THE CITY OF CLEVELAND, APPELLEE v. OHIO BUREAU OF WORKERS’ COMPENSATION, APPELLANT.
No. 2018-0572
SUPREME COURT OF OHIO
February 5, 2020
Slip Opinion No. 2020-Ohio-337
APPEAL from the Court of Appeals for Cuyahoga County, No. 105604, 2018-Ohio-846. Submitted September 10, 2019.
NOTICE
This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.
SLIP OPINION NO. 2020-OHIO-337
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Cleveland v. Ohio Bur. of Workers’ Comp., Slip Opinion No. 2020-Ohio-337.]
O’CONNOR, C.J.
{¶ 1} In this appeal, we consider which court has jurisdiction over an employer’s claim against the Ohio Bureau of Workers’ Compensation (“BWC”) for the reimbursement of alleged excessive premiums paid by the еmployer.
I. FACTS AND PROCEDURAL BACKGROUND
{¶ 2} Cleveland, as an employer, pays the BWC premiums for workers’ compensation insurance. The BWC is then responsible for the distribution of workers’ compensation benefits to city employees who suffer workplace injuries. In this case, Cleveland challenges the legality of premiums that the BWC chаrged over several years. According to Cleveland, the BWC undercharged the group-rated employers and then overcharged the individually rated employers, such as Cleveland, to make up the difference. The narrow issue before us is whether the case was properly filed in the court of common pleas or whether it shоuld have been filed in the Court of Claims, which has exclusive jurisdiction over certain claims against state entities such as the BWC.
A. The Ohio Workers’ Compensation system
{¶ 3} Ohio requires public employers that are not self-insured employers to contribute to the public insurance fund “the amount of money determined by the administrator of workers’ compensation.”
{¶ 4} Pursuant to
{¶ 5} Cleveland alleges that it was overcharged by the BWC for more than ten years because the BWC’s method for determining premiums was flawed. In 1989, the General Assembly amended
{¶ 6} The BWC acknowledges that during the years at issue, the discounted premiums it charged employers under the group-rated plan were insufficient to cover the losses attributable to those employers. Because the BWC must maintain a revenue-neutral fund, it had to find a way to recoup that difference. It did so by increasing the “off-balance factor,” a factor used in calculating the еmployers’ base rates. Cleveland alleges that this increase resulted in its unjustly being charged excessive premiums.
B. Cleveland files suit
{¶ 7} In 2013, Cleveland sued the BWC in the Cuyahoga County Court of Common Pleas, asserting a claim of unjust enrichment on the ground that the
{¶ 8} Following the bench trial, the trial court ordered the BWC to pay Cleveland $4,524,392 in restitution, along with pоstjudgment interest at the statutory rate. The Eighth District Court of Appeals affirmed the judgment on appeal.
{¶ 9} The BWC sought this court’s discretionary review, raising three propositions of law. We accepted jurisdiction over all three, 153 Ohio St.3d 1432, 2018-Ohio-2639, 101 N.E.3d 464, but because we resolve this case on the first proposition of law, we need not address the other twо. The first proposition of law states:
A claim for overpayment of an amount owed to the State, under a statute that undisputedly requires some payment, and where the amount of alleged overpayment is derived from an estimated damages model rather than a known sum, is a legal claim that must be brought in the Court of Claims.
{¶ 10} To determine whеther the Court of Claims or the court of common pleas has jurisdiction over Cleveland’s claim, we must decide whether the claim is legal or equitable. Measles v. Indus. Comm., 128 Ohio St.3d 458, 2011-Ohio-1523, 946 N.E.2d 204, ¶ 7. Traditionally, the doctrine of sovereign immunity prevented claims against agents of the state, such as the BWC, for wrongs committed in the course of official duties. Scоt Lad Foods, Inc. v. Secy. of State, 66 Ohio St.2d 1, 6, 418 N.E.2d 1368 (1981). However, sovereign immunity does not bar claims for equitable relief, only for legal relief. Ohio Hosp. Assn. v. Ohio Dept. of Human Servs., 62 Ohio St.3d 97, 105, 579 N.E.2d 695 (1991). In 1975, the General Assembly waived the state’s sovereign immunity in most instances,
{¶ 11} Restitution can be either legal or equitable relief, depending on the basis for the plaintiff’s claim and the “nature of the underlying remedies sought.” Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 212-213, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002). Historically, a legal claim for restitution was one in which the plaintiff “ ‘could not assert title or right to possession of particular property, but in which nevertheless he might be able to show just grounds for recovering money to pay for some benefit the defendant had received from him.’ ” (Emphasis deleted.) Great-West at 213, quoting 1 Dobbs, Law of Remedies,
{¶ 12} The United States Supreme Court has recognized that most claims are legal: “ ‘Almost invariably * * * suits seeking * * * to compel the defendant to pay a sum of money to the plaintiff are suits for “money damages,” as that phrase has traditionally been applied, sinсe they seek no more than compensation for loss resulting from the defendant’s breach of legal duty.’ ” (First ellipsis sic.) Id. at 210, quoting Bowen v. Massachusetts, 487 U.S. 879, 918-919, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988) (Scalia, J., dissenting). However, in a few cases, we have found suits for the recovery of funds to be claims in equity.
{¶ 13} In Santos v. Ohio Bur. of Workers’ Comp., 101 Ohio St.3d 74, 2004-Ohio-28, 801 N.E.2d 441, injured employees sought to recover money that had been collected from them by the BWC pursuant to a subrogation statute that was subsequently determined to be unconstitutional. We determined that because the subrogation statute was unconstitutional, any collection or retention of moneys was unlawful and therefore the action seeking restitution was “an action to correct the unjust enrichment of the BWC [and sought] the return of specific funds wrongfully collected.” Id. at ¶ 17. Thus, we concluded that the employees’ claim was an equitable claim.
{¶ 14} In another case, we held that a claim by Medicaid providers seeking monetary relief from the Ohio Department of Human Services, following its implementation of an unlawful administrаtive rule that reduced reimbursement rates, was an equitable claim. Ohio Hosp., 62 Ohio St.3d 97, 579 N.E.2d 695. In reaching this conclusion, we relied on the following analysis by the United States Supreme Court in Bowen:
“Damages are given to the plaintiff to substitute for a suffered loss, whereas specific remedies ‘are not substitute remedies at all, but attempt to give the plaintiff the very thing to which he was entitled.’ D. Dobbs, Handbook on the Law of Remedies 135 (1973). * * *
“* * * Maryland [the plaintiff] is seeking funds to which a statute allegedly entitles it, rather than money in compensation for the losses, whatever they may be.”
(Emphasis deleted and ellipses and brackets added.) Id. at 895, quoting Maryland Dept. of Human Resources v. Dept. of Health & Human Servs., 763 F.2d 1441, 1446 (D.C.Cir.1985).
{¶ 15} In the present case, even if the premiums charged by the BWC violated
{¶ 16} Since we decided Santos and Ohio Hosp. Assn., the United States Supreme Court has provided clear guidance regarding what constitutes equitable relief, and that guidance further supports our determination that the claim here is a legal claim. In 2016, the court explained that a claim sounded in law if it sought to recover from a defendant’s general assets rather than “specifically identified funds that remain in the defendant’s possession.” Montanile v. Natl. Elevator Industry Health Benefit Plan Bd. of Trustees, __ U.S. __, 136 S.Ct. 651, 658, 193 L.Ed.2d 556 (2016). The court further explained that “[e]quitable remedies ‘are, as a general rule, directеd against some specific thing; they give or enforce a right to or over some particular thing * * * rather than a right to recover a sum of money generally out of the defendant’s assets.’ 4 S. Symons, Pomeroy’s Equity Jurisprudence § 1234, p. 694 (5th ed. 1941) (Pomeroy).” (Ellipsis sic.) Montanile at __, 136 S.Ct.
{¶ 17} Although the BWC kept track of the amount of Cleveland’s premium payments,
III. CONCLUSION
{¶ 18} For the foregoing reasons, we reverse the decision of the court of appeals, vacate all orders by the trial court in this matter, and remand the cause to the Cuyahoga County Common Pleas Court with instructions to dismiss the cause for lack of subject-matter jurisdiction.
KENNEDY, FRENCH, FISCHER, DEWINE, and STEWART, JJ., concur.
DONNELLY, J., dissents, with an opinion.
DONNELLY, J., dissenting.
{¶ 19} In Santos v. Ohio Bur. of Workers’ Comp., 101 Ohio St.3d 74, 2004-Ohio-28, 801 N.E.2d 441, ¶ 17, this court determined that when the Bureau of Workers’ Compensation (“BWC”) unlawfully retains funds to which it is not entitled, “an action to correct the unjust enrichment of thе BWC” is an equitable claim for restitution. Santos remains good law. See Cirino v. Ohio Bur. of Workers’ Comp., 153 Ohio St.3d 333, 2018-Ohio-2665, 106 N.E.3d 41, ¶ 28 (lead opinion citing Santos with approval). Yet the majority opinion today determines that an action seeking restitution of funds that the BWC unlawfully collected from the city of Cleveland is not an equitable action. In this case, the majority opinion brushes aside Santos, without overruling it, by linking its view of restitution to the view espoused by the United States Supreme Court. See Majority opinion at ¶ 16, relying on Montanile v. Natl. Elevator Industry Health Benefit Plan Bd. of Trustees, __U.S. __, 136 S.Ct. 651, 658, 193 L.Ed.2d 556 (2016). In doing so, it has essentially determined that a court can never order restitution of money.
{¶ 20} The majority opinion states, “It is inconceivable how money belonging to Cleveland could ‘clearly be traced to particular funds or property’ in the BWC’s possession * * *.” Majority opinion at ¶ 17, quoting Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 213, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002). I agree with the statement, but I disagree with the import the majority gives it. If a party can avoid a claim for restitution of money simply by commingling funds, then there will never be a successful claim for restitution of money. The
{¶ 21} There is no reason to adopt the untenable position that when money that was unlawfully received cannot be traced tо particular funds, restitution is not available. Money is not like most assets—it is intrinsically fungible. When a person seeks the return of $100, he or she never insists that the $100 be the exact same bills possessed previously; any $100 will do just fine—for that matter, so will a check or an electronic transfer. Other assets are different, when a person seeks restitution of а ring, he or she is seeking a specific ring; rings have specific differentiating characteristics, both good and bad. Whereas one hundred dollars is one hundred dollars.
{¶ 22} The BWC has assets in excess of $28 billion. See Fiscal Year 2018 Annual Report of the Ohio Bureau of Workers’ Compensation, https://www.ic.ohio.gov/news/annualreport_pdfs/bwc_ic_annual_2018.pdf (accessed Jan. 21, 2020) at page 3 [https://perma.cc/2KKQ-DG82]. It does not keep those funds in discernible stacks of bills and coins. That should not render it immune from a claim for restitution of money. The BWC was found to have overcharged Cleveland by $4,524,392, and it has ample funds available from which to make restitution.
{¶ 23} Cleveland is not seeking damages or any other legal remedy. Cleveland is not seeking one penny more than the $4,524,392 that it was unlawfully overcharged. Based on Santos, 101 Ohio St.3d 74, 2004-Ohio-28, 801 N.E.2d 441, I conclude that Cleveland’s claim is in equity. I would affirm the sound judgment of the court of appeals. Accordingly, I dissent.
Dave Yost, Attorney General, Benjamin M. Flowers, Deputy Solicitor, Michael J. Hendershot, Chief Deputy Solicitor, and Stephen P. Carney, Deputy Solicitor; and Taft, Stettinius & Hollister, L.L.P., James D. Abrams, and Michael J. Zbiegien Jr., for appellant.
Garry E. Hunter, urging affirmance for amicus curiae, the Ohio Municipal League.