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Wednesday, May 14, 2014

In the Matter of the Application of the East Ohio Gas Company for Approval of Tariffs to Adjust its Automated Meter Reading Cost Recovery Charge, Case no. 2012-2117
Public Utilities Commission of Ohio

Curtis D. Schleiger v. State of Ohio, Case nos. 2013-0743 and 2013-1046
Twelfth District Court of Appeals (Preble County)

Pro-Pak Industries, Inc., et al. v. Phillip E. Pixley, Case no. 2013-0797
Sixth District Court of Appeals (Lucas County

The Lincoln Electric Company v. Travelers Casualty and Surety Company, et al., Case no. 2013-1088
U.S. District Court for the Northern District of Ohio


Was PUCO Order Cutting Charges to Gas Company’s Customers Reasonable?

In the Matter of the Application of the East Ohio Gas Company for Approval of Tariffs to Adjust its Automated Meter Reading Cost Recovery Charge, Case no. 2012-2117
Public Utilities Commission of Ohio

ISSUES:

BACKGROUND:
The East Ohio Gas Company, doing business as Dominion East Ohio, planned to install automatic meter readers (AMRs) to its existing gas meters, so they could be read remotely and to help bring Dominion into compliance with the PUCO’s minimum gas service standard rules. In December 2006, Dominion filed an application with the PUCO seeking approval of a charge to customers to recover the costs of installing the AMRs during a five-year period. Without the charge, Dominion contends it would have taken 15 to 20 years to fully implement the program.

The automatic meter readers substantially reduce Dominion’s meter-reading costs because meter readers no longer have to walk from meter to meter to gain accurate readings or repeatedly visit customers because they are not home. Any savings were to be reflected by a reduction in its AMR charge to customers. Dominion began installing the readers in 2007. Each year, the PUCO monitored and reviewed the program, adjusting the AMR charge based on installation costs and savings.

In May 2010, the PUCO issued an order that Dominion must demonstrate in its 2011 filing how it would complete installation of all AMRs to its customers by the “end of 2011.” In 2012, the PUCO adopted a recommendation from its staff to reduce the AMR charge to customers by $1.6 million. The staff found that Dominion had slowed its rate of installations and, if it had kept its prior pace and fully deployed the AMRs in all its communities in 2011, the company’s customers would have saved $1.6 million. Dominion disagreed and appealed the 2012 order to the Ohio Supreme Court.

Attorneys for Dominion argue that the PUCO had no evidence to support its reduction of the AMR charge. They assert that the commission penalized Dominion for not having all the AMRs installed by early August 2011 and full operational savings in place by October 2011, when the PUCO had earlier issued a deadline of the end of 2011. Heading into 2012, Dominion’s attorneys point out that the company had cut its 2007 staff levels from 108 meter readers and 8 salaried supervisors to 27 readers and 2 supervisors, so the company was set to see the savings from those reductions. They contend that the PUCO was unreasonable when it revised the target date for implementation.

Attorneys for the PUCO counter that Dominion delayed finalizing its switchover to the AMRs to “the very last second” because that would prevent the customer savings from being part of the 2011 reduction in charges. To implement the savings, Dominion had to do more than finish installing all the AMRs, the PUCO attorneys argue, which they add the company did not do anyway. They maintain that the company also had to reroute the meter readings to then realize a reduction in its expenses. As a result, Dominion did not complete its AMR deployment program by the end of 2011, the PUCO attorneys assert. They conclude that Dominion’s customers were then forced to pay a higher AMR charge for another year, so it was reasonable for the PUCO to order the $1.6 million refund to customers.

Dominion’s attorneys assert that the PUCO in this case changed its earlier orders – a change that was a retroactive action, which is unlawful and unreasonable. They contend that the PUCO added mandates, such as the target date for full installation of the AMRs, after the orders were issued. By doing this, the PUCO imposed a new standard on Dominion’s past conduct, which made it impossible for Dominion to comply, Dominion’s attorneys argue. They maintain that Dominion met the PUCO’s 2010 order, which stated that “by the end of 2011, it will be possible to reroute nearly all of [Dominion]’s communities.”

They also contend that by revising its 2009 order, the PUCO violated the legal doctrine of collateral estoppel, which bars parties from litigating issues that have already been resolved. The 2009 order stated that it must be “possible” for Dominion to fully reroute its workers with the new AMR system, while the 2010 PUCO order stated that the company must “achieve” rerouting in nearly all its communities, Dominion’s attorneys maintain.

The commission’s attorneys counter that the PUCO did not retroactively change the deadline in the 2009 order, the PUCO only enforced it. They also note that the commission is legally allowed to review, monitor, and possibly change Dominion’s program, if needed.

Dominion’s attorneys claim that Ohio courts are required to grant stays, or suspensions, of disputed orders until an appeal can be heard. The attorneys argue that law applies to the PUCO, which should have suspended the $1.6 million reduction pending appeal. They add that if the company lost on appeal, it would then refund its customers for the overcharges, causing no financial harm.

The PUCO attorneys argue that Ohio law requires all commission orders to become effective “immediately.” The denial of Dominion’s request for a stay of the 2012 order was not an unreasonable, arbitrary, or unconscionable act, they conclude.

An amicus curiae brief supporting the Public Utilities Commission of Ohio’s position has been submitted by the Ohio Consumers Counsel.

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing the East Ohio Gas Company/Dominion East Ohio: Mark Whitt, 614.224.3911

Representing the Public Utilities Commission of Ohio: Devin Parram, 614.466.4397

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Are Criminal Defendants Entitled to Attorney at Resentencing Hearing?

Curtis D. Schleiger v. State of Ohio, Case nos. 2013-0743 and 2013-1046
Twelfth District Court of Appeals (Preble County)

Note: The Supreme Court determined that a conflict exists between two appellate districts on this issue and ordered that the certified-conflict case (2013-1046) be consolidated with an appeal from Curtis Schleiger (2013-0743) for oral arguments.

ISSUE: Does a criminal defendant have the right to an attorney at a trial court’s resentencing hearing to impose postrelease control mandated by statute?

BACKGROUND:
Curtis D. Schleiger was found guilty in August 2009 of felonious assault and carrying a concealed weapon. The trial court sentenced him to nine years, six months total for the two convictions.

Schleiger appealed to the Twelfth District Court of Appeals. His attorney filed a brief stating that he could find no substantive issue to appeal and asked to be released as Schleiger’s attorney. Schleiger decided to represent himself and filed his own brief.

In 2010, the appeals court ruled that the trial court improperly sentenced Schleiger to a maximum term of five years of postrelease control rather than the correct three-year mandatory timeframe. The Twelfth District also determined that the trial court did not explain, as required, the consequences of violating postrelease control.

At the limited resentencing hearing in October 2011, the trial court asked Schleiger if he wanted the court to appoint an attorney for him or preferred to represent himself. Schleiger chose to represent himself, though the court had an available attorney stay in case he had questions. Schleiger then appealed the resentencing back to the Twelfth District.

On appeal, the court affirmed the trial court’s decision. The appellate court noted that four other Ohio appeals courts have held that trial courts are not required to appoint attorneys for a resentencing hearing being conducted to correct postrelease control. The Twelfth District agreed, determining that Schleiger’s right to counsel was not deprived because the hearing was limited to fixing the postrelease control sentence based on state law. The hearing was “purely ministerial,” and Schleiger did not face a “substantial risk of prejudice,” the appellate court concluded.

Schleiger appealed to the Ohio Supreme Court, which agreed to hear the case. The Twelfth District also notified the Supreme Court that its decision conflicts with the judgment of the Third District Court of Appeals in State v. Peace (2012). The Supreme Court agreed and consolidated the cases for oral arguments.

The public defender appointed to represent Schleiger asserts that a criminal defendant has the right to counsel at a felony resentencing hearing, regardless of how limited the scope of that hearing is. He argues that the right to counsel arises during all critical stages of criminal litigation, and resentencing is critical because it addresses the sentence the offender receives and raises procedural and substantive issues.

“At a resentencing hearing, the defendant has the same protections that exist at a sentencing hearing: the right to be heard; the right to present mitigating evidence; the right to have counsel explain the law and effects of the proceeding; and the right to present any objections,” the public defender wrote in his brief to the Supreme Court. “The criminal rules recognize that a defendant is not entitled to less protection because he has been convicted of a crime or because there are limits on the court’s discretion to impose a particular sentence.”

He concludes that postrelease control is not a simple process to navigate, and a defendant may not be able to understand the “imposition, appeal, and enforcement” without the help of an attorney.

The Preble County Prosecutor’s Office did not file a brief in this case, so it will not be permitted to participate in oral arguments before the court.

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket (2013-0743 and 2013-1046).

Contacts
Representing Curtis D. Schleiger: Stephen Hardwick, 614.466.5394

Preble County Prosecutor’s Office: Kathryn West, 937.456.8156

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When Are Employers Liable for Employee Injury Under Ohio’s Employer Intentional Tort Liability Statute?

Pro-Pak Industries, Inc., et al. v. Phillip E. Pixley, Case no. 2013-0797
Sixth District Court of Appeals (Lucas County

ISSUES:

BACKGROUND:
In June 2008, Phillip Pixley began working for Pro-Pak Industries as a maintenance worker at its manufacturing facility in Maumee, Ohio. Pro-Pak manufactures corrugated containers, boxes, and packaging materials, which are moved throughout the facility on a system of conveyor lines. When products need to be moved from one conveyor line to another, transfer cars that run perpendicular to the conveyor lines along two central aisles are used. Less than three inches separates the conveyer lines from the edge of the transfer cars, and the cars are equipped with collapsible safety bumpers meant to stop the movement of the car when compressed due to collision with an object. 

On July 2, 2008, Pixley was injured while trying to retrieve the model and serial number of a burnt-out motor on one of the conveyer lines. He was kneeling down to access the motor, and his right leg extended into the central aisle. Another employee was in the process of transferring product between two conveyer lines, and Pixley’s leg became trapped between the conveyor line and transfer car causing serious injury to his leg.

Video taken of the transfer car following the accident revealed that the bumper was dragging along the ground, and an expert witness for Pixley claimed that the only way the dragging bumper would not have activated the safety mechanism is if someone intentionally bypassed the system. However, an employee of Pro-Pak said in a deposition that the bumpers were inspected monthly, and they would occasionally drag on the floor, but this never interfered with the safety mechanism.

Pixley filed a claim in the Lucas County Court of Common Pleas. Because the transfer car failed to stop when it hit him, Pixley asserted that Pro-Pak should be held responsible for his injuries under R.C. 2745.01, which holds employers liable for intentional acts resulting in the injury of an employee. The trial court granted summary judgment in favor of Pro-Pak, finding that the bumper was not an “equipment safety guard.”

Pixley appealed to the Sixth District Court of Appeals. It reversed and cited the Ohio Supreme Court’s decision in Hewitt v. L.E. Myers Co. (2012), which defined “equipment safety guard” as “a device designed to shield the operator from exposure to or injury by a dangerous aspect of the equipment.”  The Sixth District held that the Hewitt definition was not limited to protecting operators of the equipment. Instead, equipment safety guards include devices that shield all employees from exposure to or injury from a dangerous part of the equipment.

Pro-Pak appealed to the Ohio Supreme Court, which agreed to hear the case.

Attorneys for Pro-Pak argue that the Sixth District misapplied Hewitt when it expanded the definition of “equipment safety guard” to include safety barriers that protect all employees from dangerous equipment parts. They maintain that the Hewitt decision was meant to limit the definition of equipment safety guard to only include those devices that protect the operator of the equipment.

Pro-Pak’s attorneys assert that a limited definition aligns with the General Assembly’s clear intent to restrict employer liability for intentional torts. The General Assembly wanted to restrict workplace intentional tort claims to instances when employers specifically intended to injure the employee, but the employer could not intend to injure an employee other than the operator by removing a safety guard, they claim. 

They argue that even if the expanded definition of “equipment safety guard” is accepted, R.C. 2745.01(C) and Hewitt also limit employer intentional tort liability to cases where the employer deliberately removed the equipment safety guard. In Hewitt, the court stated that deliberate removal occurs when “an employer makes a deliberate decision to lift, push aside, take off, or otherwise eliminate [the] guard from the machine,” and the company’s attorneys maintain that Pixley presented no formal evidence to show that Pro-Pak made a deliberate decision to bypass the safety bumper. Without evidence, the trial court’s decision in favor of Pro-Pak was appropriate, they conclude.

In their brief to the Supreme Court, attorneys for Pixley state that because “equipment safety guard” is not defined in R.C. 2745.01, the term’s plain and ordinary meaning is based on the particular facts of the case. The language of R.C. 2745.01(C) makes no distinction between operators and regular employees, and the Hewitt definition was not all-encompassing because the “worker’s job title was irrelevant to the Court’s holding,” they maintain. Examining other workplace safety regulations, Pixley’s attorneys argue that the Sixth District’s expanded definition is consistent with broader definition of “barrier guards” found in these policies.

Pixley’s attorneys agree that the legislature meant to restrict employer intentional tort liability, but argue that there is no reason to believe the legislature meant to exclude all employees other than operators from protection under R.C. 2745.01. This restriction also does not take into account the fact that safety guards are often found on equipment that does not require an operator, they contend. 

Attorneys for Pixley also argue that proof of a formal management decision to deliberately bypass the safety system in not required under Ohio law. Circumstantial proof of deliberate removal is sufficient for the judge or jury to draw reasonable inferences, they contend. Additionally, they assert that under the principle of respondeat superior, Pixley only needs to show that the safety bumper was deliberately removed by someone employed by Pro-Pak. Deliberate removal of an equipment safety guard is not limited to instances where the employee can prove that a formal decision was made by the employers to remove the safety mechanism, they conclude.

An amicus curiae brief supporting Pro-Pak’s position has been submitted collectively by the Ohio Chamber of Commerce, Ohio Chapter of the National Federation of Independent Business, and Ohio Self-Insurers Association. The Ohio Association of Civil Trial Attorneys has also filed an amicus brief supporting Pro-Pak.

The Ohio Association of Claimant’s Counsel and Ohio Association for Justice have filed a joint amicus brief supporting Pixley.

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing Pro-Pak Industries and Toledo L & L Realty Company: Timothy James, 419.241.3213

Representing Phillip E. Pixley: Paul Flowers, 216.344.9393

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What Method of Adding Together Losses from Insurance Claims is Correct for Determining Whether Umbrella Insurance Coverage is Activated?

The Lincoln Electric Company v. Travelers Casualty and Surety Company, et al., Case no. 2013-1088
U.S. District Court for the Northern District of Ohio

ISSUE: May an insured that has incurred losses and defense costs, and that has settled claims with multiple primary insurance policies by spreading the claims equally among the policies (pro rata basis), then add together its unreimbursed losses to reach an amount that triggers coverage by one or more excess (umbrella) insurance policies?

BACKGROUND:
Over more than a decade, thousands of people have sued Ohio-based Lincoln Electric Company for long-term injuries allegedly caused by exposure to harmful substances in the company’s welding products. The substances reportedly include asbestos, manganese, and welding fumes.

Lincoln Electric claims that $4.5 million of more than $12 million in indemnity costs during a 12-year period has not been reimbursed by its insurers. (Indemnity costs are payments of settlements and adverse judgments.) The company also contends that during roughly the same timeframe, it has had $179 million in legal defense costs of which its insurers have not reimbursed nearly $87 million.

This case concerns two time periods: 1980 to 1981, when Lincoln Electric had primary insurance coverage through St. Paul Fire and Marine Insurance and carried an umbrella policy with Aetna Casualty and Surety Company (now known as Travelers); and 1983 to 1984, when Lincoln Electric’s primary and umbrella policies were both with St. Paul.

In a 2000 settlement agreement between Lincoln Electric and St. Paul, the insurer equally spread its indemnity payments across all the primary policies, and it agreed to pay only part of Lincoln’s indemnity and defense costs.

Lincoln Electric filed a lawsuit in federal court, arguing that it has the right to recover part of its unreimbursed costs from its umbrella policy. The U.S. District Court for the Northern District of Ohio has notified the Ohio Supreme Court of the case and asks it for a decision. In the “order of certification” filed with the Supreme Court, the federal court states that the issue in this case is a question of Ohio law that may affect the case outcome and added that there is no controlling precedent on the issue from the Ohio Supreme Court. The federal court notes that there are conflicts among Ohio courts on this issue, and between Ohio courts and the U.S. Sixth Circuit Court of Appeals.

In May 2012, the federal district court issued an order to protect the confidentiality of various materials in the case – effective throughout the legal proceedings and after the litigation ends.

On November 19, 2013, Lincoln Electric asked the Ohio Supreme Court to place its merit brief in this case under seal. The Supreme Court responded that the parties may file any brief confidentially in order to comply with the federal court order. Lincoln Electric, St. Paul, and Travelers all have filed their briefs under seal.

According to the federal court’s certification filing, Lincoln Electric argues that if it adds up its unreimbursed losses, that amount exhausts the policy limit of the primary policy and reaches the $2 million amount that kicks in its umbrella policy. This method of calculation is referred to as a “vertical, all sums basis.”

In its settlement, Lincoln Electric agreed to spread out its losses equally among its primary policies with St. Paul. This is called allocation on a “horizontal, pro rata basis.” The umbrella insurance companies assert that because Lincoln Electric agreed to distribute its losses, the company forfeited its right to use an “all sums” approach to trigger its umbrella policy.

The federal court’s filing states that the Sixth Circuit in GenCorp Inc. v. AIU Ins. Co. (2005), an unpublished decision, held that when an insured agrees to a pro rata distribution among its primary insurance policies it forfeits its right to use the “all sums” aggregation method to reach its umbrella coverage. However, in Goodrich Corp. v. Commercial Union Ins. Co. (2008), the Ninth District Court of Appeals determined in a case similar to this one that an “all sums” approach is allowed.

Amicus curiae briefs supporting the position of Lincoln Electric Company have been submitted by:

The following have filed amicus briefs supporting St. Paul Fire and Marine Insurance and Travelers Casualty and Surety Company:

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing the Lincoln Electric Company: Chad Readler, 614.281.3891

Representing St. Paul Fire and Marine Insurance and Travelers Casualty and Surety Company: Michael Smith, 216.515.1660

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These informal previews are prepared by the Supreme Court's Office of Public Information to provide the news media and other interested persons with a brief overview of the legal issues and arguments advanced by the parties in upcoming cases scheduled for oral argument. The previews are not part of the case record, and are not considered by the Court during its deliberations.

Parties interested in receiving additional information are encouraged to review the case file available in the Supreme Court Clerk's Office (614.387.9530), or to contact counsel of record.