Summary
In Wean Inc. v. Indus. Comm., 52 Ohio St.3d 266 (1990), the Supreme Court concluded that the application of the 1986 amendments to claims with injury dates prior thereto was not unconstitutional retroactively because the amendments only required the self-insured employer to pay a "current responsibility."
Summary of this case from State v. Indus. Comm'n of OhioOpinion
No. 89-1006
Submitted May 29, 1990 —
Decided July 25, 1990.
Workers' compensation — Payroll assessments for Disabled Workers' Relief Fund — R.C. 4123.411(C), as amended August 22, 1986, does not violate the retrospective provision of Section 28, Article II of the Ohio Constitution.
O.Jur 3d Workers' Compensation § 378.
R.C. 4123.411(C), as amended August 22, 1986, does not violate the retrospective provision of Section 28, Article II of the Ohio Constitution.
APPEAL from the Court of Appeals for Franklin County, No. 88AP-955.
The Disabled Workers' Relief Fund ("DWRF") was created in 1953 by the General Assembly to provide a subsidy to qualifying recipients of workers' compensation. To qualify, an employee, pursuant to R.C. 4123.412 through 4123.414, must be permanently and totally disabled as a result of occupational injury or disease and one whose workers' compensation benefits, when combined with Social Security Act disability payments, fall below a statutorily mandated amount.
From 1953 to 1959, DWRF generated its funds from the state's general revenues. In 1959, the General Assembly, pursuant to R.C. 4123.411, altered the plan of financing the program and provided for an employer payroll assessment. R.C. 4123.411 provided, in its original form, that appellant Industrial Commission of Ohio ("commission") levy an assessment against all amenable employers in January of each year and that the rate was not to exceed three cents per hundred dollars of payroll. The commission's authority to maintain and administer the DWRF is derived from Section 35, Article II of the Ohio Constitution.
Since 1959, R.C. 4123.411 has been amended on numerous occasions. For instance, in 1975, the statute was amended increasing the employer payroll assessment from a maximum of three cents to five cents per one hundred dollars of payroll. When assessments were found to be insufficient, investment income from the State Insurance Fund was provided, a funding procedure approved by this court in Thompson v. Indus. Comm. (1982), 1 Ohio St.3d 244, 1 OBR 265, 438 N.E.2d 1167.
In 1980, the assessment was again increased to a minimum of five cents but not to exceed ten cents per one hundred dollars of payroll. This assessment was to be apportioned among four classes of employers: (1) private fund, (2) counties and taxing districts, (3) the state, and (4) self-insurers.
In 1986, the General Assembly decided once again to change the funding plan. Effective August 22, 1986, R.C. 4123.411(A) was amended to remove self-insured employers as one of the four classes established in 1980. In addition, R.C. 4123.411(C) provided that self-insured employers shall be liable for the full amount of DWRF payments to qualified employees "regardless of the date of injury." The DWRF payment is made by appellant Ohio Bureau of Workers' Compensation ("bureau") to the qualifying employee, after which the bureau collects the payment from the self-insured employers.
On March 1, 1971, appellee, Wean Incorporated ("Wean"), became a self-insured employer and began paying workers' compensation benefits directly to qualified employees. Prior to 1986, Wean was subject to a DWRF assessment of five cents per one hundred dollars of payroll. However, as a result of the August 22, 1986 amendment, R.C. 4123.411(C) requires Wean to reimburse the bureau dollar-for-dollar for amounts paid to those employees who qualify for DWRF payments. All parties agree the statutory change has caused Wean to experience an increase in DWRF payments.
On May 18, 1988, Wean filed a complaint in the Court of Common Pleas of Franklin County seeking a declaratory judgment as to its rights and obligations to the DWRF. Appellants and Wean each filed motions for summary judgment. Wean, in its motion for partial summary judgment, urged the trial court to find that R.C. 4123.411(C) should not apply retroactively and, as applied, the statute violates Section 28, Article II of the Ohio Constitution.
On September 29, 1988, the trial court overruled Wean's motion and granted appellants' motion. The trial court, in holding the statute constitutional, stated: "* * * Changes in the funding mechanism of DWRF are not violations of the principle that a worker's rights and benefits are fixed on the date of injury."
Due to the trial court's ruling, Wean voluntarily dismissed the remaining claims not addressed in its motion for summary judgment and appealed to the court of appeals. The court of appeals reversed and remanded. The court of appeals found that "* * * the amended version of R.C. 4123.411(C) as applied to injuries which occurred prior to its effective date with respect to self-insured employers is unconstitutionally retroactive." Hence, concluded the court of appeals, "* * * for those injuries which occurred before August 22, 1986, a self-insured employer's liability has already attached and it would violate the mandates of Section 28, Article II, Ohio Constitution, to impose a new or additional obligation or liability upon them for a past occurrence."
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Vorys, Sater, Seymour Pease, Thomas M. Taggart, Robin R. Obetz and Robert N. Webner, for appellee.
Anthony J. Celebrezze, Jr., attorney general, and Gerald H. Waterman, for appellants.
Hanlon, Duff Paleudis Co., L.P.A., and Gerald P. Duff, urging affirmance for amicus curiae, Youghiogheny Ohio Coal Co.
Stewart Jaffy Associates Co., L.P.A., and Stewart R. Jaffy, urging reversal for amicus curiae, Ohio AFL-CIO.
Seeley, Savidge Aussem, Ted R. Greiner and Thomas M. Carolin, urging reversal for amici curiae, Chrysler Motors Corp. et al.
The issue we are asked to decide is whether R.C. 4123.411(C), effective August 22, 1986, retroactively requires self-insured employers to reimburse the bureau for DWRF payments to eligible employees in violation of Section 28, Article II of the Ohio Constitution. For the reasons that follow, we answer this inquiry in the negative and hold that R.C. 4123.411(C), as amended August 22, 1986, does not violate the retrospective provision of Section 28, Article II of the Ohio Constitution.
R.C. 4123.411 has again been amended effective November 3, 1989; however, in all practical effects it is identical to the 1986 version.
Section 28, Article II, Ohio Constitution states in relevant part: "The general assembly shall have no power to pass retroactive laws * * *."
In Van Fossen v. Babcock Wilcox Co. (1988), 36 Ohio St.3d 100, 522 N.E.2d 489, this court articulated a two-step analysis a court should follow in determining whether a statute violates the retroactivity provisions of Section 28, Article II.
Initially, a court must look at the intent of the General Assembly and determine whether the statute meets the threshold test for retroactive application contained in R.C. 1.48. R.C. 1.48 states that "[a] statute is presumed to be prospective in its operation unless expressly made retrospective." As noted in Kiser v. Coleman (1986), 28 Ohio St.3d 259, 262, 28 OBR 337, 339, 503 N.E.2d 753, 756, where "* * * there is no clear indication of retroactive application, then the statute may only apply to cases which arise subsequent to its enactment."
Only after a court has determined that the General Assembly intended a statute be given retroactive application, should a court consider whether the statute, as applied, violates Section 28, Article II. This court on numerous occasions has held that only retroactive substantive laws violate Section 28, Article II. Retroactive remedial laws do not. See Van Fossen, supra, at 106-107, 522 N.E.2d at 496-497.
Turning our attention to the statute in question, R.C. 4123.411(C), effective August 22, 1986, provides:
"For an employer granted the privilege to pay compensation directly the bureau of workers' compensation shall pay to employees who are participants regardless of the date of injury, any amounts due to the participants under section 4123.414 of the Revised Code and shall bill the employer, semiannually, for all amounts paid to a participant." (Emphasis added.)
Appellants and the amici curiae, Ohio AFL-CIO and Chrysler Motors Corp., generally contend that the court of appeals erred by relying upon "regardless of the date of injury," in concluding that the statute applies retroactively and thus violates Section 28, Article II.
Wean, in an effort to extinguish its liability to former employees who qualify for DWRF payments, generally advances two arguments. First, Wean contends that the statute operates in a prospective manner and, therefore, the General Assembly only intended Wean to be responsible to employees who qualify for DWRF payments subsequent to August 22, 1986, when the statute was amended. Second, Wean also takes the position that because it is now subject to increased DWRF payments as a result of the 1986 amendment, the statute is unconstitutionally retroactive. We disagree with Wean's arguments.
This court, in Thompson, supra, upheld the constitutionality of transferring income generated from the State Insurance Fund to cover a deficit in the DWRF, reasoning that:
"The General Assembly is afforded substantial discretion to implement a comprehensive workers' compensation program and it is not the function of the judiciary to question the wisdom of the General Assembly's exercise of its permissive powers under Section 35, Article II, so long as these powers are used in furtherance of the constitutionally enumerated purpose. The DWRF subsidy received by eligible permanently and totally disabled workers infuses Section 35, Article II with a meaningfulness that is fully consistent with the goals that prompted the people of Ohio to approve Section 35, Article II in the first place. Indeed, to hold otherwise and declare the DWRF program as presently funded and administered unconstitutional makes a cruel mockery of the laudable purpose that the constitutional provision was designed to serve." (Emphasis added.) Id. at 249, 1 OBR at 269, 438 N.E.2d at 1171.
In specifically addressing whether the transfer complied with Section 28, Article II, we stated that:
"The General Assembly was well aware of * * * the need to sidestep Section 28, Article II when it created the DWRF program. It may be fairly said that from its inception the DWRF has been a legislative response to Section 28, Article II. * * *
"`* * *
"`A large number of the permanently and totally disabled claimants received the lower levels of compensation benefits and were the continued victims of the inroads of inflation. It was believed generally that any plan of retrospective increase in the level of compensation payments would contravene § 35 [sic Section 28] of Article II of the Constitution. The disabled workmen's relief program was created to provide a subsidy that would give relief to the permanently and totally disabled claimants without running counter to the constitutional provision.'" (Emphasis added.) (Citations omitted.) Id. at 250-251, 1 OBR at 270-271, 438 N.E.2d at 1172.
Based on the foregoing, we reject Wean's contention that the statute, effective August 22, 1986, violates Section 28, Article II. Furthermore, in considering the historical origin and purpose of the DWRF, it is clear to this court that the General Assembly has amended R.C. 4123.411 at all times with the specific intent that the statute apply prospectively. Clearly, the statute, by its terms, applies to self-insured employers who have a current responsibility to totally and permanently disabled employees, regardless of the date of their injury. Although the statute speaks to prior employees who presently qualify for DWRF payments, this does not mean R.C. 4123.411(C) automatically mandates a retrospective reading. We have held previously that "`[a] statute is not retroactive merely because it draws on antecedent facts for a criterion in its operation.'" EPI of Cleveland, Inc. v. Limbach (1989), 42 Ohio St.3d 103, 106, 537 N.E.2d 651, 654, citing United Engineering Foundry Co. v. Bowers (1960), 171 Ohio St. 279, 282, 13 O.O. 2d 240, 241, 169 N.E.2d 697, 699.
From the statute's inception, the purpose of R.C. 4123.411 has been to prescribe the method of funding the DWRF. To date, the purpose has remained unchanged. The only effect on Wean, as well as on all self-insured employers, is the method by which self-insured employers are assessed. Prior to August 22, 1986, Wean's contribution to the DWRF was based upon a percentage of its then current payroll. The General Assembly, pursuant to the 1986 amendment, directed Wean to reimburse the bureau dollar-for-dollar for those qualified employees entitled to DWRF payments regardless of the date the employee was injured. As was the case prior to August 22, 1986, the effect of the amendment speaks only to a self-insured employer's current responsibility.
Accordingly, we conclude that R.C. 4123.411(C), effective August 22, 1986, was intended by the General Assembly to apply prospectively. As applied prospectively, self-insured employers are currently responsible to reimburse the bureau for all past, present and future employees who are eligible for the DWRF.
For the foregoing reasons, the judgment of the court of appeals is reversed.
Judgment reversed.
MOYER, C.J., SWEENEY, WRIGHT, H. BROWN and RESNICK, JJ., concur.
HOLMES, J., concurs in judgment only.