Jeffrey P. Sherman, Plaintiff-Appellant, v. Ohio Public Employees Retirement System, Defendant-Appellee.
No. 18AP-181 (C.P.C. No. 17CV-6815)
IN THE COURT OF APPEALS OF OHIO TENTH APPELLATE DISTRICT
January 29, 2019
2019-Ohio-278
LUPER SCHUSTER, J.
(REGULAR CALENDAR)
Rendered on January 29, 2019
On brief: Dworken & Bernstein Co., L.P.A., Patrick J. Perotti, Nicole T. Fiorelli, and Frank A. Bartela, for appellant. Argued: Nicole T. Fiorelli
On brief: [Dave Yost], Attorney General, and Benesch, Friedlander, Coplan & Aronoff LLP, John F. Stock, and Mark D. Tucker, special counsel for appellee. Argued: Mark D. Tucker
APPEAL from the Franklin County Court of Common Pleas
LUPER SCHUSTER, J.
Plaintiff-appellant, Jeffery P. Sherman, appeals from a judgment entry of the Franklin County Court of Common Pleas granting the motion to dismiss of defendant-appellee, Ohio Public Employees Retirement System (“OPERS“), for failure to state a claim. For the following reasons, we reverse.
I. Facts and Procedural History
On July 28, 2017, Sherman filed a complaint alleging OPERS violated his right to equal protection under the Ohio Constitution by reducing his health insurance subsidy
The complaint further alleges that in 2016, OPERS withheld $74.00 of Sherman‘s health insurance premium monies each month, resulting in Sherman paying $106.54 per month for health insurance instead of $32.54 per month. The reason these monies were withheld was, according to the complaint, solely because Sherman was reemployed in an OPERS-covered position. Sherman alleges that OPERS retirees who are reemployed in non-OPERS-covered positions receive their maximum health insurance premium monies whereas OPERS denied Sherman a significant portion of his monies solely because he gained reemployment in an OPERS-covered position.
In 2017, OPERS again withheld $74 of Sherman‘s health insurance premium monies each month, resulting in Sherman paying $192 for health insurance each month instead of $118 per month. Pursuant to the complaint, OPERS‘s stated reason for treating reemployed retirees differently is “the administrative feasibility of identifying retirees who are re-employed in non-[OPERS-]covered positions.” (Compl. at 4.)
In the complaint, Sherman sought class certification on behalf of all OPERS retirees for whom OPERS withheld a portion of their health insurance premium monies from January 1, 2016 to the present due to their reemployment in an OPERS-covered position. Additionally, Sherman sought a declaratory judgment and equitable relief in the form of restitution of the monies withheld.
In response to the complaint, on September 21, 2017, OPERS filed a
The trial court, in a February 14, 2018 decision and entry, granted OPERS‘s motion to dismiss. The trial court concluded that OPERS retirees who obtain reemployment with a private employer are not similarly situated to OPERS retirees who obtain reemployment with an OPERS participating employer. The trial court additionally found that even if the groups were similarly situated, OPERS was nonetheless entitled to dismissal because OPERS set forth a rational basis for the classification and Sherman did not maintain his burden of negating every possible basis which might support the classification. Sherman timely appeals.
II. Assignments of Error
Sherman sets forth the following errors for our review:
[1.] The trial court erred in holding that OPERS retirees re-employed in the private sector are not similarly situated to OPERS retirees re-employed in an OPERS-covered position.
[2.] The trial court erred in holding that saving money by means of an arbitrary classification provides a rational basis for that classification.
(Emphasis sic.)
III. Standard of Review
Under
IV. First Assignment of Error – Similarly Situated
In his first assignment of error, Sherman argues the trial court erred in concluding that OPERS retirees reemployed in an OPERS-covered position are not similarly situated to OPERS retirees reemployed in a non-OPERS-covered position.
The Equal Protection Clause of the Ohio Constitution provides, in pertinent part, “[a]ll political power is inherent in the people. Government is instituted for their equal protection and benefit.”
Sherman asserts that, in all relevant respects, OPERS retirees who are employed in OPERS-covered positions are similarly situated to OPERS retirees who are employed in the private sector. According to Sherman, both groups needed health insurance, were OPERS retirees, and qualified for the OPERS health insurance premium subsidy. Both groups are treated the same by the General Assembly and OPERS in that neither group is denied a pension by virtue of their reemployed status. Additionally, Sherman argues that no public policy exists to deter OPERS retirees from seeking reemployment in an OPERS-covered position. To the contrary, Sherman notes that
OPERS responds that the groups are not similarly situated because retirees such as Sherman who are reemployed by an OPERS-covered employer are receiving a second source of taxpayer-supported compensation and benefits. OPERS argues that the General Assembly distinguishes between publicly and privately reemployed retirees so as to deter “double-dipping” in public employment. According to OPERS, the $74 subsidy reduction is designed to maintain the fiscal health and stability of the public pension fund.
The state of Ohio does not have a general policy of discouraging OPERS retirees from returning to public employment. Moreover, the General Assembly has not acted to deny Sherman or others like him who resume public employment from receiving any portion of their OPERS pensions while employed as a new OPERS-covered employee. While OPERS points to a number of statutory provisions that apply to reemployed OPERS retirees in support of its argument that these classifications are not similarly situated, none appear designed to deter subsequent employment or receiving a second source of taxpayer-supported compensation.
Further,
Additionally,
” ‘[M]ost laws differentiate in some fashion between classes of persons. The Equal Protection Clause does not forbid classifications. It simply keeps governmental decisionmakers from treating differently persons who are in all relevant respects alike.’ ” (Emphasis added.) Harsco Corp. v. Tracy, 86 Ohio St.3d 189, 192 (1999), quoting Nordlinger v. Hahn, 505 U.S. 1, 10 (1992). If a distinction between an apparent classification is not a relevant distinction, a government actor will not be able to defeat an equal protection claim on the grounds that the two groups are not similarly situated. MCI Telecommunications Corp. v. Limbach, 68 Ohio St.3d 195 (1994) (finding that the distinction the tax commissioner was using to treat MCI Telecommunications differently was not a relevant distinction, the two taxpayers were being treated differently, and thus MCI Telecommunications was denied equal protection of the laws).
In Ohio, there is no general policy of discouraging OPERS retirees from returning to work in OPERS-covered positions. Unlike New York law, which OPERS references in its brief, the Ohio General Assembly has not attempted to discourage OPERS retirees from seeking government work by denying them pension benefits while they are reemployed in the public sector. See Slavsky v. New York City Police Dept., 967 F.Supp. 117, 119-20 (S.D.N.Y.1997).
Under Ohio‘s statutory framework, when an OPERS retiree becomes reemployed in an OPERS-covered position, OPERS is only providing one stream of taxpayer-
Thus, we conclude Sherman and other OPERS retirees who gain reemployment in an OPERS-covered position are similarly situated to those OPERS retirees who gain reemployment in non-OPERS-covered positions for purposes of an equal protection analysis. Accordingly, the trial court erred when it concluded that Sherman was not similarly situated to other reemployed OPERS retirees. We sustain Sherman‘s first assignment of error.
V. Second Assignment of Error – Rational Basis Test
In his second assignment of error, Sherman argues the trial court erred in concluding OPERS set forth a rational basis for the classification and granting OPERS‘s motion to dismiss on that basis.
A governmental classification that does not involve a fundamental right or a suspect class is accorded a strong presumption of validity. Heller v. Doe, 509 U.S. 312, 319 (1993). Such a classification cannot run afoul of the Equal Protection Clause if there is a rational relationship between the disparity of treatment and some legitimate governmental purpose. Id. at 320. Thus, a classification must be upheld against an equal protection challenge if there is any reasonably conceivable state of facts that could provide a rational basis for the classification. Id.; Am. Assn. of Univ. Professors, Central State Univ. Chapter v. Central State Univ., 87 Ohio St.3d 55, 58 (1999). A rational relationship exists under rational-basis review if the relationship of the classification to its goal is not so attenuated as to render the distinction arbitrary or irrational. Id.
A court may dispose of an equal protection claim on a
A classification does not fail rational basis review because it is not made with mathematical nicety or because in practice it results in some inequality. Heller at 321; State ex rel. Horvath v. State Teachers Retirement Bd., 83 Ohio St.3d 67, 75 (1998). Sherman asserts that because Ohio has no public policy against “double-dipping,” it is not rational for the state to seek to save money by means of an arbitrary classification that penalizes some OPERS retirees but not others.
Preserving state money can be a legitimate state purpose that serves as a rational reason for creating a particular classification. Roseman v. Firemen & Policemen‘s Death Benefit Fund, 66 Ohio St.3d 443, 450 (1993). However, under Ohio law, “when preserving state money is accomplished by treating an individual in an arbitrary manner, it is not a rational reason to classify.” Adamsky v. Buckeye Local School Dist., 73 Ohio St.3d 360, 362 (1995).
Here, the trial court held that protecting the public fisc is a rational basis for the challenged classification. It noted that Sherman, as the party attacking the rationality of the classification, has the burden to negate every conceivable basis which might support it. Walgate at ¶ 22. While the trial court is correct that Sherman would have the burden of attacking the rationality of the basis for the classification once it is set forth, the trial court‘s analysis ignores the threshold responsibility of the party supporting the rationality of the classification to explain how the classification acts in furtherance in the stated rational basis. OPERS has not identified how this policy is reasonably related to its stated rational basis of protecting the public fisc. If we are unable to make a causal link between the existence of a policy and the rational basis of that policy, we cannot say it appears “beyond doubt” from the complaint that Sherman could prove no set of facts warranting the requested relief. State ex rel. Turner v. Houk, 112 Ohio St.3d 561, 2007-Ohio-814, ¶ 5.
Here, OPERS asserts that the state‘s legitimate state interest in preserving state money would be furthered by doing so in a manner that reduces administrative burdens attributable to where OPERS retirees gain reemployment. OPERS does not explain how
We also emphasize the crucial role a
Having concluded that the trial court erred in granting OPERS‘s
VI. Disposition
Based on the foregoing reasons, the trial court erred in granting OPERS‘s motion to dismiss. Having sustained Sherman‘s two assignments of error, we reverse the judgment of the Franklin County Court of Common Pleas and remand for further proceedings consistent with this decision.
Judgment reversed; cause remanded.
SADLER, J., concurs.
TYACK, J., concurs in judgment only.