2021 Ohio 3665
Ohio Ct. App.2021Background
- Twism Enterprises applied in December 2018 for an Ohio Certificate of Authorization (COA) and designated James L. Cooper, P.E., as the firm’s responsible professional engineer.
- Cooper was a retired engineer who would serve as a 1099 independent contractor, bill Twism for services, and not receive employee benefits; Twism’s operating agreement named Cooper as the manager of engineering activities.
- The State Board denied the COA under R.C. 4733.16(D), concluding Twism had not designated a “full-time” manager who works directly for the firm.
- A hearing officer and the Board sustained the denial; Twism appealed to the Hamilton County Court of Common Pleas, which reversed and ordered the Board to issue the COA, rejecting the Board’s interpretation that the manager must be a W-2 employee.
- Twism moved for attorney’s fees under R.C. 2335.39(B); the trial court denied fees. On appeal, the court of appeals reversed the trial court, holding the statute and regulation ambiguous and that deference to the Board’s reasonable interpretation was required; the court entered judgment for the Board.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an independent contractor may qualify as a “full-time manager” under R.C. 4733.16(D) / Ohio Adm.Code 4733-39-02(B) | Cooper’s 1099 status and Twism’s operating agreement satisfied the statute — "full-time" can be met by billing and providing substantially all engineering hours for Twism. | “Full-time manager” must be directly affiliated/employed by the entity; independent contractors work for their own business and thus do not satisfy the statute. | The term is ambiguous; because the Board’s interpretation that direct affiliation/employment is required is reasonable, courts must defer and the Board’s denial stands (independent contractor insufficient). |
| Whether the trial court should have deferred to the Board’s statutory/regulatory interpretation | Trial court: the Board created a new unwritten requirement by insisting on W-2 employment; no deference warranted. | Board: its construction is within its area of expertise and reasonable; if ambiguous, agency deference applies. | Court of appeals: statutory/regulatory language is ambiguous; therefore deference to the Board’s reasonable interpretation is required; trial court erred in substituting its judgment. |
| Whether Twism is entitled to attorney’s fees under R.C. 2335.39(B) | Twism claimed prevailing-party status and that the Board’s position was not substantially justified. | Board defended its denial as substantially justified and in the public interest. | Moot on appeal because reversal of the trial court disposes of the merits; appellate court did not reach the fee question. |
Key Cases Cited
- Cleveland Clinic Found. v. Bd. of Zoning Appeals, 141 Ohio St.3d 318 (2014) (no deference to agency interpretation unless ordinance/statute is ambiguous)
- Lang v. Dir., Ohio Dept. of Job & Family Servs., 134 Ohio St.3d 296 (2012) (courts and agencies must give effect to unambiguous legislative intent)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (if statute is ambiguous, court defers to reasonable agency interpretation)
- State ex rel. Fire Rock, Ltd. v. Ohio Dept. of Commerce, 163 Ohio St.3d 277 (2021) (an administrative rule with unambiguous text is not entitled to agency deference)
- Bernard v. Unemp. Comp. Rev. Comm., 136 Ohio St.3d 264 (2013) (statute ambiguous when subject to more than one reasonable interpretation)
- Columbia Gas Transm. Corp. v. Levin, 117 Ohio St.3d 122 (2008) (unambiguous administrative-rule text must be applied as written)
- Sears v. Weimer, 143 Ohio St. 312 (1944) (plain and unambiguous statutory language must be applied, not interpreted)