Rossborough Manufacturing Co. v. Trimble

301 F.3d 482
Court of Appeals for the Sixth Circuit·Decided August 26, 2002·No. Nos. 96-3149 to 96-3156 and 96-3259·Published·Cited by 6 cases

Opinion

OPINION

BATCHELDER, Circuit Judge.

The plaintiffs appeal the district court’s order dismissing for failure to state a claim and for lack of jurisdiction their complaint demanding reimbursement from the now-defunct Intentional Tort Fund, created by the Intentional Tort Act, Section 4121.80 of the Ohio Revised Code, which was declared unconstitutional and void ab initio by the Ohio Supreme Court in Brady v. Safety-Kleen Corp., 61 Ohio St.3d 624, 576 N.E.2d 722 (1991). The plaintiffs contend that the actions of the State defendants in denying those claims constituted a viola[485] tion of the contracts clause, an unconstitutional taking without just compensation and a deprivation of plaintiffs’ due process rights, and gave rise as well to a cause of action under 42 U.S.C. § 1983. The Treasurer of the State of Ohio and the Ohio Workers’ Compensation Administrator assert Eleventh Amendment immunity. As we shall explain, we do not find that the state defendants are entitled to Eleventh Amendment immunity, but we conclude that the plaintiffs can demonstrate no deprivation of any of their constitutional rights, and they can state no claim cognizable under § 1983. We will therefore affirm the judgment of the district court.

BACKGROUND

A. History of Suits for Work-Related Injury in Ohio

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).

[486] 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 *2 (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.

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Rossborough Manufacturing Co. v. Trimble, 301 F.3d 482 (6th Cir. 2002).

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