Court Opinion

ID: 4695780
Source: CourtListenerOpinion
Date Created: 2021-06-15 19:12:24.336164+00
Date Added: 2024-06-11T08:05:36.979504
License: Public Domain

[Cite as State ex rel. Ohio-Kentucky-Indiana Regional Council of Govts. v. Ohio Bur. of Workers' Comp., 2021-
Ohio-2001.]

                             IN THE COURT OF APPEALS OF OHIO

                                  TENTH APPELLATE DISTRICT

State ex rel. Ohio-Kentucky-Indiana                    :
Regional Council of Governments,
                                                       :
                Relator,
                                                       :                  No. 20AP-56
v.
                                                       :           (REGULAR CALENDAR)
Ohio Bureau of Workers' Compensation,
                                                       :
                Respondent.
                                                       :

                                         D E C I S I O N

                                      Rendered on June 15, 2021

                On brief: Taft Stettinius & Hollister LLP, Samuel M. Duran,
                and Maria C. Castro, for relator.

                On brief: Dave Yost, Attorney General, and John R. Smart,
                for respondent.

                                   IN MANDAMUS
                    ON OBJECTIONS TO THE MAGISTRATE'S DECISION
SADLER, J.
        {¶ 1} Relator, Ohio-Kentucky-Indiana Regional Council of Governments ("OKI"),
brings this original action seeking a writ of mandamus ordering respondent, Ohio Bureau
of Workers' Compensation ("BWC"), to change relator's recently assigned manual
classification for purposes of determining risk and workers' compensation premium rates
and reassign the more favorable manual classifications previously in effect. Relator asserts
that the new manual classification does not fit relator's business activities, was arbitrarily
and capriciously assigned, and was not adequately explained or supported by reasoning in
the relevant orders.
No. 20AP-56                                                                                  2

I. FACTS AND PROCEDURAL HISTORY
        {¶ 2} This matter was referred to a magistrate pursuant to Civ.R. 53 and Loc.R.
13(M) of the Tenth District Court of Appeals. The magistrate issued the appended decision,
including findings of fact and conclusions of law, and recommended this court grant
relator's request for a writ of mandamus. The magistrate determined BWC abused its
discretion by reclassifying OKI as a "[p]ublic employer[], taxing district[]," under R.C.
4123.01(B)(1)(a) and Ohio Adm.Code 4123-17-019(B), and assigning OKI to the "special
public authority" classification under BWC Manual code 9443. The magistrate concluded
that relator fit the definition of a "public service corporation" under R.C. 4123.01(B)(1)(b)
and, therefore, should have retained National Council on Compensation Insurance
("NCCI") Manual codes 8742 (Salespersons or Collectors-Outside) and 8810 (Clerical
Office Employees) for purposes of relator's risk assessment and premium rates.
Accordingly, the magistrate recommended that we issue a writ of mandamus ordering BWC
to vacate its order reclassifying OKI and restore the NCCI Manual classifications previously
in effect.
II. OBJECTIONS
        {¶ 3} Respondent sets forth the following objections:
              1. The magistrate erred by finding the OKI is a "public service
                 corporation" and a private employer.
              2. The magistrate erred in finding the BWC abused its
                 discretion in finding OKI is a public employer
                 appropriately reclassified to Manual 9443.
III. LEGAL ANALYSIS
        {¶ 4} In OKI's first objection, OKI argues that the magistrate erred by finding OKI
is a "public service corporation" and, therefore, a private employer under R.C.
4123.01(B)(1)(b). We find this objection largely dispositive of this matter given the fact that
an employer must be classified either as a "private employer" under R.C. 4123.01(B)(1)(b)
or a "public employer" under R.C. 4123.01(B)(1)(a).
        {¶ 5} Pursuant to R.C. 4123.01(H), "[p]rivate employer" means an employer as
defined in division (B)(1)(b) of this section.      A private employer is defined in R.C.
4123.01(B)(1)(b) as follows:
              Every person, firm, professional employer organization,
              alternate employer organization, and private corporation,
No. 20AP-56                                                                                                3

                  including any public service corporation, that (i) has in
                  service one or more employees or shared employees regularly
                  in the same business or in or about the same establishment
                  under any contract of hire, express or implied, oral or written,
                  or (ii) is bound by any such contract of hire or by any other
                  written contract, to pay into the insurance fund the premiums
                  provided by this chapter.
(Emphasis added.)
         {¶ 6} Here, the dispositive issue in this case is not whether BWC mischaracterized
the particular operations performed by employees of OKI in assigning a manual code but
whether OKI is a public employer or a private employer. BWC contends that the magistrate
erred in concluding that OKI was a "public service corporation." We agree.
         {¶ 7} BWC argues that a public service corporation must be a corporation that
either provides utility services directly to the public or provides passenger or freight services
directly to the public. In support of its position, BWC relies on the definition of the term
"public service corporation" in Ballentine's Law Dictionary which defines the term as: "A
quasi-public corporation, operating for the purpose of supplying gas or electricity to users,
carrying passengers or freight, or otherwise as a public utility."                     Ballentine's Law
Dictionary (3d Ed.2010).1
         {¶ 8} We note that Black's Law Dictionary contains a similar definition of "public
service corporation" as follows:
                  A corporation whose operations serve a need of the general
                  public, such as public transportation, communications, gas,
                  water, or electricity. This type of corporation is usu. subject
                  to extensive governmental regulation.
Black's Law Dictionary 393 (9th Ed.2009).
         {¶ 9} There is no evidence in the stipulated record that OKI provides utility services
to the public. Nor is there evidence that OKI provides any services directly to the public.
Rather, OKI provides "services within the OKI Region as applicable law will permit and the
Board of Directors or the Executive Committee require in order to foster and develop better
coordination, protection and satisfaction of the interests and needs of the public governing

1 The October   20, 1987 BWC Audit Report identifies OKI as a "not for profit corporation." (BWC Audit Report
at 4.)
No. 20AP-56                                                                                                  4

bodies within OKI Region." (Emphasis added.) (Am. and Restated Articles of Agreement
at Article II, Section 2.a.)2
        {¶ 10} We note that R.C. 2909.04 defines the offense of "[d]isrupting public
services" as follows:
                 (A) No person, purposely by any means or knowingly by
                 damaging or tampering with any property, shall do any of the
                 following:
                 (1) Interrupt or impair television, radio, telephone, telegraph,
                 or other mass communications service; police, fire, or other
                 public service communications; radar, loran, radio, or other
                 electronic aids to air or marine navigation or
                 communications; or amateur or citizens band radio
                 communications being used for public service or emergency
                 communications;
                 (2) Interrupt or impair public transportation, including
                 without limitation school bus transportation, or water supply,
                 gas, power, or other utility service to the public;
                 (3) Substantially impair the ability of law enforcement
                 officers, firefighters, rescue personnel, emergency medical
                 services personnel, or emergency facility personnel to
                 respond to an emergency or to protect and preserve any
                 person or property from serious physical harm.
        {¶ 11} While R.C. 2909.04 does not speak directly to the question whether OKI can
be considered a public service corporation for purposes of workers' compensation laws, the
statute is instructive in that it lists the types of services that are considered "public services"
in Ohio.     Though the stipulated record shows that OKI provided services to public
governing bodies, there is no indication in the stipulated record and no argument made by
OKI that it provides any of the "public services" identified in R.C. 2909.04. Even though
the political subdivisions that have contracted with OKI certainly provide such services,
OKI does not. Thus, it is not appropriate to classify OKI as a public service corporation
under R.C. 4123.01(B)(1)(b).
        {¶ 12} In State ex rel. RMS of Ohio, Inc. v. Ohio Bur. of Workers' Comp., 113 Ohio
St.3d 154, 2007-Ohio-1252, the employer at issue was a business that provided in-home

2In OKI's June 5, 2020 brief, OKI represents that it "provides coordinated planning services to federal, state,
and local governments in connection with addressing regional transportation needs throughout eight counties
across Ohio, Kentucky, and Indiana." (OKI's Brief at 3.)
No. 20AP-56                                                                               5

personal-care services to clients who are mentally handicapped or developmentally
disabled. After a BWC audit of the employer's payroll records, BWC reclassified the
employer which resulted in a higher workers' compensation premium. Prior to the audit,
the employer was classified under manual codes covering "Welfare Social Service
Organizations Professional Employees" and "Welfare Social Service Organizations Non-
Professional Employees." Id. at ¶ 2. On finding that the employer was not a welfare or
charitable organization, BWC reclassified the employer and assigned classification codes
pertaining to "Nursing-Home Health, Public and Traveling -- all employees." Id. at ¶ 2.
When BWC denied further review, the employer filed its mandamus action in this court
alleging the reclassification constituted an abuse of discretion by BWC.
       {¶ 13} In a hearing before a magistrate, the employer 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 the prior code classifications covered. Though the
employer also acknowledged that its services were rendered at the clients' homes, the
employer argued that the actual duties of its employees were the same and the risks were
similar. This court found that because the services provided by the employer were not
provided to individuals in a group-home setting and the employer was not a charitable or
welfare organization, the prior code classifications were inaccurate.      Id. at ¶ 20-22.
Accordingly, we denied the requested writ. In so holding, this court afforded deference to
BWC and found no abuse of discretion. Id.
       {¶ 14} Here, OKI claims to be a public service corporation entitled to the rates
assigned to private employers even though OKI does not provide a public service and does
not provide any services directly to the public. Because OKI does not provide a public
service and does not provide any services directly to the public, the magistrate erred in
concluding OKI qualified as a public service corporation under R.C. 4123.01(B)(1)(b). See
RMS of Ohio.
       {¶ 15} Accordingly, BWC's first objection is sustained.
       {¶ 16} In BWC's second objection, BWC argues the magistrate erred in concluding
BWC abused its discretion in finding OKI was a public employer under manual code 9443.
The magistrate found that "Manual 9443 is not an NCCI classification. Manual 9443
(Special Public Authorities) is a 'state special,' or classification enacted by the state in
No. 20AP-56                                                                                     6

supplementation or exception to the NCCI manuals." (Mag.' s Decision at ¶ 45.) There is
no objection to this finding.3
       {¶ 17} As previously noted, in RMS of Ohio the Supreme Court of Ohio "recognized
the challenges involved in establishing premium rates for workers' compensation coverage
and have repeatedly confirmed the deference due the agency in these matters." Id. at ¶ 6.
The court further stated:
                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.       [State ex rel.] Progressive
                Sweeping [Contrs. v. Bur. of Workers' Comp.], 68 Ohio St.3d
                [393], 395-396 [1994].
                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 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. 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.
Id. at ¶ 6-7.
       {¶ 18} In State ex rel. G&S Metal Prods. Co. v. Ryan, 10th Dist. No. 09AP-387,
2010-Ohio-3835, the employer, a metal stamping company, filed a protest when BWC
conducted an audit and concluded that "all of relator's employees at the Cleveland facility
should have been reported under the classification number 3400, entitled 'METAL
STAMPED GOODS MFG. NOC.' " Id. at ¶ 5. Prior to the audit, the employer reported all
the employees at the Cleveland facility under classification number 8018, "STORE:
WHOLESALE NOC." Id. The employer argued it was entitled to a separate classification
for employees at the Cleveland facility who engaged in non-press operations. BWC's
adjudicating committee denied the employer's appeal on concluding the non-press

3Manual code 9443 provides in relevant part as follows: "State Special: applies in OH PHRASEOLOGY:
SPECIAL PUBLIC AUTHORITIES, EXCLUDING TRANSIT AUTHORITIES: ALL EMPLOYEES &
CLERICAL, CLERICAL TELECOMMUTER, SALESPERSONS, DRIVERS." (June 20, 2019 Final Order at 2.)
See also Ohio Adm.Code 4123-17-34, Appendix A.
No. 20AP-56                                                                                             7

operations carried on at the facility were merely incidental to the metal stamping operation
and could not exist as a business separate from the metal stamping operation.
        {¶ 19} The employer filed a mandamus action arguing BWC abused its discretion by
ordering reclassification. The magistrate found BWC did not abuse its discretion when it
concluded the non-press operations could not exist as a separate business for classification
purposes. In adopting the magistrate's decision, we made the following observation about
the employer's argument for reclassification:
                This argument goes not to the presence or absence of evidence
                to support BWC's conclusion that the non-press operations
                could not exist as a separate business, but rather to the
                conclusion itself. In other words, the cited evidence could as
                easily have been used to reach the conclusion that those
                operations could exist as a separate business as it was to reach
                the conclusion that the operations could not exist as a separate
                business. We cannot say that BWC abused its discretion when
                it chose between the two competing inferences and concluded
                that the non-press operations could not exist as a separate
                business.
Id. at ¶ 15.
        {¶ 20} G&S Metal Prods. Co. stands for the proposition that where BWC chooses
among competing inferences supported by the evidence in reaching a conclusion as to the
proper manual code applicable to the employer, this court will generally defer to BWC.
Here, as was the case in G&S Metal Prods. Co., OKI's primary argument is not that the
particular duties of OKI's employees are better described in manual codes 8742 and 8810,
rather than manual code 9443, but that those duties were performed for a private employer
rather than a pubic employer.4 In this particular instance, BWC was tasked with setting the
rates for an employer who identifies itself as a "public body" and has many attributes of a
public employer but also retains certain characteristics of a private employer. BWC chose
to treat OKI as a public employer and assign the appropriate manual code that pertains to
a public employer in OKI's business. We generally defer to BWC's choice among the
competing inference supported by the evidence. Id.
        {¶ 21} Moreover, in the context of reclassification, the Supreme Court has imposed
on BWC the obligation to adequately explain their decisions. State ex rel. Aaron Rents, Inc.

4"Simply, Manual 9443 is not the best manual classification code to describe OKI's business because Manual
9443 is reserved for public employers and OKI is a private employer." (OKI's Reply Brief at 9.)
No. 20AP-56                                                                                    8

v. Ohio Bur. of Workers' Comp., 129 Ohio St.3d 130, 2011-Ohio-3140, ¶ 10, quoting State
ex rel. Craftsmen Basement Finishing Sys. v. Ryan, 121 Ohio St.3d 492, 2009-Ohio-1676,
¶ 15. Accordingly, "[a]n order must 'inform the parties and potentially a reviewing court of
the basis of the [agency's] decision.' " Aaron Rents at ¶ 10, quoting State ex rel. Yellow
Freight Sys., Inc. v. Indus. Comm., 71 Ohio St.3d 139, 142 (1994).
       {¶ 22} Here, BWC explained its decision to reclassify OKI as follows:
              [I]t is BWC's practice to designate an entity a "special district"
              where two or more taxing districts or political subdivisions
              unite to provide a public service. The Adjudicating Committee
              set forth indicia common to entities considered to be "special
              districts," citing to Mandelker & Netsch, State and Local
              Government in a Federal System (1977). Those criteria are
              whether the entity: (1) is organized to perform one or more
              services or functions; (2) is governed by a board of directors
              that possesses administrative independence from other units
              of local government; (3) has independent financial and
              revenue powers similar to those of other local government
              units; (4) is a separate corporate entity created by state-
              enabling legislation; and (5) has perpetual existence. Id.
              In addition to the criteria above, BWC considers other factors
              to determine whether an employer should be classified as a
              "special public authority" under manual code 9443.
              Specifically, the Adjudicating Committee analyzed the
              "special district" factors, in conjunction with R.C. 167.01
              (OKI's enabling statute), and reviewed OKI's bylaws to
              conclude OKI was appropriately reclassified under 9443.
(BWC Final Order at 4.)
       {¶ 23} In our view, BWC adequately explained the reason for reclassifying OKI as a
special public authority and assigning manual code 9443. OKI nevertheless contends that
it cannot be properly classified under the "[p]ublic employers, taxing districts"
classification without having any taxing authority. We disagree.
       {¶ 24} Under R.C. 4123.01(J), "[p]ublic employer" means an employer as defined in
division (B)(1)(a) of this section. A public employer is defined in R.C. 4123.01 as follows:
              "Employer" means:
              (a) The state, including state hospitals, each county, municipal
              corporation, township, school district, and hospital owned by a
              political subdivision or subdivisions other than the state.
No. 20AP-56                                                                                           9

        {¶ 25} Ohio Adm.Code 4123-17-01 amplifies R.C. 4123.01(B)(1)(a) by identifying
two distinct types of public employers: "[p]ublic employers, taxing districts" and "[p]ublic
employers, state of Ohio, its agencies and instrumentalities." Ohio Adm.Code 4123-17-
01(B) and (C). The term "[p]ublic employers, taxing districts" is not defined in Ohio
Adm.Code 4123-17-01 or elsewhere in the relevant code provisions. There is no argument
in this case that BWC exceeded its statutory authority by enacting Ohio Adm.Code 4123-
17-01. Rather, OKI's argument is that it does not fit the category "[p]ublic employers, taxing
districts" in Ohio Adm.Code 4123-17-01(B) because OKI does not have independent taxing
authority. We disagree.
        {¶ 26} Ohio Adm.Code 4123-17-34, entitled "[p]ublic employer taxing districts
contribution to the state insurance fund," provides as follows:
                The administrator hereby sets base rates and expected loss
                rates to be effective January 1, 2019 applicable to the payroll
                reporting period January 1, 2019 through December 31, 2019
                for public employer taxing districts as indicated in the
                appendix to this rule.5
        {¶ 27} Appendices A and B to Ohio Adm.Code 4123-17-34 identify numerous
governmental and quasi-governmental employers that are considered by BWC as "[p]ublic
employers, taxing districts" under Ohio Adm.Code 4123-17-01(B) for purposes of
establishing workers' compensation premium rates. In addition to traditional public
employers such as counties, cities, townships, and villages, Ohio Adm.Code 4123-17-34
identifies public libraries, special public universities, and public hospitals as "public
employer, taxing districts," even though such public bodies do not have independent taxing
authority. "Special public authorities" are also identified as "[p]ublic employers, taxing
districts" in the appendices. The question raised in this mandamus action is whether it is
reasonable for BWC to interpret Ohio Adm.Code 4123-17-01 in this manner. We believe
that it is.
        {¶ 28} "[A]n administrative rule that is issued pursuant to statutory authority has
the force of law unless it is unreasonable or conflicts with a statute covering the same
subject matter." State ex rel. Celebrezze v. Natl. Lime & Stone Co., 68 Ohio St.3d 377, 382
(1994), citing Youngstown Sheet & Tube Co. v. Lindley, 38 Ohio St.3d 232, 234 (1988).

5 Ohio Adm.Code 4123-17-34 has been periodically amended to reflect the current applicable year, but the
remaining provision and the appendices have remained the same during the relevant time period.
No. 20AP-56                                                                               10

This principle of deference is applied to rules adopted by BWC. State ex rel. HGC Ents. v.
Buehrer, 10th Dist. No. 12AP-482, 2013-Ohio-2108, ¶ 55, citing Northwestern Ohio Bldg.
& Constr. Trades Council v. Conrad, 92 Ohio St.3d 282 (2001); State ex rel. McLean v.
Indus. Comm., 25 Ohio St.3d 90 (1986). The Supreme Court has also recognized "the long-
accepted principle that considerable deference should be accorded to an agency's
interpretation of rules the agency is required to administer." Natl. Lime & Stone Co. at 382,
citing State ex rel. Brown v. Dayton Malleable, Inc., 1 Ohio St.3d 151, 155 (1982), citing
Jones Metal Prods. Co. v. Walker, 29 Ohio St.2d 173, 181 (1972). In the context of workers'
compensation premiums, the Supreme Court has repeatedly acknowledged the difficulty of
setting workers' compensation rates and has deferred to BWC's determination in these
matters unless the agency has acted in an arbitrary, capricious, or discriminatory manner.
HGC Ents. at ¶ 55, citing State ex rel. Cafaro Mgt. Co. v. Kielmeyer, 113 Ohio St.3d 1, 2007-
Ohio-968.
       {¶ 29} Here, the stipulated record shows that multiple public governing bodies
within several contiguous states entered into an agreement to create OKI as a regional
council pursuant to R.C. 167. OKI represents multiple public governing authorities,
including counties, townships, and other public bodies, all of which are taxing districts.
OKI identifies itself as a "public body" in its Restated Amended Articles of Agreement, and
it is governed and controlled by the elected officials and employees of the various public
governing bodies who created it. OKI was created to act as an area-wide agency for the
purpose of performing collectively that which each of the public governing bodies was
authorized to perform on its own. See R.C. 167.03; Shaker Heights ex rel. Cannon v.
DeFranco, 8th Dist. No. 98063, 2012-Ohio-3965. Though OKI does not have independent
taxing authority, OKI's operations are funded by state and federal government grants.
       {¶ 30} As previously noted, the purpose of the classification system is to group
employers with similar business within this state into classifications that reflect the
exposures common to those employers. We do not find BWC acted unreasonably when it
adopted manual code 9443, "special public authorities," as a manual code pertaining to
"[p]ublic employers, taxing districts." Nor do we believe, on this record, that BWC abused
No. 20AP-56                                                                                                 11

its discretion when it assigned OKI to a manual code representing a group of public
employers that conduct similar business in this state.6
        {¶ 31} The Supreme Court has cautioned that "[t]he bureau should not be permitted
under the guise of administrative convenience to shoehorn an employer into a classification
which does not remotely reflect the actual risk encountered." State ex rel. Progressive
Sweeping Contrs., Inc. v. Bur. of Workers' Comp., 68 Ohio St.3d 393, 396 (1994). In this
instance, rather than classifying OKI as a "private corporation" or a "public service
corporation," classifications which are not appropriate, BWC created a classification
designed to capture Ohio employers, such as OKI, that do not fit neatly within the existing
classifications and have many of the characteristics associated with public employers and
special taxing districts. We cannot say BWC acted arbitrarily or unreasonably in adopting
manual code 9443, as a means to adequately reflect the risk associated with the operation
of a special public authority such as OKI. Moreover, having determined that OKI is not a
"public service corporation," as that term is used in R.C. 4123.01(B)(1)(b), we cannot agree
with the magistrate that OKI is a private employer. We also find it difficult to conceive of
OKI as a "private corporation," as that term is used in R.C. 4123.01(B)(1)(b), when OKI's
Restated Amended Articles of Agreement identify OKI as a public body.
        {¶ 32} For the foregoing reasons, we sustain BWC's second objection.
IV. CONCLUSION
        {¶ 33} On examination of the magistrate's decision, an independent review of the
record pursuant to Civ.R. 53, and consideration of BWC's objections, we find the magistrate
has properly determined the facts but misapplied the applicable law. Accordingly, we
sustain BWC's objections, and we deny the requested a writ of mandamus.
                                                                                  Objections sustained;
                                                                             writ of mandamus denied.
                     LUPER SCHUSTER and BEATTY BLUNT, JJ., concur.
                                           _____________

6 We note that OKI's business within this state is similar to that of "special taxing districts," such as joint
hospital districts, park districts, port authorities, or joint economic development districts ("JEDDs"). "[A]
JEDD is a special taxing district, independent of the individual governmental entities that contracted to form
the JEDD." Desenco, Inc. v. Akron, 84 Ohio St.3d 535, 540 (1999). Any one or more counties, municipal
corporations, or townships in the state may adopt a charter form of government, enabling the cities and
townships within that county to form JEDDs. Id. See also R.C. 715.70(A).
No. 20AP-56                                                                             12

                                      APPENDIX

                         IN THE COURT OF APPEALS OF OHIO

                             TENTH APPELLATE DISTRICT

State ex rel. Ohio-Kentucky-Indiana          :
Regional Council of Governments,
                                             :
              Relator,
                                             :
v.                                                                No. 20AP-56
                                             :
Ohio Bureau of Workers' Compensation,                        (REGULAR CALENDAR)
                                             :
              Respondent.
                                             :

                         MAGISTRATE'S DECISION

                             Rendered on December 7, 2020

              Taft Stettinius & Hollister LLP, Samuel M. Duran, and
              Maria C. Castro, for relator.

              Dave Yost, Attorney General, and John R. Smart, for
              respondent.

                                      IN MANDAMUS

       {¶ 34} Relator, the Ohio-Kentucky-Indiana Regional Council of Governments
("OKI") brings this original action seeking a writ of mandamus ordering respondent, Ohio
Bureau of Workers' Compensation ("BWC" or "bureau"), to change relator's recently-
assigned manual classification for purposes of determining risk and workers' compensation
premium rates, and reassign the more favorable manual classifications previously in effect.
Relator asserts that the new manual classification does not fit relator's employer and
employee activities, was arbitrarily and capriciously assigned, and was not adequately
explained or supported by reasoning in the relevant commission orders.
Findings of Fact:
No. 20AP-56                                                                                   13

        {¶ 35} 1. OKI is a non-profit corporation organized under Chapter 167 of the Ohio
Revised Code, which provides for councils of local governments, business organizations,
and community groups. (Stip. at 72-104.)
        {¶ 36} 2. OKI provides planning and coordination services to federal, state, and local
governments for implementation of regional transportation solutions in eight contiguous
counties in its three namesake states.
        {¶ 37} 3. OKI's staff generally consists of clerical and administrative staff who
remain in the office, and field representatives who split time between the office and travel
to conduct field work including surveys, supervision of activities of local agencies, and
meetings with stakeholders.
        {¶ 38} 4. OKI has through the years operated under various manual classifications
reflecting the two different classes of employees. Manual classifications were reviewed in
1970, 1987, and 1995. In 1995, OKI's administrative and clerical employees were assigned
Ohio Manual 8810-04, and employees with some duties outside the office received Ohio
Manual 8747-07, council or government staff member/office and away from office.
        {¶ 39} 5. Beginning in 1996, BWC gradually converted its manual classifications to
a uniform national standard established by the National Council on Compensation
Insurance ("NCCI"). BWC eventually assigned NCCI Manuals 8742 (Salespersons or
Collectors-Outside) and 8810 (Clerical Office Employees) for OKI employees. (Stip. at 67.)
        {¶ 40} 6. BWC conducted another audit of OKI's account in 2010, and again
assigned NCCI Manuals 8742 and 8810 to OKI staff.
        {¶ 41} 7. After review of OKI's account, on September 11, 2018, BWC informed OKI
that it had incorrectly classified OKI as a private employer instead of a public taxing district.
(Stip. at 116.) BWC assigned Manual 9443 (Special Public Authorities) for all OKI's
employees regardless of duties. (Stip. at 116.) The notice specified that BWC based the
change upon ascertaining that OKI was incorporated under R.C. Chapter 167, and that this
made OKI a "special district" and therefore a "public entity" for workers' compensation
rating. (Stip. at 114.) The change greatly increased OKI's premium rates. (Stip. at 116.)
        {¶ 42} 8. OKI sought review of the reclassification by BWC, which again determined
that OKI should be classified as a special public authority and public employer. (Stip. at
118.)
No. 20AP-56                                                                                 14

       {¶ 43} 9. The adjudicating committee reviewed BWC's decision and held a hearing
on March 7, 2019. On March 29, 2019, the adjudicating committee issued an order
upholding the reclassification. (Stip. at 134-39.)
       {¶ 44} 10. OKI further appealed the order of the adjudicating committee and a
hearing was held before the administrator's designee on June 20, 2019. (Stip. at 141-49.)
The administrator's designee issued an order on October 29, 2019 upholding the order of
the adjudicating committee. (Stip. at 144-49.)
       {¶ 45} 11. Manual 9443 is not an NCCI classification. Manual 9443 (Special Public
Authorities) is a "state special," or classification enacted by the state in supplementation or
exception to the NCCI manuals.
       {¶ 46} 12. OKI funds its activities through grants from the U.S. Department of
Transportation, and state and local government funding.
       {¶ 47} 13. OKI is governed by a large board of trustees made up of representatives
of the member governments. These meet annually to elect a smaller executive committee.
       {¶ 48} 14. The adjudicating committee noted that OKI's amended articles of
agreement, under the heading Powers and Purposes, defined OKI as "a public body"
governed by a board of directors and executive committee made up of member
governments. (Stip. at 138.)
       {¶ 49} 15. OKI has no taxing authority.
       {¶ 50} 16. OKI's employees are not enrolled in a public employee retirement system.
Discussion and Conclusions of Law:
       {¶ 51} To obtain the requested writ of mandamus, OKI must show that it has a clear
legal right to the requested relief, there is a clear legal duty on the part of BWC to provide
the relief, and OKI lacks an adequate remedy in the ordinary course of the law. State ex rel.
Pressley v. Indus. Comm., 11 Ohio St.2d 141, 162-63 (1967). A clear legal right to a writ
exists when the relator shows that BWC has abused its discretion by issuing an order that
is not supported by evidence in the record. State ex rel. Burley v. Coil Packing, Inc., 31 Ohio
St.3d 18, 20 (1987); State ex rel. Elliott v. Indus. Comm., 26 Ohio St.3d 76, 78-79 (1986). "
'Abuse of discretion' " has been defined as an attitude that is unreasonable, arbitrary or
unconscionable. Huffman v. Hair Surgeon, Inc. (1985), 19 Ohio St. 3d 83, 87, 19 OBR 123,
126, 482 N.E. 2d 1248, 1252. It is to be expected that most instances of abuse of discretion
No. 20AP-56                                                                                 15

will result in decisions that are simply unreasonable, rather than decisions that are
unconscionable or arbitrary. A decision is unreasonable if there is no sound reasoning
process that would support that decision." AAAA Ent. Inc. v. River Place Community
Urban Redevelopment Corp., 50 Ohio St.3d 157, 161 (1990).
       {¶ 52} Pursuant to R.C. 4123.29(A)(1), BWC must classify every employer by degree
of hazard and place employers in the appropriate manual classification identifying
employee duties and corresponding risk. See generally, State ex rel. Aaron Rents, Inc. v.
Ohio Bur. of Workers' Comp., 129 Ohio St.3d 130, 2011-Ohio-3140, ¶ 6. As exemplified by
the history of OKI's classification in Ohio, Ohio Adm.Code 4123-17-08 calls for BWC to
apply NCCI manual classifications. Under R.C. 4123.29 and Ohio Adm.Code 4123-17-
08(D), " 'the purpose of the classification procedure is to assign the one basic classification
that best describes the business of the employer within a state. Subject to certain exceptions
described in this rule, each classification includes all the various types of labor found in a
business.' " State ex rel. Accurate Inventory & Calculating Servs v. Buehrer, 10th Dist. No.
14AP-1008, 2016-Ohio-7004 (Mag. Decision), quoting Ohio Adm.Code 4123-17-08(D).
When applying its discretion in classifying employers, "[t]he bureau is afforded 'a wide
range of discretion' in dealing with the 'difficult problem' of occupational classification."
State ex rel. Roberds, Inc. v. Conrad, 86 Ohio St.3d 221-22 (1999), quoting State ex rel.
McHugh v. Indus. Comm., 140 Ohio St. 143, 149 (1942). Courts will therefore generally
defer to the bureau's expertise in premium matters and find an abuse of discretion only
when the classification is "arbitrary, capricious, or discriminatory." State ex rel.
Progressive Sweeping Contrs. v. Bur. of Workers' Comp., 68 Ohio St.3d 393, 396 (1994).
       {¶ 53} OKI points out that, pursuant to Ohio Adm.Code 4123-17-01, Ohio recognizes
three types of employers for purposes of workers' compensation classification: (1) private
employers, (2) public employers, taxing districts, and (3) public employers, state of Ohio,
its agencies and instrumentalities. Ohio Adm.Code 4123-17-34 provides that Manual Code
9443 falls under the "public employer taxing district" category. OKI asserts that it is not a
"public employer" as such is defined under the revised code, and therefore cannot fall under
Manual 9443. R.C. 4123.01(B)(1)(a) defines a public employer as "[t]he state, including
state hospitals, each county, municipal corporation, township, school district, and hospital
No. 20AP-56                                                                                  16

owned by a political subdivision or subdivisions other than the state." R.C. 4123.01(B)(1)(b)
defines private employer as follows:
              Every person, firm, professional employer organization, and
              private corporation, including any public service corporation,
              that (i) has in service one or more employees or shared
              employees regularly in the same business or in or about the
              same establishment under any contract of hire, express or
              implied, oral or written, or (ii) is bound by any such contract
              of hire or by any other written contract, to pay into the
              insurance fund the premiums provided by this chapter.

       {¶ 54} OKI concedes that it provides a public service, but does not concede that this
makes it a public employer, since R.C. 4123.01(B)(1)(a) expressly contemplates that public
service corporations may be private employers. OKI stresses that OKI is not a taxing
district. OKI further points out that R.C. Chapter 167 provides that membership in a
regional council of governments does not constitute holding a public office or constitute
public employment.
       {¶ 55} BWC responds that OKI is not assigned Manual 9443 on the basis that it is a
taxing district in itself, but under BWC's practice to designate an entity as a special district
when two or more taxing districts or political subdivisions unite to provide a public service.
       {¶ 56} While both parties in this action acknowledge that no manual classification
can perfectly fit all the risk ramifications of employees assigned thereto, OKI does point out
that BWC's reasoning must address the hazard imposed by the occupation when it assigns
a manual classification. State ex rel. Craftsmen Basement Finishing Sys., Inc. v. Ryan, 121
Ohio St.3d 492, 2009-Ohio-1676, ¶ 20-22. The magistrate notes that while the previous
classification of some of OKI's staff "outside salespersons" does not coincide with the fact
that these individuals performed no sales duties, the manual could well have been the best
fit for persons performing occasional consulting and conferencing duties outside the office
setting and, thus, involving some travel. BWC's assertion, therefore, that OKI must prove a
more apt manual than the current 9443 classification is not particularly persuasive,
considering that BWC was satisfied with OKI's previous classification for many years and
that the previous classification does not appear irrational.
       {¶ 57} Nonetheless, BWC's reclassification of OKI in this case appears entirely based
upon a reevaluation of OKI as a public employer rather than a private employer. The
No. 20AP-56                                                                                 17

magistrate concludes that this reclassification was an abuse of discretion because OKI,
despite being publicly funded, does not fit Ohio's statutory definition of a public employer
under R.C. 4123.01(B)(1)(a). In contrast, OKI falls within R.C. 4123.01(B)(1)(b)'s definition
of a private employer "including any public service corporation." While OKI is funded by
taxing districts it is not a taxing district itself, and no definition has been provided, other
than BWC's self-announced custom, for determining that a publicly funded entity receiving
some measure of support through tax revenue is itself a taxing district under Ohio law.
       {¶ 58} It is therefore the magistrate's decision that BWC has abused its discretion in
determining that OKI is a public employer. Under statutory definitions, OKI is a private
employer and therefore may not be assigned Manual 9443. The magistrate recommends
that a writ issue ordering BWC to grant a new hearing and assign the appropriate private-
employer manual based upon BWC's assessment of appropriate risk factors and
characteristics of OKI's work force duties.

                                               /S/ MAGISTRATE
                                               MARTIN L. DAVIS

                              NOTICE TO THE PARTIES

              Civ.R. 53(D)(3)(a)(iii) provides that a party shall not assign as
              error on appeal the court's adoption of any factual finding or
              legal conclusion, whether or not specifically designated as a
              finding of fact or conclusion of law under Civ.R.
              53(D)(3)(a)(ii), unless the party timely and specifically objects
              to that factual finding or legal conclusion as required by Civ.R.
              53(D)(3)(b).