Pivonka v. Corcoran (Slip Opinion), 165 N.E.3d 1098

Background

Plaintiffs Michael Pivonka and Lisa Rijos filed a class action in Cuyahoga County Common Pleas Court (Apr. 2013) seeking disgorgement of all sums the Ohio Department of Medicaid (or its predecessor) collected under former R.C. 5101.58 and a declaration that that statute is preempted/unconstitutional under federal law.
Former R.C. 5101.58 (amended 2007) authorized Medicaid subrogation and contained a statutory presumption allocating at least one-half of unallocated settlements to medical costs; federal cases later limited states’ ability to claim parts of recoveries not expressly allocated to medical expenses.
After federal decisions, the General Assembly replaced/renumbered the statute as R.C. 5160.37 (effective Sept. 29, 2013) and (in 2015) created a rebuttable presumption and an administrative review process (including a hearing and appeal to the Medicaid director), expressly stating that the administrative route is the “sole remedy” for certain overpayments made on or after Sept. 29, 2007.
The trial court certified a class covering persons who repaid the Department from April 6, 2007, to present; the Department challenged jurisdiction and argued R.C. 5160.37 divested the common pleas court of authority over overcollection claims. The Eighth District affirmed class certification.
The Ohio Supreme Court reversed: it held R.C. 5160.37 supplies the exclusive remedy for named plaintiffs and unnamed prospective class members who reimbursed the Department on or after Sept. 29, 2007, and remanded to the trial court to address claims by those who repaid between April 6 and Sept. 28, 2007.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether R.C. 5160.37 ousts common pleas jurisdiction and provides the sole remedy for overcollection claims for reimbursements paid on/after Sept. 29, 2007	Plaintiffs contended their constitutional challenge and preexisting suit exempted them from the new administrative scheme	Department argued the statute establishes a complete administrative-review process that is the exclusive remedy for covered overpayments	Held: R.C. 5160.37 is remedial and provides the sole remedy for overpayments repaid on/after Sept. 29, 2007; common pleas lacked jurisdiction for those claims
Whether named plaintiffs who filed suit before R.C. 5160.37’s enactment may avoid the administrative process by raising a constitutional claim in court	Plaintiffs said they could litigate the statute’s constitutionality in court without first using administrative remedies	Department said plaintiffs must exhaust the statutory administrative remedies because the statute prescribes the exclusive remedy	Held: Plaintiffs who repaid on/after Sept. 29, 2007 (including the named plaintiffs) must pursue R.C. 5160.37’s administrative process; exhaustion applies and the statute is procedural/remedial not impermissibly retroactive
Whether the certified class may include persons who repaid between April 6 and Sept. 28, 2007	Plaintiffs included that earlier group in the class and argued the suit covers them	Department argued R.C. 5160.37 does not apply to those earlier repayments but raised Court of Claims jurisdiction as an alternative	Held: R.C. 5160.37 does not apply to repayments before Sept. 29, 2007; court remanded for the trial court to develop the record and determine jurisdiction over those earlier claims

Key Cases Cited

Arkansas Dept. of Health & Human Servs. v. Ahlborn, 547 U.S. 268 (federal anti-lien limits state Medicaid subrogation over unallocated recoveries)
Wos v. E.M.A. ex rel. Johnson, 568 U.S. 627 (state statute creating conclusive presumption allocating part of recovery to medical costs conflicts with federal anti-lien rule)
Landgraf v. USI Film Prods., 511 U.S. 244 (new jurisdictional/ remedial statutes can apply to pending cases without violating nonretroactivity principles)
Smith v. Bayer Corp., 564 U.S. 299 (unnamed putative class members are not parties prior to class certification)
Mobil Oil Corp. v. Rocky River, 38 Ohio St.2d 23 (administrative agencies cannot decide constitutional validity; exhaustion of administrative remedies required before judicial review)
Morgan v. Western Elec. Co., Inc., 69 Ohio St.2d 278 (no vested right to a particular remedy; legislature may change remedies and jurisdiction)
State ex rel. Cleveland Elec. Illum. Co. v. Cuyahoga Cty. Court of Common Pleas, 88 Ohio St.3d 447 (exclusive administrative jurisdiction where legislature enacts comprehensive review scheme)
Kazmaier Supermarket, Inc. v. Toledo Edison Co., 61 Ohio St.3d 147 (framework for conferring exclusive agency jurisdiction)
Longbottom v. Mercy Hosp. Clermont, 137 Ohio St.3d 103 (distinguishing substantive vs. remedial/ procedural legislation under Ohio Constitution)
Pratts v. Hurley, 102 Ohio St.3d 81 (subject-matter jurisdiction can be challenged at any time)