Title: State ex rel. RMS of Ohio, Inc. v. Ohio Bur. of Workers' Comp.

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as State ex rel. RMS of Ohio, Inc. v. Ohio Bur. of Workers’ Comp., 113 Ohio St.3d 154, 
2007-Ohio-1252.] 
 
 
THE STATE EX REL. RMS OF OHIO, INC., APPELLANT, v. OHIO BUREAU OF 
WORKERS’ COMPENSATION, APPELLEE. 
[Cite as State ex rel. RMS of Ohio, Inc. v. Ohio Bur. of Workers’ Comp.,  
113 Ohio St.3d 154, 2007-Ohio-1252.] 
Bureau of Workers’ Compensation — Business-classification codes — Deference 
to bureau expertise — Judgment affirmed. 
(No. 2006-0916 – Submitted January 9, 2007 – Decided April 4, 2007.) 
APPEAL from the Court of Appeals for Franklin County, 
No. 05AP-301, 2006-Ohio-1643. 
Per Curiam. 
{¶ 1} The sole question before us is this:  Did appellee, the Ohio Bureau 
of Workers’ Compensation, abuse its discretion in reclassifying the nature of the 
business of appellant, RMS of Ohio, Inc., for purposes of calculating its workers’ 
compensation premium rates?  We hold it did not. 
{¶ 2} RMS of Ohio, Inc., provides in-home personal-care services to 
clients who are mentally handicapped or developmentally disabled.  The bureau 
uses a manual of business-classification codes to determine workers’ 
compensation premiums.  The manual is prepared by the National Council on 
Compensation Insurance, Inc. (“NCCI”).  Prior to July 2000, RMS was classified 
under manual classification code 8861, which covers “Welfare Social Service 
Organizations Professional Employees,” and code 9110, which covers “Welfare 
Social Service Organizations Non-Professional Employees.”  A bureau audit of 
payroll records from July 2000 through June 2002 resulted in the reclassification 
of RMS under code 8835, “Nursing-Home Health, Public and Traveling — all 
employees.”  Code 8835 requires a higher workers’ compensation premium.  
RMS objected, but the bureau’s Adjudicating Committee upheld the 
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reclassification, noting, among other things, that RMS was not a welfare or 
charitable organization covered by code 8861 and 9110. 
{¶ 3} That order was affirmed by the bureau’s administrator’s designee. 
{¶ 4} RMS filed a mandamus action in the Court of Appeals for Franklin 
County, alleging that the bureau abused its discretion in reclassifying the nature of 
its business.  RMS conceded that it did not provide services to individuals in a 
group-home setting and that it was not a charitable or welfare organization, which 
is what code classifications 8861 and 9110 cover.  It acknowledged that its 
services were instead rendered at the homes of its individual clients, but it argued 
that location should not be dispositive, since the actual duties, and hence the risks, 
were similar. 
{¶ 5} The court of appeals was not persuaded.  Stressing the long-
standing deference afforded the agency in classifying occupations and industries, 
the court denied the writ.  This appeal as of right followed. 
{¶ 6} We have long recognized the challenges involved in establishing 
premium rates for workers’ compensation coverage and have repeatedly 
confirmed the deference due the agency in these matters.  State ex rel. Reaugh 
Constr. Co. v. Indus. Comm. (1928), 119 Ohio St. 205, 209, 6 Ohio Law Abs. 
694, 162 N.E. 800;  State ex rel. McHugh v. Indus. Comm. (1942), 140 Ohio St. 
143, 149, 23 O.O. 361, 42 N.E.2d 774; State ex rel. Minutemen, Inc. v. Indus. 
Comm. (1991), 62 Ohio St.3d 158, 161, 580 N.E.2d 777; State ex rel. Progressive 
Sweeping Contrs., Inc. v. Ohio Bur. of Workers’ Comp. (1994), 68 Ohio St.3d 
393, 395, 627 N.E.2d 550.  Deference is required “in all but the most 
extraordinary circumstances,” with judicial intervention warranted only when the 
agency has acted in an “arbitrary, capricious or discriminatory” manner.  
Progressive Sweeping, 68 Ohio St.3d at 395-396, 627 N.E.2d 550. 
{¶ 7} The rate-making process starts with “classif[ying] occupations or 
industries with respect to their degree of hazard.”  R.C. 4123.29(A)(1).  The goal 
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is to “assign the one basic classification that best describes the business of the 
employer within a state.”  Ohio Adm.Code 4123-17-08(D).  It is an undertaking, 
however, in which “absolute precision * * * is often impossible.” Progressive 
Sweeping, 68 Ohio St.3d at 395, 627 N.E.2d 550. Accordingly, we are “reluctant 
to find an abuse of discretion merely because the employer’s actual risk does not 
precisely correspond with the risk classification assigned.”  Id. at 396, 627 N.E.2d 
550. 
{¶ 8} The bureau’s decision to reclassify RMS’s operations from codes 
8861 and 9110 to 8835 is not an abuse of discretion.  Codes 8861 and 9110 apply 
to “charitable or welfare organizations.”  RMS is not a charitable or welfare 
organization.  Moreover, the scope provision of codes 8861 and 9110’s states: 
{¶ 9} “Codes 8861 and 9110 are applicable to institutions that provide 
charitable or welfare assistance for clients such as needy persons; mentally, 
physically or emotionally handicapped persons; abused spouses; and those who 
may be working off drug- or alcohol-related sentences.  Charitable or welfare 
organizations may offer these individuals sleeping accommodations, meals, 
counseling, education, training and employment.”  (Emphasis added.) 
{¶ 10} In addition: 
{¶ 11} “The following typify operations of a charitable or welfare nature 
that are contemplated by Codes 8861 and 9110;  
{¶ 12} “1. 
Homes for youths or physically, mentally or emotionally 
handicapped clients:  House ‘parents’ or counselors may live with a limited 
number of clients in a group home.  * * * The clients are taught how to live with 
one another and perform daily living chores such as laundry, housekeeping and 
meal preparation.  The clients may be sent to another location during the day to 
work, receive occupational and/or scholastic training or receive medical or 
psychiatric evaluation. 
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{¶ 13} “2. 
Temporary shelters for abused persons:  These homes 
provide temporary shelter and food for those involved in physically or mentally 
abusive or antagonistic relationships.  * * *    
{¶ 14} “3. 
Halfway houses:  These operations provide rehabilitation 
services to those who have recently left institutional life and require a period of 
readjustment to the outside world. 
{¶ 15} “4. 
Rescue missions:  These operations may provide food and 
shelter for transient clients who may only be in need of a hot meal or temporary 
shelter.”  (Emphasis added.) 
{¶ 16} RMS does not operate group homes, temporary shelters, halfway 
houses, or rescue missions, nor does it service them.  In contrast, No. 8835’s 
scope provision reads: 
{¶ 17} “Code 8835 is assigned to both public and privately owned 
enterprises engaged in furnishing nursing or health care services in the homes of 
individual patients.  The employees rendering such services are mostly registered 
nurses or licensed practical nurses.  Employees of this nature are principally 
engaged in administering medications and injections, checking vital signs of 
patients, giving physical therapy treatments, etc. 
{¶ 18} “The assignment of the homemaker service classification, Code 
8835, is also applicable to both public and nonprofit-making organizations 
engaged in providing homemaker services.  The services typically provided 
include preparation of meals, performing light housekeeping chores, providing 
child care and companionship for the infirm or elderly as well as a degree of 
nursing services or other physical assistance as needed by these individuals.”  
(Emphasis added.) 
{¶ 19} RMS provides homemaker services in the homes of individuals.  
Contrary to RMS’s assertions, the fact that it does not provide nursing or medical 
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services is not dispositive, considering the inclusion of nonmedical home care in 
classification 8835’s scope language. 
{¶ 20} RMS insists that the only distinction between codes 8861 and 9110 
and code 8835 is the work location – private home versus group home.  
According to RMS, this distinction renders reclassification an abuse of discretion 
because it is based on location and not on occupational hazard.  This analysis, 
however, assumes that the hazard is the same in both settings, but this is 
something RMS has not established.  The NCCI classifications used by the bureau 
reflect decades of experience in industrial classification.  For the same period of 
time, this court has reiterated, “The experience of men, expert in this department 
of investigation, whose reports are founded upon experience touching the various 
hazards of industries and occupations should be given important consideration.”  
Reaugh Constr., 119 Ohio St. at 209, 6 Ohio Law Abs. 694, 162 N.E. 800.  
Legitimate reasons exist, based upon industrial experience, for creating distinct 
classifications for work performed in a private versus an institutional setting. 
{¶ 21} An institutional setting must meet local and/or state safety codes in 
order to remain open:  burned-out lights are promptly replaced, walks are 
shoveled, and stairs and hallways are debris-free.  A group setting reasonably 
requires that the caregiver has assistance nearby should difficulty arise. 
{¶ 22} None of these more favorable conditions is guaranteed in a private 
residence. Thus, there is reasonable justification for classifying group-home 
services and private-residence services differently and assigning a higher risk to 
the latter. 
{¶ 23} RMS’s position is not advanced by its claim that others performing 
similar services remain under codes 8861 and 9110.  RMS relies on the testimony 
of Gary Brown, a certified public accountant.  His testimony was accorded little 
weight by the bureau, and it is within the bureau’s sound discretion to determine 
how much weight to give to such testimony. 
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{¶ 24} RMS lastly criticizes the bureau for not adequately explaining its 
decision, as required by State ex rel. Noll v. Indus. Comm. (1991), 57 Ohio St.3d 
203, 204, 567 N.E.2d 245.  Upon review, we conclude that the order does 
minimally satisfy Noll.  The order states that RMS is not a charitable or welfare 
organization, which is what codes 8861 and 9110 encompass.  The order, though 
brief, does provide justification for reclassification.  We do not therefore conclude 
that the order is so defective as to warrant its vacation and return to the bureau for 
further consideration. 
{¶ 25} To prevail in mandamus, RMS must show a clear legal right to 
inclusion in codes 8861 and 9110, and it does not do so.  State ex rel. Pressley v. 
Indus. Comm. (1967), 11 Ohio St.2d 141, 40 O.O.2d 141, 228 N.E.2d 631, 
paragraph ten of the syllabus.  The bureau’s reclassification was not an abuse of 
discretion. 
{¶ 26} The judgment of the court of appeals is affirmed. 
Judgment affirmed. 
 
MOYER, C.J., PFEIFER, LUNDBERG STRATTON, O’CONNOR, O’DONNELL, 
LANZINGER and CUPP, JJ., concur. 
__________________ 
Gibson Law Office Co., L.P.A., and J. Miles Gibson, for appellant. 
Marc Dann, Attorney General, and Gerald H. Waterman, Assistant 
Attorney General, for appellee. 
______________________