Bookmark this page on your mobile

QR Code image

What is this?

Daily Court Reporter - News Lawsuit over workers’ compensation fees must move to court of claims

 

Lawsuit over workers’ compensation fees must move to court of claims

Dan Trevas, Supreme Court of Ohio

A class-action lawsuit filed in 2010 against the Ohio Bureau of Workers’ Compensation (BWC) seeking the return of administration fees collected by a bank was improperly filed and must be pursued in the Ohio Court of Claims, the Ohio Supreme Court ruled recently.

The Supreme Court determined that the lawsuit filed by workers’ compensation recipient Michael Cirino seeks a form of legal relief, rather than equitable relief. The Court majority sided with the BWC, which argued that the Cuyahoga County Common Pleas Court did not have jurisdiction to hear Cirino’s case because the bureau only can be sued for a legal claim in the Ohio Court of Claims in Columbus.

In the Court’s lead opinion, Chief Justice Maureen O’Connor wrote that the crux of Cirino’s class-action claim is that workers’ compensation benefit recipients were harmed by fees charged by JP Morgan Chase in the course of administering an electronic benefit-payment program for the BWC. Because Cirino is asking the bureau to pay back the money Chase collected, he is asking the bureau to compensate the plaintiffs for a loss, which is “a classic form of legal relief,” the Court ruled.

Justices Patrick F. Fischer and Mary DeGenaro joined the Chief Justice’s opinion.

In a concurring opinion, Justice R. Patrick DeWine also agreed with the bureau, noting that Cirino’s claim was for legal relief rather than equitable relief because he was not seeking restitution of particular funds held by the bureau.

Justices Sharon L. Kennedy and Judith L. French joined Justice DeWine’s opinion.

Justice Terrence O’Donnell dissented, writing that in two similar cases where the BWC and another state agency were found to be improperly withholding and recouping money from recipients, the suits were deemed equitable and permitted to proceed in common pleas court.

Mandated Switch from Check to Electronic Payments Prompts Dispute

Before 2006, BWC paid benefits by either paper check or electronic funds transfer into a recipient’s bank account. The General Assembly gave the bureau the authority to all but end the distribution of paper checks in favor of expanding reliance on electronic transfers, including through debit cards. It authorized the bureau to contract with “an agent” to issue the cards to benefit recipients and administer the program. Regardless of which payment method the bureau used, it was required to pay all “administrative costs” under R.C. 4123.341.

Chase was selected in 2006 to administer the debit card program. The bureau would transfer funds to Chase, which set up accounts for each workers’ compensation recipient who was not enrolled in direct deposit. The agreement provided participants with several methods to access the funds. Some were free, while others required a fee. For example, one free visit to a teller at a Chase branch was permitted each month, but after that visit, a $5 fee was charged for every subsequent visit that month.

Cirino began receiving workers’ compensation benefits in 2009 and was entitled to $443 a week, which was paid to him in a biweekly amount of $886. He received his first few payments by paper check, and then was notified to switch to an electronic method. Cirino declined to give the BWC his bank account information, which was required for him to receive payments by direct deposit, so he was enrolled in the Chase-operated debit card program.

Cirino visited a Chase branch to withdraw in cash his first bimonthly payment. When he returned two weeks later to withdraw his second, he was told there would be a $5 fee. Cirino then spoke to an attorney and continued to withdraw his benefits by visiting a teller, incurring numerous $5 fees. In 2010, he filed a class-action lawsuit against the bureau on behalf of all recipients of BWC benefits who were charged fees to access their benefits.

Suit Filed in County Court

Cirino filed his case in Cuyahoga County Common Pleas Court, arguing that the debit card program violates R.C. 4123.341 because the workers, not the state and the employers that fund the BWC, are paying “administrative costs” when fees are charged by Chase.

The bureau sought to dismiss the case for lack of jurisdiction and argued that because Cirino is ultimately asking the state to pay back the money withheld by Chase, he is seeking legal relief. Claims for legal relief against the state are within the exclusive jurisdiction of the Court of Claims, which was established in 1975 to handle most lawsuits against the state where the state is not protected by immunity.

The trial court, citing the Ohio Supreme Court’s 2004 Santos v. Ohio Bur. Of Workers’ Comp. decision, ruled that a suit seeking the return of specific funds wrongfully collected or held by the state is an equitable claim, and that common pleas courts have the right to hear equitable claims. It found that Cirino was seeking specific funds — the money Chase withheld from his benefits for the fees — and that Chase is an agent of the BWC acting on behalf of the state, so the funds are essentially in the hands of the bureau.

The BWC appealed the decision to the Eighth District Court of Appeals, which affirmed the trial court’s decision. The BWC then appealed to the Supreme Court, which agreed to hear the case.

Court Examines Nature of Worker’s Claim

In her lead opinion, Chief Justice O’Connor wrote the Court needed to determine whether the relief Cirino sought was equitable or legal. The opinion noted a common pleas court may hear claims against the state that are equitable in nature, typically in the form of a declaratory judgment or an injunction. Suits for money damages, however, are within the exclusive jurisdiction of the court of claims.

The opinion noted that a claim seeking compensation for a loss is one that seeks money damages, whereas a claim seeking the return of specific funds seeks restitution, which can be either legal or equitable in nature. The opinion found that Cirino’s claim is arguing that the plaintiffs have been damaged by the fees charged by Chase, meaning that a payment by the bureau based on those fees is seeking compensation for a loss. Cirino’s claim is legal in nature, which means it may only be pursued in the Court of Claims, the Court concluded.

The opinion also stated that the case is distinct from Santos, in which the bureau held money taken directly from recipients, who sought the return of the specific funds taken by the BWC, making their claim equitable.

“The only specific funds identified by Cirino are the fees collected by Chase, not any money withheld by the bureau,” the opinion stated.

The opinion also declined to rely on the argument that the claim is equitable because Chase is the bureau’s agent.

The Court reversed the Eighth District’s decision and directed the common pleas court to dismiss the case.

Concurrence Focuses on Fund Location

In his concurrence, Justice DeWine maintained the focus on the form of relief sought in a claim against the state “invites inconsistent results and provides little guidance to lower courts.” He suggested the case can be resolved more cleanly by focusing on the location of the specific funds Cirino seeks.

The opinion explained that Cirino’s benefits were in the possession of the BWC until they were transferred to Chase. The “particular funds” Cirino seeks are not in the possession of the BWC, it explained. Any remedy due Cirino would not come from particular funds held by the BWC, but rather from the bureau’s general funds. That makes his claim one of legal relief and belongs in the Court of Claims, the opinion concluded.

Dissent Finds Similarity to Prior Ruling

In his dissent, Justice O’Donnell wrote that in Santos the Court determined the suit was in equity. As in that case, Cirino does not seek a substitute payment from the bureau, but instead seeks the funds unjustly withheld through the bureau by its agent, Chase, in the form of a fee.

He also noted the Court’s 1991 Ohio Hosp. Assn. v. Ohio Dept. of Human Servs. case where the Ohio Department of Human Services implemented a new rule that lowered Medicaid reimbursement rates. Several Medicaid providers filed a case seeking equitable relief in common pleas court. The Court invalidated the rule and found the money withheld from reimbursement that the providers sought was not money damages, but equitable relief.

“Because Cirino’s claim seeks the full monthly benefit of his award, the administrative costs assessed by Chase are costs of administering the benefits program to be borne by the state. Thus, this is an equitable claim and therefore the common pleas court, not the Court of Claims, has jurisdiction in this case,” the dissenting opinion concluded.

2017-0179. Cirino v. Ohio Bur. Of Workers’ Comp., Slip Opinion No. 2018-Ohio-2665.

The opinion can be read online at: http://www.courtnewsohio.gov/cases/2018/SCO/0710/170179.asp#.W0S7LLgnaUk

Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion, but only for noteworthy cases. Opinion summaries are not to be considered as official headnotes or syllabi of court opinions. The full text of this and other court opinions are available online.

Date Published: July 30, 2018

 

Supreme Court of Ohio

 

Air Force updates to AFI-36-2903, dress and personal appearance

The Air Force announced a series of uniform updates to Air Force Instruction 36-2903, Dress and Personal Appearance of Air Force Personnel, effective July 13, 2018.

Attorney General Sessions announces “operation synthetic opioid surge”

Montgomery County identified as one of ten counties targeted in nationwide “enforcement surge”.

Cincinnati Right to Life to protest Planned Parenthood

Join Cincinnati Right to Life and several on campus Students for Life groups to speak out against Planned Parenthood hosting a fundraiser in a former Catholic Church (now a brewery called Urban Artifact) in Northside. We will meet at Wildfire Pizza Kitchen between 7:00pm and 7:30pm. Signs and t-shirts will be available for anybody who wants them.

Montgomery County sales tax & the general fund

Please review the materials that outline the County Administrator's proposal to adjust the Montgomery County Sales Tax from 1.0% to 1.25%. Following a public education session in April and two public hearings in June, the Montgomery County Commissioners unanimously voted in favor of the sales tax increase. The new rate will take effect on October 1, 2018.

Record heights for Warren County tourism industry

Warren County’s tourism economy accounted for a record $1.24 billion in total annual sales in 2017, according to a new study just released by Tourism Economics and the Ohio Tourism Division. That figure - which represents a growth rate of 6.5 percent from the previous study in 2015 - was spurred by an influx in visitation, as the county welcomed a record 12 million visitors in 2017.

UD golf places 7 on MAAC Academic Honor Roll

The University of Dayton women's golf team placed seven student-athletes on the Metro Atlantic Athletic Conference Academic Honor Roll as announced by the MAAC office on Tuesday.

WSU’s Wampler to travel to São Paulo, Brazil

Bill Wampler, a junior for the Wright State University men's basketball team, will be one of 10 players set to represent the United States at the upcoming FISU America Games in São Paulo, Brazil.

Supreme Court of Ohio to determine whether jail-time credit can be earned for one crime while the defendant is jailed for another

The Ohio Supreme Court on Tuesday, July 17th, heard four oral arguments, including an appeal from the Geauga County Prosecutor’s Office regarding whether a person can earn jail-time credit from one offense when in jail on a separate charge.

Seven charged in methamphetamine trafficking conspiracy

A federal indictment unsealed recently charges seven people with engaging in a methamphetamine trafficking conspiracy in the Miami Valley and across southern and central Ohio.

PUCO seeks comment on AT&T Ohio application to end discount program

The Public Utilities Commission of Ohio (PUCO) recently issued a call for comments regarding AT&T Ohio’s application to discontinue its participation in the federal Lifeline program throughout the majority of its service territory. Comments are due Aug. 31, 2018.

Supreme Court of Ohio to determine whether a nursing home can sue widow to pay for her deceased husband’s outstanding bill

The Ohio Supreme Court on Wednesday, July 18th, heard three oral arguments, including an argument from Cora Bell whose husband moved into a Carlisle skilled nursing care facility in January 2014 and died in May of that year. Embassy Healthcare, which operates the nursing home, sent a letter to Bell in November about an outstanding bill of $1,678 for her husband’s care without first submit its claim to her husband’s estate.

How to reduce college costs while in high school

Focused on your family’s future, you’ve been dutifully saving for your child’s higher education expenses in Ohio’s 529 Plan, CollegeAdvantage. Meanwhile, you keep reading articles showing that college costs are rising. As well as saving in a tax-advantaged 529 plan, your family can take additional steps to reduce higher education expenses before your student heads off to college. In fact, your child can even earn college credits while still in high school.

PUCO offers tips to prepare for a power outage

This summer, the Public Utilities Commission of Ohio (PUCO) is reminding consumers of important outage preparation information. While the electric distribution system in Ohio is typically safe and reliable, weather conditions such as thunderstorms, high winds or tornados can cause service interruptions. The PUCO offers these tips for being prepared in the event electric customers experience an outage.

Ohio man sentenced for defrauding 44 clients out of more than $1.4 million

Defendant pretended to be former Navy SEAL

Grove City lawmaker wants to rid pet food sources of euthanasia drug

Lawmakers in the Ohio House of Representatives recently heard testimony on a bill meant to protect our four-legged friends from a deadly drug that has shown up in commercial dog and cat foods.

Attorney disbarred for failing to appeal client’s conviction

The Ohio Supreme Court recently permanently disbarred a Cleveland attorney for violating several professional conduct rules, including failure to file an appeal of his client’s criminal conviction that he had promised to submit.

Take control of your social media experience in 3 easy steps

(BPT) Does all this talk about data and sharing on social media have you confused? Is your feed too noisy and you're not seeing posts from the people and brands you care about? Social media should be a fun place for you to have meaningful interactions with friends and family. Here are three simple steps to block the distractions and have more control over your social media experience.

Auditor’s report urges school districts to adopt policies to govern use of online fundraising

Across Ohio, hundreds of teachers are using crowdfunding – online fundraising – to generate donations to provide materials to enhance the educational experience of their students. A new report and survey from Auditor of State Dave Yost found that many school districts do not have policies to guide teachers and administrators on how to use crowdfunding properly. The report provides best practices for districts considering these policies.

Dayton area attorney receives stayed suspension

A Dayton area attorney received a six-month stayed suspension from the Ohio Supreme Court recently for his conduct related to the disputed representation of a client.

Libertarian Party of Ohio secures minor party status

The Ohio Secretary of State’s Office recently announced that a committee seeking minor party status for the Libertarian Party of Ohio has met the necessary requirements.