The Ohio Supreme Court affirmed the constitutionality of Ohio's workers' compensation subrogation law last week in Groch v. General Motors Corporation. After more than a decade of uncertainty, employers paying workers' compensation benefits may now have a measure of confidence in their subrogation rights.
Under the current subrogation law, payment of workers' compensation or benefits creates a "right of recovery" in the net amount recovered by the claimant from a third party. This law, which applies to claims arising after April 9, 2003 and is codified at R.C. § 4123.93 and 4123.931, was passed after the Ohio Supreme Court struck down a prior subrogation statute on constitutional grounds. Within days of becoming effective, the current law was also challenged on constitutional grounds and has remained under a cloud of uncertainty until last week.
In Groch, an employee was injured when a trim press he was operating came down on his right arm and wrist. The employee later brought suit against the manufacturers of the trim press based on alleged product defects, and the employer asserted its right to recover its workers' compensation benefits from any award or settlement received from the lawsuit.
After reviewing the constitutional defects of the prior subrogation law and considering the differences in the current law, the court concluded that the current subrogation law is constitutional and on its face does not violate the Takings Clause, the Due Process and Remedies Clauses or the Equal Protection Clause. In its analysis, the court observed that this legislation should not be reviewed solely from the claimant's perspective, but also from the subrogee's perspective. It concluded that the current subrogation law "bear[s] all the earmarks of compromise legislation that attempts to balance the legitimate, competing interests of claimants and statutory subrogees."
This decision also marks the second time in two months that the court has upheld a portion of Senate Bill 80, commonly referred to as Ohio's tort-reform bill. (Information on Arbino v. Johnson & Johnson, which upholds limitations on punitive and non-economic damages, can be found in the article "Tort Reform: Ohio Supreme Court Upholds Constitutionality of Limitations on Non-Economic and Punitive Damages in Tort Actions" in the Squire Sanders Labor & Employment Law Update published earlier this month.) Specifically, Groch upholds the constitutionality of a 10-year time limit, called a "statute of repose," for the accrual of a product liability claim against the manufacturer of a product. The court also found, however, that the application of the statute of repose under this case's particular facts is unconstitutional. Significant to Ohio's tort-reform legislation as a whole, the court concluded that the core of the Senate Bill 80 is sufficiently unified to comply with Ohio's constitutional requirement that no bill shall contain more than one subject.
After a long period of uncertainty over Ohio's workers' compensation subrogation law and tort-reform legislation, Ohio employers are beginning to face more predictability. For the second time in two months, the court has emphasized the legislature's role in establishing public policy and has applied a strong presumption of constitutionality in upholding legislation.