Smart Summary for Employers

  • The Ohio Supreme Court has upheld a statute requiring employer consent for a complaint dismissal in a workers’ compensation court appeal filed by the employer.
  • Previously, claimants in a workers’ compensation court appeal could dismiss a complaint, regardless of which party filed the appeal, prolonging the compensation and benefit process by as much as two years.
  • Ferguson v. State of Ohio upholds amendments to R.C. 4123.512 that require employers to consent to a dismissal.
  • This will allow employers to avoid unnecessary and previously unavoidable delays in the appeals process by withholding consent to a dismissal.

In 2006, the General Assembly amended R.C. 4123.512 to require employer consent to a dismissal of a complaint in an employer filed appeal. Prior to that, Ohio case authority permitted a claimant, who is the plaintiff in a workers’ compensation court appeal, to dismiss a complaint pursuant to Rule 41 of the Ohio Rules of Civil Procedure regardless of which party filed the appeal. This led to claimants to dismiss the complaint in employer filed appeals as a matter of course, which prolonged by as much as two years the receipt of compensation and benefits for the conditions at issue.

In Ferguson v. State of Ohio, 2017-Ohio-7844, the Supreme Court reversed a decision by the Eighth District Court of Appeals, which had held that this provision was unconstitutional, as it violated the separation of powers, equal protection and due process clauses of the state and federal constitutions.

The separation of powers argument was based upon the fact that the Civil Rules are implemented by the Ohio Supreme Court to govern procedure in civil court actions and cannot be contradicted by legislative enactment. The Court noted, however, that the Civil Rules provide that in cases involving “special statutory proceedings,” a rule which is “clearly inapplicable” will not apply to a procedure mandated by statute. The Court held that a workers’ compensation court appeal is a special statutory preceding and found that Civ.R. 41 was thus clearly inapplicable, given the requirement for employer consent to dismissal of a complaint in employer appeals under R.C. 4123.512:

R.C. 4123.512(D) has changed. The claimant’s ability to voluntarily dismiss an employer’s appeal pursuant to Civ.R. 41(A)(1)(a) and (A)(2) “has . . . been superseded by statute” [Citation omitted]. The purpose of the consent provision is obvious: to thwart the ability of claimants to voluntarily dismiss an employer’s appeal without the employer’s consent. Application of Civ.R. 41(A) would “alter the basic statutory purpose” for which the consent provision was enacted. [Citation omitted] That renders the rule clearly inapplicable.

Relative to the equal protection claim, the Court considered whether the distinction between claimant and employer appeals under the statute was rationally related to a legitimate state interest. The Court found that the amendment “corrected the situation so that workers’ compensation appellants are now treated the same as other appellants.” Given that claimants can receive compensation and medical benefits during the pendency of an appeal, the Court found that “there was an incentive for claimants to voluntarily dismiss a case and refile up to a year later.” The Court further noted that there was no dollar-for-dollar reimbursement from the claimant should the claim be overturned. Thus, the Court found that the financial health of the workers’ compensation fund was directly impacted by this lack of reimbursement and represented a legitimate state interest. The Court likewise found a legitimate state interest in avoiding unnecessary delays in the appeals process. Accordingly, the Court held that the statutory distinction did not violate equal protection.

The Court treated the due process claim as one involving substantive due process. The Court noted that such claims are analyzed under the same standard as equal protection, i.e. whether the statute is rationally related to a legitimate state interest. Having already found that to be the case, the Court found no violation of substantive due process.

The Court’s holding in Ferguson is an important victory for employers who may now, should they choose, withhold consent to a dismissal and avoid the unnecessary and previously unavoidable delays in the appeals process.