Court Opinion

ID: 6787390
Source: CourtListenerOpinion
Date Created: 2022-07-21 01:04:58.788296+00
Date Added: 2024-06-11T16:02:58.065607
License: Public Domain

Moyer, C.J.,
concurring in judgment only.
{¶ 22} I write separately to explain my reasons for concurring with the majority decision. Although I agree with the ultimate holding of the majority, I do not agree that the constitutionality of former R.C. 4123.93 depends on its similarities to the statute analyzed in Holeton v. Crouse Cartage Co. (2001), 92 Ohio St.3d 115, 748 N.E.2d 1111. Rather, I believe that the constitutionality of former R.C. 4123.93 depends on whether the government has a rational basis for distinguishing between employees who settle their claims against third-party tortfeasors before initiating a lawsuit and those who settle after initiating a lawsuit.
I
{¶ 23} This case addresses the constitutionality of former R.C. 4123.93, 145 Ohio Laws, Part II, 3188-3189, which became effective when this court held its successor statute, R.C. 4123.931, unconstitutional in Holeton. Both former R.C. 4123.93 and its successor statute governed the circumstances in which a self-insured employer who has paid workers’ compensation benefits to an employee for an injury caused by a third-party tortfeasor may “step into the legal shoes” of the employee and exercise his or her right to recover damages from the tortfeasor. Of critical legal import, however, is that the event that triggers this statutory right of subrogation in former R.C. 4123.93 differs significantly from the event that triggers that right in R.C. 4123.931. I examine each statute *198separately to highlight this important difference and to make clear the manner in which that difference should affect our analysis.
A
{¶ 24} The statute at issue in Holeton, R.C. 4123.931(D), distinguished between two groups of employees: those who fully litigated their claims against third-party tortfeasors and those who settled such claims. 146 Ohio Laws, Part II, 3596-3597. If the employee litigated the third-party claim to completion, the statute allowed the employee to obtain jury interrogatories segregating the damages that did not represent workers’ compensation benefits and, therefore, were not subject to the reimbursement right of the statutory subrogee. 92 Ohio St.3d at 125, 748 N.E.2d 1111. If the employee settled, by contrast, the entire amount of the settlement was presumed to be subject to the reimbursement right of the statutory subrogee. Id. at 125-126, 748 N.E.2d 1111. Hence, the statute treated employees who fully litigated third-party claims more favorably than the employees who settled by affording the former a protection not afforded the latter.
{¶ 25} In addressing the constitutionality of R.C. 4123.931(D), the majority in Holeton held that the statute violated the Ohio Constitution because claimants who opted for settlement, unlike claimants who opted for trial, “ ‘ha[d] no comparable method or opportunity to shield a portion of their damages from the subrogee.’ ” Id. at 132, 748 N.E.2d 1111, quoting from the petitioners’ brief. I dissented. Id. at 135-139, 748 N.E.2d 1111. My disagreement with the majority centered on whether the government had a rational basis for the disparate treatment. I concluded that it plainly did. Id. at 138, 748 N.E.2d 1111. That rational basis was to prevent collusive settlements; for “[wjithout the restriction regarding settlement awards in R.C. 4123.931(D), employees could accept a lower settlement amount from the tortfeasor, in exchange for an agreement stating that the entire amount was not subject to subrogation.” Id. at 138, 748 N.E.2d 1111. Notwithstanding my dissent in Holeton, however, I recognize its holding as controlling precedent.
B
{¶ 26} The statute at issue in the instant case, former R.C. 4123.93, differs significantly from the one invalidated in Holeton. Enacted in 1993, former R.C. 4123.93(D) provides that “[t]he right of subrogation which inures to the benefit of the administrator, employer, or self-insuring employer under division (B) of this section is automatic and applies only if the employee is a party to an action involving the third-party tortfeasor.” (Emphasis added.) 145 Ohio Laws, Part II, 3188-3189. This provision thus required claimants to disgorge that portion of *199their recovery that represented payments made by his or her employer for workers’ compensation benefits.
{¶ 27} Significantly, however, the subrogation contemplated in former R.C. 4123.93 occurs only if the employee filed a lawsuit (an “action”). If the employee settled prior to filing a lawsuit, the employee could retain the full settlement amount; but if the employee filed a complaint and then settled the following day, the employee would be required to “share” that recovery with the employer that paid his or her workers’ compensation benefits.
{¶ 28} In view of this disparate treatment, the dispositive issue in this case is simply whether the government has a rational basis for distinguishing between claimants who settle their claims against third-party tortfeasors before initiating a lawsuit and claimants who settle after initiating a lawsuit. No rational basis for this distinction has been offered to us by the parties or by the dissent. I therefore conclude that the statute is unconstitutional because the filing of a legal action against a third-party tortfeasor bears no rational relationship to whether a portion of the claimant’s recovery should be paid to the claimant’s employer.
II
{¶ 29} The foregoing analysis makes clear that Holeton has little impact on our decision today. The reasoning set forth in the dissenting opinions in Holeton cannot serve as a basis to uphold the legislation in the instant case. That is to say, the rational basis that I believe supported the disparate treatment in Holeton — the prevention of collusive settlements — does not exist to support the statute at issue in the instant case because the unequal treatment of claimants authorized by former R.C. 4123.93(D) does not prevent collusive settlements. Indeed, it would be incongruous to uphold a statute that favors settlement before trial (former R.C. 4123.93[D]) based upon the reasoning in a case that addressed a statute that disfavored settlement before trial (R.C. 4123.931[D]). Given that the rational basis that I identified in Holeton cannot serve as the rational basis in the instant case, the government must have a different rational basis for the disparate treatment authorized by former R.C. 4123.93(D).
{¶ 30} Finally, I am aware that one could concur in the majority opinion by applying stare decisis — a principle that I have applied in many instances. I believe that we are not directly bound by Holeton, however, because that decision addressed a different statute than the one before us today. This point is perhaps best illustrated by observing that, if the state had a rational basis for the disparate treatment authorized by former R.C. 4123.93(D) (a distinct possibility given that its successor statute favored a different class of employees), then stare decisis would not preclude the court from upholding the legislation.
*200{¶ 31} Nevertheless, I believe that the disparate treatment authorized by former R.C. 4123.93 is less justified than that which was authorized by the statute in Holeton. Indeed, we have been offered no rational basis for why the filing of an “action” should trigger the employer’s statutory right of subrogation. Thus, because a majority of this court held that the statute in Holeton did not have a rational basis and because the statute before us today has less justification than the statute in Holeton, I believe that the majority decision is consistent with our precedent.
{¶ 32} For the foregoing reasons, I concur with the majority in judgment only.
O’Connor, J., concurs in the foregoing opinion.