national workers’ compensation defense network

June, 2008 ohio update

 

 

Attorney General Marc Dann Resigns:

 

In the wake of allegations of sexual misconduct and other indiscretions, Marc Dann resigned on May 14, 2008, admitting to an extra-marital affair with an office aide and inappropriate conduct by his senior staff.  Governor Ted Strickland has appointed Nancy Hardin Rogers, who has taken leave from her position as the Dean of Moritz College of Law at the Ohio State University, as Ohio Attorney General until a new one is elected in November, 2008.  Dann was elected in 2006 on a platform of cleaning out the “culture of corruption” in state government, particularly emphasizing the “Coin Gate” investment scandal at the Ohio Bureau of Workers’ Compensation during the Administration of former Governor Bob Taft. 

 

RECENT COURT DECISIONS OF NOTE:

 

Federal Preemption of State Common Law Employer Intentional Tort Claims

 

Talik v. Fed. Marine Terminals, Inc. (March 13, 2008), 117 Ohio St.3d 496.

 

The employee worked as a longshoreman for the employer, and he was injured when a stack of pipes that he was loading collapsed on his leg. It was undisputed that the employee was covered by the Longshore and Harbor Workers’ Compensation Act (LHWCA), a federal compensation scheme.  Because the employer was obligated to pay into the State Fund according to the Workers’ Compensation Law of Ohio (R.C. 4123.35) and to provide insurance pursuant to the LHWCA (33 U.S.C.S. § 932(a)), the employee had his choice as to under which statutory scheme he could claim benefits. The employee received benefits from the State Fund, and thereafter filed a “substantial certainty” employer intentional tort action in the Cuyahoga County Court of Common Pleas, which resulted in a grant of summary judgment to the employer based on the preemption of 33 U.S.C.S. § 905(a). The Court of Appeals reversed that decision, finding that there was no preemption to the employer intentional tort claim. On further review, the Supreme Court noted that Congress did not expressly preempt the intentional tort standard in Ohio, based on the language of the LHWCA. However, preemption applied in order to avoid inconsistency with the central purpose underlying the LHWCA of creating a uniform compensation system. Accordingly, the court concluded that the LHWCA preempted the substantial certainty employer intentional tort claim pursuant to 33 U.S.C.S. § 905(a). 

 

 

Temporary Total Disability

 

State ex rel. L.P. Cavett Co. v. Indus. Comm. (April 2, 2008), 118 Ohio St.3d 157.

An employee's initial workers' compensation claim was allowed for a sprain of the lumbar region and disc herniation. Thereafter, the conditions were declared to have been maximally medically improved. The employee was later evaluated by a psychologist who opined that he suffered from “post-traumatic stress disorder” and “major depression” as a result of the industrial injury. The employer then had him examined by a second psychologist who characterized the worker’s condition as a “depressive disorder.”  Based on these evaluations, the Industrial Commission additionally allowed the claim for “depressive disorder.” After a District Hearing and the employer’s appeal to a Staff Hearing Officer, the Commission also granted TTD benefits based solely on the depressive disorder.  This was based in part on the first psychologist’s opinion that the employee was temporarily and totally disabled based on “depressive disorder,” a diagnosis that he had not specifically made in his evaluation. The employer requested a writ of mandamus claiming that the TTD award was an abuse of discretion because the psychologist was bound by his prior diagnoses of PTSD and major depression and could not find TTD based on “depressive disorder.”  The appellate court denied the employer's request for the writ and the Supreme Court affirmed, finding that the Commission did not abuse its discretion in finding that the two reports of the psychologist could be reconciled to support the TTD award because the reports merely involved a variance in degree of depression.

 

 

 

“Last Injurious Exposure” Principle

 

State ex rel. Pilkington N. Am., Inc., v. Indus. Comm. (April 3, 2008), 118 Ohio St.3d 161.

 

An employee was exposed to asbestos for much of the time that he worked for the employer. The employer was insured under the State Fund for the first 23 years of the employee’s tenure with the company, but thereafter the employer became self-insured for the remaining 18 years that the employee worked for the employer. After the worker was diagnosed with mesothelioma, his claim for an occupational disease was allowed against the employer’s self-insured risk under the "last-injurious-exposure principle." The employer sought a writ of mandamus, alleging that the Commission erred in assigning workers' compensation liability to it rather than to the State Fund. The Court of Appeals agreed and ordered the Commission to issue an amended order that appropriately determined allocation of risk liability. However, on review, the Supreme Court held that the Court of Appeals improperly limited the last injurious exposure rule based on an incorrect reading of a controlling precedent, State ex rel. Erieview Metal Treating Co. v. Indus. Comm., 109 Ohio St.3d 147.

 

 

Average Weekly Wage and the “Special Circumstances” Provision

 

State ex rel. Ohio State Univ. Hosp. v. Indus. Comm. (April 30, 2008), 118 Ohio St.3d 170.

 

The Industrial Commission used the special circumstances exception to the standard formula for calculating an injured employee's average weekly wage, R.C. 4123.61, to increase the employee's average weekly wage based on the proximity of the employee’s date of injury to her re-entry into the workforce. The employee was injured only 8 weeks after her re-entry into the workforce following a stint of part-time employment while she was recovering from a different injury and a period of no employment due to full-time enrollment in a radiology technology program at a hospital during the year prior.  The Supreme Court affirmed the Industrial Commission’s decision to calculate the employee’s wages based on the 8 weeks worked prior to the injury in order to do the employee substantial justice because the standard AWW calculation was not a just barometer of the wages lost due to her injury.  Using the standard calculation without excluding the weeks of part-time employment and weeks of schooling was found to be inconsistent with the purpose of average weekly wage—to find a fair basis for award for the loss for future compensation.

 

Subject Matter Jurisdiction in Claims for Restitution 

 

Cristino v. Ohio BWC (May 7, 2008), 118 Ohio St.3d 151.

 

After BWC paid the recipient a lump sum for the lifetime permanent and total disability benefits he was entitled to, he alleged the bureau improperly calculated the present value of his claim.  He sought the difference between what he had been paid and the claim's "true" present value. The Supreme Court held the basis for his action was his agreement with the Bureau of Workers’ Compensation. The worker had sought a lump-sum payment in lieu of payments provided in the statutory formula in R.C. 4123.58(A), but there was no statutory right to a lump-sum payment. The difference between the form of relief he sought and the form of benefits described in R.C. 4123.58(A) showed he did not seek to enforce a statutory right. His restitution claim was, therefore, not a claim to enforce his statutory right, so a court of common pleas lacked subject matter jurisdiction.  The Ohio Court of Claims had exclusive jurisdiction.

 

 

 

WHAT’S NEW AT THE INDUSTRIAL COMMISSION OF OHIO:

 

“Substantial Aggravation” Standard

 

On May 5, 2008, the Industrial Commission of Ohio published Memo A5, which documents its position on allowance of claims pursuant to the “substantial aggravation” standard.  First of all, Memo A5 requires that orders which allow a claim based on an aggravation standard must specify the standard of aggravation applied in the claim.  For claims with dates of injury or disability on or after 10/11/06, the hearing officer should state that the claim is either allowed or disallowed pursuant to the “substantial aggravation” of a pre-existing condition.  This standard and timeline also applies to issues of abatement.  Furthermore, Memo A5 requires that the hearing officer also cite to medical records which support the “substantial aggravation” claim by objective diagnostic findings, objective clinical findings, or objective test results.  The determination of “substantial aggravation” is a legal finding and not a medical one, so while the objective medical evidence need not specifically contain an opinion as to substantial aggravation, the evidence relied upon must comport to the necessary documentation as indicated by R.C. 4123.01(C).

 

WHAT’S NEW AT THE OHIO BUREAU OF WORKERS’ COMPENSATION:

 

System for Establishing Reserves for Use in Setting Premium Rates

 

R.C. 512.70 requires the Administrator of Workers’ Compensation to completely transition from use of the Micro Insurance Reserve Analysis System (MIRA I) to a different system or different version of the system for establishing reserves for use in establishing premium rates before June 30, 2008.  The new system is to be “transparent in nature.”

 

The BWC has announced its intention to introduce a new system, MIRA II, which will come into effect on July 1, 2008.  The primary goals of the new system are to achieve greater accuracy and to realize greater clarity with regard to the BWC’s Reserving System.  The BWC believes that the following changes and improvements that will be implemented in MIRA II will allow the Bureau to meet its objectives:  (1) using more accurate historical data, (2) using regularly updated data, (3) MIRA II will reflect improved claim management techniques employed by the BWC, MCO’s and TPA’s, (4) it will reflect improved statistical analysis, and (5) it will be more responsive and reflective of the Ohio Workers’ Compensation system.