with her emotional injuries.

The Simpkinses’ attorneys assert in the brief to the Court that these damage caps aren’t related to the public welfare because “Ohio’s most vulnerable citizens” are prevented from receiving fair compensation for their injuries.

And, “[r]ecognizing, as this Court has, that minors have a special status in tort law and further recognizing that minors suffer a disproportionate number of sexual assaults and will bear the effects of a sexual assault for a lifetime, it is also arbitrary and unreasonable for the legislature, by fiat, to strip ninety percent of the award that a jury, after fully considering the evidence, deemed appropriate to fully compensate Jessica for her noneconomic injuries,” they write.

They contend that altering a jury’s findings is an infringement on the victim’s constitutional rights. They assert that the ruling in Arbino on this issue was wrongly decided and that the statute arbitrarily and unconstitutionally overrules the determinations made by juries.

The law also violates equal protection, they maintain, because it treats those with catastrophic nonphysical injuries differently than those with catastrophic physical injuries. In addition, they contend that the law irrationally bases the noneconomic damage cap on the amount of economic damages caused. Child sexual abuse victims rarely experience economic losses outside of limited medical bills, but still may experience severe and permanent noneconomic damages, they argue. Also, because Simpkins will have to pay litigation expenses and attorney fees out of the damages award, they assert that she has been denied a meaningful remedy in her case.

Church Contends Emotional, Noneconomic Injuries Too Hard to Measure
Attorneys for Delaware Grace respond that the legislature passed tort reform measures such as R.C. 2315.18 to limit large awards based on noneconomic injuries, which have been considered subjective, uncertain, and difficult to quantify.

They counter that the statute’s caps on these damages benefit Ohio’s economy by creating a fairer and more predictable civil justice system and, therefore, are related to the public welfare. They also argue that the legislature’s distinction between physical and nonphysical injuries is within its authority and isn’t arbitrary or unreasonable. While the Simpkinses’ attorneys maintain her injuries are comparable to catastrophic physical injuries, Delaware Grace’s counsel contend that the factual record doesn’t support that view. They point to the fact that she graduated from high school, attended and got good grades in college, played basketball at both levels, and sought little counseling after Williams assaulted her. They conclude that her emotional injuries aren’t on par with the extreme physical injuries excepted in the law from the damage limits. As a result, the law doesn’t violate her due process protections, they argue.

They add that Arbino determined that R.C. 2315.18 didn’t violate equal protection rights because the law had reasonable justification and a legitimate government purpose. They note that the Arbino Court ruled that courts may apply the statute’s limits as a matter of law to jury awards without constitutionally infringing on the jury’s findings and the right to a trial by jury. The same conclusion applies in this case, they maintain.

Also because Simpkins will still receive some portion of the jury award under the law, they assert that she hasn’t been denied a meaningful remedy, even considering the costs of litigation and attorneys. Ohio law requires parties to pay attorney fees and litigation costs in most situations, they note.

“Jessica Simpkins was the victim of a horrific crime,” they write in the brief to the Court. “Reasonable people can disagree on whether the noneconomic damages of tort claimants who have sustained emotional distress without accompanying physical injury and without having incurred significant economic loss should be capped by statute. But that decision was made by the General Assembly in 2005.”

Parties Disagree About Number of Occurrences
If the Court finds that R.C. 2315.18 is constitutional as applied to Simpkins, her attorneys argue she should be permitted to recover damages for each of the two counts of sexual battery, allowing a maximum noneconomic damage award of $700,000, instead of $350,000, total. They argue that the teen was violated twice in two different ways.

Delaware Grace’s attorneys maintain that it’s the church’s acts or omissions that determine the number of occurrences. In this case, the Simpkinses alleged that the church was negligent in promoting Williams to senior pastor at Sunbury Grace, which Delaware Grace’s attorneys argue was one occurrence. In addition, they assert, the two sexual battery counts reflect one occurrence because they took place in a short period of time in a confined geographic space and without any intervening factors.

Additional Briefs
Amicus curiae briefs supporting the Simpkinses’ position have been submitted by the National Center for Victims of Crime and the Ohio Association for Justice.

The Academy of Medicine of Cleveland and Northern Ohio has filed an amicus brief supporting Delaware Grace. Also supporting the church in a joint brief are the Ohio Alliance for Civil Justice and the Ohio Association of Civil Trial Attorneys.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing Jessica and Gene Simpkins: John K. Fitch, 614.545.3930

Representing Grace Brethren Church of Delaware, Ohio: William C. Curley, 614.280.0200

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Do Juveniles Have Same Double Jeopardy Protections as Adults?

In re: A.G. A Minor Child v. State of Ohio, Case no. 2014-2190
Eighth District Court of Appeals (Cuyahoga County)

ISSUE: Should two offenses merge in juvenile court to protect a child’s right against double jeopardy if they would have merged in adult court?

BACKGROUND:
In June 2012, 15-year-old A.G. pointed a gun at a man and told him to get into his car. The victim ran from the scene; police later found a fingerprint on his car matching A.G.’s. A.G. was charged in juvenile court of aggravated robbery and kidnapping with a firearm specification on each count. The juvenile court merged the firearm specifications but entered separate sentences for aggravated robbery and kidnapping. The court imposed consecutive sentences for a total minimum period of three years (one year each for aggravated robbery, kidnapping, and the firearm specification) and a maximum sentence where A.G. would be released by his 21st birthday.

A.G. appealed the sentence to the Eighth District Court of Appeals and contended the juvenile court violated his double jeopardy rights. He argued that his aggravated robbery and kidnapping charges should’ve been merged, as it would have been in adult court according to R.C. 2941.25. He stated the crimes were allied offenses and the court should treat them as one offense for sentencing.

The appeals court rejected A.G.’s argument in a unanimous decision. The judges concluded because A.G. was subject to the juvenile code, R.C. 2941.25 didn’t apply to him and therefore his sentences can be imposed consecutively. The Eighth District also stated that while children are subject to the same double jeopardy protections as adults, “this does not mean that juveniles are constitutionally entitled to the same greater statutory protections afforded adults when it comes to consideration of allied offenses for double jeopardy purposes.”

A.G. appealed and asks the Ohio Supreme Court to reverse his sentence and remand for resentencing. The Supreme Court agreed to hear the case.

A.G.’s Argument
Attorneys for A.G. argue that his aggravated robbery and kidnapping convictions should have been merged in accordance with State v. Johnson (2010). They state that because children are entitled to the same double jeopardy protections as adults, the merger analysis in Johnson should apply to juvenile proceedings. The merger analysis determines that “if the offenses correspond to such a degree that the conduct constituting commission of one offense constitutes commission of the other, then the offenses are of similar import” and can be merged during sentencing.

They state that the appeals court decision “creates a system wherein juvenile and common pleas courts in Ohio must utilize different analyses to determine if offenses should merge” leading to different sentences in juvenile courts across the state.

They claim the Supreme Court should overturn the lower court’s ruling and merge his aggravated robbery and kidnapping convictions for resentencing because of the Double Jeopardy Clause, where he shouldn’t be punished twice for the same crime. If Johnson isn’t applied, the attorneys determined, juveniles would “serve consecutive commitments for offenses that arose out of the same conduct, committed with a single state of mind, and in blatant violation of their right to be free from double jeopardy when their adult counterparts would not.”

State’s Answer
The state argues that the Court only needs to determine if R.C. 2941.25 applies in juvenile proceedings and not whether A.G. was convicted of allied offenses of similar import.

The state notes in the brief to the Supreme Court that the appeals court determined “the language of the Double Jeopardy Clause in both the United States and Ohio Constitutions does not protect a person from being sentenced or punished for allied offenses of similar import.”

R.C. 2941.25 shouldn’t apply in the juvenile court, the state claims, because “juveniles would still be afforded their constitutional rights under the Double Jeopardy Clause of the United States and Ohio Constitutions.” The state believes there is no double jeopardy violations because “when multiple punishments are imposed in the same proceeding, the Double Jeopardy Clause does no more than prevent the sentencing court from prescribing greater punishment than the legislature intended” (State v. Rogers, 2015) and because the General Assembly didn’t intend R.C. 2941.25 for juvenile proceedings. The state wants the Court to affirm the Eighth District’s ruling.

- Jenna Gant

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing A.G.: Charlyn Bohland, Ohio Public Defender’s Office, 614.466.5394

Representing the State of Ohio from the Cuyahoga County Prosecutor’s Office: T. Allan Regas, 216.443.7800

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