Opinion ID: 2689948
Heading Depth: 3
Heading Rank: 7

Heading: Constitutionality of R.C. 2315.18

Text: {¶ 80} R.C. 2315.18 does not violate the right to a trial by jury, the right to a remedy, the right to an open court, the right to due process of law, the right to equal protection of the laws, or the separation of powers, and is therefore constitutional on its face. B. Admissibility of Collateral-Benefit Evidence in R.C. 2315.20 {¶ 81} The second certified question concerns the constitutionality of R.C. 2315.20. This statute modifies the collateral-source rule, which has been defined as “ ‘the judicial refusal to credit to the benefit of the wrongdoer money or services received in reparation of the injury caused which emanates from sources other than the wrongdoer.’ ” Pryor v. Webber (1970), 23 Ohio St.2d 104, 107, 52 O.O.2d 395, 263 N.E.2d 235, quoting Maxwell, The Collateral Source Rule in the American Law of Damages (1962), 46 Minn.L.Rev. 669, 670. {¶ 82} R.C. 2315.20 modifies this rule by allowing the defendant in a tort action to introduce evidence of amounts payable to the plaintiff as a result of the injuries suffered unless “the source of collateral benefits has a mandatory selfeffectuating right of subrogation or” a contractual or statutory right of subrogation 24 January Term, 2007 or the benefits were from a life insurance or disability plan. R.C. 2315.20(A). Life insurance or disability payments may still be introduced into evidence if the policies were paid for by the plaintiff’s employer and the employer is the defendant. Id. If a defendant chooses to introduce such evidence, R.C. 2315.20 allows the plaintiff to introduce evidence of the amounts paid to secure the right to receive the benefits. Id. at (B). {¶ 83} After initially challenging the constitutionality of this statute in her motion for partial summary judgment, Arbino realized through discovery that her insurance contract contains a subrogation clause. Given this information, she has conceded that she lacks standing to challenge the statute, but nevertheless asks us to deem it invalid. {¶ 84} Since R.C. 2315.20 does not apply to Arbino, we are bound not to consider her challenge to it. Every court must “refrain from giving opinions on abstract propositions and    avoid the imposition by judgment of premature declarations or advice upon potential controversies.” Fortner v. Thomas (1970), 22 Ohio St.2d 13, 14, 51 O.O.2d 35, 257 N.E.2d 371. It is well-settled law that this court will not issue such advisory opinions. See Egan v. Natl. Distillers & Chem. Corp. (1986), 25 Ohio St.3d 176, 25 OBR 243, 495 N.E.2d 904, syllabus. We therefore decline to answer the second certified question. C. Punitive-Damages Limits in R.C. 2315.21 {¶ 85} The third certified question concerns the constitutionality of R.C. 2315.21, which limits the recovery of punitive damages in certain tort actions.5 The S.B. 80 amendments to this section included a procedure for bifurcation of 5. For the purposes of R.C. 2315.21, “‘[t]ort action’ means a civil action for damages for injury or loss to person or property,” and includes products-liability actions but not actions for breach of contract or other agreement. R.C. 2315.21(A)(1). However, it does not apply to tort actions against the state in the Court of Claims (including actions against a state university or college as detailed in R.C. 3345.40(B)(1)) or to actions against political subdivisions that are commenced under R.C. Chapter 2744. Id. at (E). It also does not apply if another section of the Revised Code meets one of the exceptions set forth in R.C. 2315.21(E)(1) through (4). 25 SUPREME COURT OF OHIO proceedings for compensatory and punitive damages and a limitation on the amount of punitive damages recoverable in tort actions. R.C. 2315.21(B) and (D). Arbino has not challenged the bifurcation process, instead focusing her attack on the punitive-damages limitations. {¶ 86} The statute limits punitive damages in tort actions to a maximum of two times the total amount of compensatory damages awarded to a plaintiff per defendant. Id. at (D)(2)(a). However, these limitations do not apply if the defendant committed a felony in causing the injury, one of the elements of the felony is that is was committed purposely or knowingly, and the defendant was convicted of or pleaded guilty to the felony. Id. at (D)(6). {¶ 87} If the limitations do apply, punitive damages may be limited further if the defendant is a “small employer”6 or an individual. R.C. 2315.21(D)(2)(b). In that case, the punitive damages may not exceed “the lesser of two times the amount of the compensatory damages awarded to the plaintiff from the defendant or ten percent of the employer’s or individual’s net worth when the tort was committed, up to a maximum of three hundred fifty thousand dollars.” Id. {¶ 88} Additionally, punitive damages may not be awarded more than once against the same defendant for the same act or course of conduct once the maximum amount of damages has been reached. R.C. 2315.21(D)(5)(a). However, this restriction can be overcome if the plaintiff offers new and substantial evidence of previously undiscovered behaviors for which punitive damages are appropriate or the prior awards against the defendant were “totally insufficient” to punish the defendant. Id. at (D)(5)(b)(i) and (ii). 6. “Small employer” is defined as an entity with not more than 100 full-time permanent employees or, if the company qualifies as a manufacturer, with not more than 500 full-time permanent employees. R.C. 2315.21(A)(5). 26 January Term, 2007 {¶ 89} Arbino presents the same constitutional challenges to this statute that she raised against R.C. 2315.18. Her arguments are addressed in turn. 1. Right to a Trial by Jury {¶ 90} Arbino’s first challenge to this statute is that it violates the right to a trial by jury under Section 5, Article I of the Ohio Constitution. As explained in Section III.A.1, the fact that a statute limits potential damages as a matter of law does not mean that it violates the right to a jury trial. Therefore, Arbino’s challenge to R.C. 2315.21 can succeed only if the statute actually intrudes upon the jury’s fact-finding function. {¶ 91} To make her case, Arbino cites our decisions in Zoppo and Sheward. She cites Zoppo, 71 Ohio St.3d at 557, 644 N.E.2d 397, for the proposition that “Ohio courts have consistently understood that all damages, without distinction as to type, are for the jury to determine as part of the jury trial right.” {¶ 92} However, Zoppo examined a statute that required trial courts to determine the amount of punitive damages to be awarded, even if the jury was the trier of fact. Zoppo, 71 Ohio St.3d at 556, 644 N.E.2d 397, quoting former R.C. 2315.21(C)(2). We struck that statute as unconstitutional because it wholly removed the jury from the fact-finding process: “[B]y permitting only the court to determine the amount of punitive damages, [the General Assembly] has in effect abrogated the common-law right of the jury to assess the amount of punitive damages.” Id., 71 Ohio St.3d at 557, 644 N.E.2d 397. R.C. 2315.21 does not have this effect; it still permits the trier of fact to determine punitive damages. The subsequent application of a statute to this decision does not abrogate the established function of the jury. {¶ 93} Arbino’s Sheward argument similarly fails. Although the majority discussed its view that a similar limit on punitive damages would unconstitutionally infringe on the jury’s fact-finding function, it did so in dicta 27 SUPREME COURT OF OHIO before striking H.B. 350 as unconstitutional in toto. See 86 Ohio St.3d at 483– 485, 715 N.E.2d 1062; id. at paragraphs two and three of the syllabus. We are therefore not required to follow that view as precedent. See Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, 797 N.E.2d 1256, ¶85 (Sweeney, J., dissenting), quoting Black’s Law Dictionary (6th Ed.1990) 454. {¶ 94} However, even if we were bound by that reasoning, we would be compelled to revisit it. Since Sheward was decided, the United States Supreme Court has clarified the authority of state legislatures in setting punitive damages. “As in the criminal sentencing context, legislatures enjoy broad discretion in authorizing and limiting permissible punitive damages awards.” Cooper Industries, Inc. v. Leatherman Tool Group, Inc. (2001), 532 U.S. 424, 433, 121 S.Ct. 1678, 149 L.Ed.2d 674, citing BMW of N. Am., Inc. v. Gore (1996), 517 U.S. 559, 568, 116 S.Ct. 1589, 134 L.Ed.2d 809 (“States necessarily have considerable flexibility in determining the level of punitive damages that they will allow in different classes of cases and in any particular case”). {¶ 95} This post-Sheward precedent conclusively establishes that regulation of punitive damages is discretionary and that states may regulate and limit them as a matter of law without violating the right to a trial by jury. R.C. 2315.21 represents the General Assembly’s exercise of its powers in this regard, and thus does not violate Section 5, Article I of the Ohio Constitution. 2. Right to a Remedy and Right to an Open Court {¶ 96} Arbino also argues that R.C. 2315.21 violates the right to a remedy in an open court. This right protects against laws that completely foreclose a cause of action for injured plaintiffs or otherwise eliminate the ability to receive a meaningful remedy. See Brennaman, 70 Ohio St.3d at 466, 639 N.E.2d 425; Sorrell, 69 Ohio St.3d at 426, 633 N.E.2d 504. {¶ 97} Like the noneconomic-damages limits in R.C. 2315.18, the punitive-damages limits in R.C. 2315.21 do not deny plaintiffs the right to seek a 28 January Term, 2007 remedy for their tort claims. Further, they do not eliminate the ability to seek a “meaningful” remedy for their injuries, primarily because punitive damages “are not compensation for injury. Instead, they are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence.” Gertz v. Robert Welch, Inc. (1974), 418 U.S. 323, 350, 94 S.Ct. 2997, 41 L.Ed.2d 789. “The purpose of punitive damages is not to compensate a plaintiff, but to punish and deter certain conduct.” Moskovitz v. Mt. Sinai Med. Ctr. (1994), 69 Ohio St.3d 638, 651, 635 N.E.2d 331. {¶ 98} Because punitive damages are separate and apart from any remedy for a plaintiff’s injuries, and because R.C. 2315.21 does not prevent potential plaintiffs from bringing a successful cause of action for their injuries, it does not violate Section 16, Article I of the Ohio Constitution. 3. Due Course of Law/Due Process {¶ 99} Arbino also alleges that R.C. 2315.21 violates the “due course of law” provision in Section 16, Article I of the Ohio Constitution. For the same reasons expressed in Section III.A.3, we will use the rational-basis test for this challenge. Morris, 61 Ohio St.3d at 688–689, 576 N.E.2d 765. a. Real and substantial relation to the general welfare of the public {¶ 100} R.C. 2315.21 does not offend due process under this test. The General Assembly cited several studies and other forms of evidence upon which it relied in concluding that the civil justice system as it then existed was harming the state’s economy. S.B. 80, Section 3(A)(1) through (3), 150 Ohio Laws, Part V, 8024. It then reviewed punitive damages in view of this evidence and concluded that such awards were part of the problem. Section 3(A)(4)(a) and (b). The General Assembly noted that while punitive damages serve the purpose of punishing tortfeasors for certain wrongful actions and omissions, the “absence of a statutory ceiling upon recoverable punitive or exemplary damages in tort actions has resulted in occasional multiple awards    that have no rational connection 29 SUPREME COURT OF OHIO to the wrongful actions or omissions of the tortfeasor.” Section 3(A)(4)(b)(ii). The uncodified section further explained the basis for limitations on awards against small employers7 and stated that the ratio used for the limitation derived from recent United States Supreme Court precedent. Section 3(A)(4)(b) and (c), 150 Ohio Laws, Part V, 8025. {¶ 101} As noted in Section III.A.3, we accept that the evidence cited sufficiently demonstrated the need to reform the civil litigation system in the state. Using this evidence, the General Assembly found that the uncertainty and subjectivity associated with the civil justice system was harming the state’s economy. The reforms codified in R.C. 2315.21 were an attempt to limit the subjective process of punitive-damages calculation, something the General Assembly believed was contributing to the uncertainty. {¶ 102} Arbino assails these findings, arguing that the General Assembly relied on “generalizations about the dilemma of punitive damages, without citation to any specific testimony or evidence supporting its claims.” While we agree with Arbino that the legislative record is thin in this regard, it nonetheless offers justifications sufficient to meet the requirement of a “real and substantial relation” to the general welfare of the public. The general goal of making the civil justice system more predictable is logically served by placing limits that ensure that punitive damages generally cannot exceed a certain dollar figure. Based on its review of the economic evidence, the General Assembly believes that such predictability will aid the state economy. That reasoning is sufficient under the first prong of the analysis. b. Neither arbitrary nor unreasonable 7. In this regard, Section 3(A)(4)(b)(iii) of S.B. 80 stated that the limits were based on the economic capacity to maintain certain numbers of employees and the impact on the community at large, as set forth in the North American Industry Classification System and the United States Small Business Administration’s Office of Advocacy. 150 Ohio Laws, Part V, 8026. 30 January Term, 2007 {¶ 103} Under the second prong, we find that the statute is neither arbitrary nor unreasonable. Setting the limitation at double the amount of compensatory damages received by the plaintiff ensures that the defendant may still be punished. Further, the exceptions for small employers and individuals strike a balance between imposing punishment and ensuring that lives and businesses are not destroyed in the process. This careful compromise represents a level of thought and attention to detail not seen in arbitrary or unreasonable statutes. {¶ 104} For the foregoing reasons, R.C. 2315.21 does not offend the dueprocess protections in Section 16, Article I of the Ohio Constitution. 4. Equal Protection {¶ 105} Arbino also challenges R.C. 2315.21 on equal-protection grounds. Similar to the noneconomic-damages limits discussed in Section III.A.4, this enactment neither infringes on fundamental rights nor discriminates against suspect classes. Therefore, we review it under the rational-basis standard, upholding it if it is rationally related to a legitimate government purpose. See Williams, 88 Ohio St.3d at 530, 728 N.E.2d 342. {¶ 106} For the same reasons discussed in Section III.A.4, R.C. 2315.21 is rationally related to the legitimate state interest of improving the state’s civil justice system and its economy. The limitations imposed on the inherently subjective process of calculating punitive damages were rational responses to the negative effects associated with the uncertainty of the civil litigation system. Although Arbino suggests that different methods could have been used, we will not consider them in the face of a constitutional statute. Because we find that the rational-basis test is satisfied, R.C. 2315.21 is permissible under Section 2, Article I of the Ohio Constitution. 5. Separation of Powers 31 SUPREME COURT OF OHIO {¶ 107} Arbino’s next challenge to R.C. 2315.21 falls under the separation of powers in Section 32, Article II of the Ohio Constitution. She generally alleges that the statute unconstitutionally seizes the judicial power to determine damages and that the General Assembly reenacted legislation previously deemed unconstitutional. As noted in Section III.A.5, statutory damages limits do not intrude on the judicial power to determine damages. The same reasoning applies here. {¶ 108} The argument that the General Assembly simply reenacted a statute previously deemed unconstitutional similarly lacks merit. R.C. 2315.21 is admittedly similar to the punitive-damages statute struck down in Sheward. See Sheward, 86 Ohio St.3d at 483-484, 715 N.E.2d 1062. However, while the majority opinion discussed a potential conflict with the right to a trial by jury in Sheward, it did not invalidate the statute on those grounds, holding instead that H.B. 350 violated the separation of powers and the single-subject rule in toto. Id. at paragraphs two and three of the syllabus. {¶ 109} While the General Assembly reenacted a statute deemed unconstitutional in a prior decision by this court, it did so in a way that alleviated the constitutional concerns advanced therein. Therefore, R.C. 2315.21 does not violate Section 32, Article II of the Ohio Constitution. 6. Single-Subject Rule {¶ 110} Arbino’s final attack on R.C. 2315.21 invokes the single-subject rule in Section 15(D), Article II of the Ohio Constitution. However, as noted in Section III.A.6, Arbino did not challenge S.B. 80 in its entirety, and thus we decline to rule on this challenge. 7. Constitutionality of R.C. 2315.21 {¶ 111} R.C. 2315.21 does not violate the right to a trial by jury, the right to a remedy, the right to an open court, the right to due process of law, the right to 32 January Term, 2007 equal protection of the laws, or the separation of powers, and is therefore constitutional on its face.