Opinion ID: 7013436
Heading Depth: 2
Heading Rank: 1

Heading: History of Suits for Work-Related Injury in Ohio

Text: In 1924, Article II, Section 35 of the Ohio Constitution was amended to provide: For the purpose of providing compensation to workmen and their dependents, for death, injuries or occupational disease, occasioned in the course of such workmen’s employment, laws may be passed establishing a state fund to be created by compulsory contribution thereto by employers, and administered by the state, determining the terms and conditions upon which payment shall be made therefrom. Such compensation shall be in lieu of all other rights to compensation, or damages, for such death, injuries, or occupational disease, and any employer who pays premiums or compensation provided by law, passed in accordance herewith, shall not be liable to respond in damages at common law or by statute for such death, injuries or occupational disease. Following this amendment, the Ohio General Assembly created the State Insurance Fund for payment of compensation for injuries covered under the workers’ compensation system. All Ohio employers were required to pay premiums for coverage by the State Insurance Fund or to make arrangements to self-insure the compensation due their employees for injuries arising out of and in the course of employment. In 1982, the Ohio Supreme Court decided Blankenship v. Cincinnati Milacron Chem., Inc., 69 Ohio St.2d 608, 433 N.E.2d 572 (1982), which held that the Ohio Constitution did not preclude actions for damages for workplace injuries suffered as a result of the employer’s intentional conduct. Id. at 576. The General Assembly responded with the Intentional Tort Act, Ohio Revised Code (“ORC”) § 4121.80, which became effective on August 22, 1986. The Intentional Tort Act declared the immunity from common law suit established in Article II, Section 35 of the Ohio Constitution an essential aspect of the Ohio Workers’ Compensation System and explained that the System was intended to remove from the common law tort system all disputes between employers and employees except as expressly provided by the Act. ORC § 4121.80(B). The Intentional Tort Act restored to employers the complete, state-controlled coverage of employee claims for workplace injury in two ways. First, it created the Intentional Tort Fund [hereinafter “Fund”] to complement the State Insurance Fund’s monopoly of insurance coverage for workers’ compensation claims. The Act required that employers participate in the Fund to cover their risk of loss from employee claims for workplace injury not covered by the workers’ compensation system, ORC § 4121.80(D), and that the Ohio Workers’ Compensation Administrator pay all damages, defense attorney fees, and costs out of the assets of the Fund, ORC § 4121.80(E). Second, the Intentional Tort Act regulated and limited employee claims of injuries resulting from the intentional acts of employers. Each such claim was required to be submitted to a judge of the Ohio Court of Common Pleas who would determine liability for damages, that is, whether the employer committed an intentional act that caused the injury. ORC § 4121.80(D). If the Common Pleas Court found the employer liable, the Industrial Commission of Ohio would then determine the amount of damages and make an award, which could not exceed $1,000,000.00. Id. The Intentional Tort Act did not contain any provision for settlement of these claims. From 1982 until the Intentional Tort Act was enacted in 1986, Ohio employers, including the original plaintiff in this action, Rossborough Manufacturing Company [hereinafter “Rossborough”], could and did obtain commercial insurance policies or endorsements, called “stop-gap” insurance, for the purpose of covering the new risk of loss from employee claims for workplace injuries created by Blankenship. From August 22, 1986, onward, Ohio employers, including Rossborough, were required to purchase their insurance coverage for the post -Blankenship employee claims for workplace injury from the Intentional Tort Fund. On January 31, 1991, the Ohio Court of Appeals explicitly recognized that the Intentional Tort Act did not mention settlement agreements. Chrysler Motors Corp. v. Mayfield, No. 89AP-1203, 1991 WL 10915, at  (Ohio Ct.App. Jan. 31, 1991). That court held that the Fund was not created to reimburse employers for amounts paid pursuant to settlement of claims; rather, the Intentional Tort Act required a court determination of liability followed by the Industrial Commission’s determination of damages, which were to be paid from the Fund, not from the employer’s pocket. Id. The Intentional Tort Act remained good law until August 27, 1991, when the Ohio Supreme Court held the Act unconstitutional in toto because it exceeded the scope of legislative authority granted to the Ohio General Assembly under the Ohio Constitution. Brady v. Safety-Kleen Corp., 61 Ohio St.3d 624, 576 N.E.2d 722, 724-25 (1991). The Ohio Supreme Court found that the Workers’ Compensation Act afforded protection for negligent acts but not for intentional conduct and that the Intentional Tort Act did not further the purposes of Article II, Section 35 of the Ohio Constitution; rather, it circumvented that section completely. Id. at 729. Announcing that intentional acts committed by an employer, even if committed at the workplace, are outside the scope of the purposes of the Ohio Constitution, id., the Ohio Supreme Court held that an employee has the right to receive workers’ compensation benefits and has in addition a cause of action against an employer for an excess of damages over the amount received or receivable under the Ohio Constitution, id. at 729-30. In response to Brady, the Ohio General Assembly enacted an uncodified law, S.B. 192, 119th Gen. Assem., Reg. Sess. (Ohio 1992) (enacted) [hereinafter “S.B. 192”], which was signed by the Governor on June 30, 1992, and became effective on September 29, 1992. S.B. 192 § 2 formally repealed the unconstitutional Intentional Tort Act. Section 5 of S.B. 192 required the transfer of the Fund’s assets into a new Intentional Tort Disbursement Fund that was to be in the custody of the State Treasurer but not part of the state treasury, and was to be used solely to “pay attorney’s fees ... to attorneys for services provided on behalf of an employer under former section 4121 of the Revised Code for attorney’s fees filed on or before October 27,1991,” up to a total amount not to exceed $1,000,000; to pay for the costs of administration of the Fund in an amount not to exceed $50,000; and from the moneys remaining, to prorate a credit to the administrative assessment of employers that had paid into the Intentional Tort Fund, reducing such credit for amounts paid out either in awards or attorney’s fees pursuant to the prior section 4121.80. As of February 20, 1992, the Fund had total assets of $37,986,824.69. The Brady decision and the enactment of S.B. 192 were followed by an Ohio Supreme Court per curiam decision on September 2, 1992, holding that Brady’s invalidation of the Intentional Tort Act in its entirety had negated any right of employers to reimbursement from the intentional tort fund for moneys paid out in settlement of claims and attorney fees. Chrysler Motors Corp. v. Mayfield, 64 Ohio St.3d 505, 597 N.E.2d 118, 119 (1992).