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Wednesday, May 8, 2013

State ex rel. Troy A. Scott v. Industrial Commission of Ohio and Country Saw & Knife, Inc., Case no. 2011-1922
Tenth District Court of Appeals

Esber Beverage Company v. Labatt USA Operating Company, LLC, et al., Case no. 2012-0941
Fifth District Court of Appeals (Stark County)

Kristi Longbottom, Ind. and as Natural Guardians of Kyle Jacob Smith v. Gary S. Huber, D.O., et al., Case no. 2012-1260
Twelfth District Court of Appeals (Clermont County)

Lorain County Bar Association v. King Ayettey Zubaidah, individually, and STAND, Inc., Case no. 2013-0072
Board on the Unauthorized Practice of Law

Did The Industrial Commission Abuse Its Discretion By Relying On OSHA Test to Deny Award for Workplace Safety Violation?

State ex rel. Troy A. Scott v. Industrial Commission of Ohio and Country Saw & Knife, Inc., Case no. 2011-1922
Tenth District Court of Appeals

ISSUE: Did the Industrial Commission of Ohio abuse its discretion by relying on a single air quality test performed several months after an injured worker’s employment at the tested facility had been terminated, and not on testimony by the injured worker and others describing hazardous workplace air conditions, in denying the injured worker’s claim that his employer caused his injury by violating a specific safety regulation?

BACKGROUND: Troy Scott worked in a saw blade manufacturing plant owned by Country Saw and Knife Inc. for approximately 2½ years. During that time, Scott developed a severe respiratory condition that medical tests showed was caused by an accumulation of toxic cobalt and tungsten dust in his lungs. Scott left his job at the plant in 2007 at the age of 23, and was granted state workers’ compensation benefits for a permanent lifetime disability.

Scott filed a supplemental claim with the Ohio Industrial Commission seeking an additional award from Country Saw and Knife based on the company’s alleged violation of specific safety regulations (VSSR) by failing to install dust-catching hoods and air venting equipment on grinders and sanding machines used in the area of the plant where Scott had worked, and by not providing Scott and other workers with adequate personal respiratory safety equipment.

The company opposed the VSSR award, and the case proceeded to a hearing before an Industrial Commission staff hearing officer. During the hearing, Country Saw presented the results of a one-day test of workplace air quality that had been performed at its plant by the Occupational Health and Safety Administration (OSHA) in April 2008. The test results showed that the air in the plant on that day contained less-than-hazardous amounts of cobalt and tungsten. Scott presented testimony by several persons who had worked at the plant during the time he was employed there who described being surrounded by a  “haze” of metal dust generated by the sanders and grinders that routinely got into workers’ hair, noses and ears and clogged the paper masks they were provided by the company to prevent inhalation. 

The hearing officer denied Scott’s claim for VSSR, citing the OSHA test results as the only scientific  evidence regarding the levels of airborne metal dust at the plant, and finding that because those results showed that airborne dust did not rise to the level of a “contaminant” under state workplace safety laws, Country Saw had no duty to hood and vent its grinding and sanding machines or to implement respiratory safety measures that are required in facilities where airborne contaminants are present. Scott’s request for a rehearing was denied by the Industrial Commission.  He then filed a mandamus action asking the Tenth District Court of Appeals to find that the Industrial Commission abused its discretion by relying exclusively on the OSHA test results and not giving appropriate weight to the evidence presented by Scott. The Tenth District found that the commission’s ruling was supported by “some evidence,” and therefore its decision denying Scott’s VSSR claim must be upheld.

Scott has exercised his right to appeal the Tenth District’s denial of mandamus to the Supreme Court.

Attorneys for Scott point out that the 2007 OSHA test, which they say was invalid because it was performed six months after Scott stopped working at the plant and at a time when none of the dry grinding machines that caused the metal dust hazard was being operated, was the only test ever performed because Country Saw had never tested the air in its factory since it began making cobalt and tungsten saw blades in 1993, despite having been informed by its suppliers that the grinding and sanding of those metals could generate an air safety hazard.

They argue that, if affirmed, the rulings of the Industrial Commission and Tenth District in this case effectively give employers a “free pass” to ignore known or potential risks to their workers and avoid the costs of expensive workplace safety equipment by simply failing to do any testing that would establish the existence of a hazard that they would then need to remedy. They urge the court to remand Scott’s VSSR claim to the Industrial Commission for proper weighing of the evidence, including the wide disparity between conditions at the plant when Scott worked there and the conditions on the day the OSHA test was performed.

Attorneys for Country Saw & Knife and the Industrial Commission urge the court to affirm the rulings of the commission  and Tenth District, which they say correctly found that Scott had not met his burden of  showing that airborne cobalt and tungsten dust in the plant had ever reached or exceeded the levels that would constitutive a “contaminant” and thereby triggered a requirement that the company modify its machinery or provide workers with additional respiratory safety equipment. With regard to the OSHA test that was relied upon by the hearing officer, they point out that an OSHA investigator was present at the plant for the entire time the air quality monitoring was conducted, and argue that Scott has presented no evidence to suggest that the test was conducted in anything other than a competent, thorough manner or that accepted testing techniques and protocols were not followed.

Representing Troy Scott: Walter Kaufmann, 330.744.0291

Representing Country Saw & Knife Inc.: Timothy A. Barry, 330.337.8761

Representing the Industrial Commission of Ohio: Colleen C. Erdman, 614.466.6696

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Beer Distributor Challenges Manufacturer’s Termination of Contract Under State Alcoholic Beverage Franchise Act

Esber Beverage Company v. Labatt USA Operating Company, LLC, et al., Case no. 2012-0941
Fifth District Court of Appeals (Stark County)

ISSUE:  When a new owner acquires a company that manufactures alcoholic beverages, and in doing so assumes the previous owner’s franchise agreements with local wholesaler/distributors, does a provision added to Ohio’s Alcoholic Beverages Franchise Act in 1994 give the successor owner an independent statutory right to later terminate its franchise agreement with an Ohio distributor without “just cause,” notwithstanding the terms and conditions of the franchise agreement?

BACKGROUND: In March 2009, a company called Labatt USA acquired from the previous owner, InBev USA, the assets necessary to import and sell Labatt beer products in the United States.  As part of that transaction, Labatt USA expressly assumed InBev’s existing  distribution agreements for Labatt  products with various wholesale distributors throughout the U.S., including  its agreement with Canton-based Esber Beverage Company, which had been the exclusive distributor of Labatt products in a 10-county area of northeast Ohio for more than 50 years. 

The franchise agreement between InBev USA and Esber, which had been negotiated as part of the settlement of a lawsuit between those parties, specified that Esber would remain the sole distributor of Labatt products in its service area indefinitely, unless Esber consented to termination of the agreement or committed one of 10 enumerated breaches of its duties under the agreement that would constitute “good cause” for termination.

In May 2009, Labatt USA sent a letter to Esber stating that it intended to terminate Esber as a Labatt wholesaler.  Labatt did not allege that Esber had committed any of the breaches of its contractual  duties set forth in the distributorship agreement as good cause for termination, but instead stated that it was exercising its statutory right as a successor owner to terminate the previous owner’s distributorship agreements under R.C. 1333.85(D), a provision of Ohio’s Alcoholic Beverages Franchise Act (ABFA).

Esber filed suit against Labatt USA in the Stark County Court of Common Pleas, asserting claims for violations of the ABFA, breach of contract, and other claims.  The common pleas court ruled in favor of Esber, holding that, when read in context with the rest of the ABFA statute, the language of R.C. 1333.85(D) allowing a successor owner to terminate distributorships without just cause applied only to “at will” distributors who were not covered by a written franchise agreement with the new owner, and did not apply to distributors like Esber, with whom the new owner had entered into a binding contractual relationship by assuming the previous owner’s distributorship agreement.

Labatt appealed.  On review, the Fifth District Court of Appeals reversed the trial court’s decision and held that the plain language of R.C. 1333.85(D) grants  a successor owner an independent statutory right to continue, renew or terminate the franchise of any Ohio distributor without cause, so long as the new owner takes action within 90 days of assuming ownership and complies with the advance notice and “diminished value” compensation requirements set forth in that section of the law.

Esber sought and was granted Supreme Court review of the Fifth District’s decision.

Attorneys for Esber argue that the Fifth District violated the established rules of statutory interpretation by reading the first sentence of R.C. 1333.85(D) in isolation from the rest of the ABFA statute, which consists of Sections 1333.82 through 1333.87 of the Revised Code.  They contend that the court of appeals ruling in this case conflicts with the Supreme Court’s specific holding in Tri-County Distributing inc v. Canandaigua Wine Company (1993) that courts considering the legality of terminating a distributorship under the ABFA must begin by making a threshold determination whether there is a “franchise relationship” between the owner and distributor as that term is defined in R.C. 1333.83. 

While the court in Canandaigua found that the complaining  distributors were subject to termination without cause because they were not parties to a binding franchise agreement with the new owner, Esber asserts that it is clear in this case that Labatt USA entered into a binding contract with Esber when it assumed the rights and obligations of InBev’s distributorship agreements as part of its purchase of the company.  They urge the justices  to reverse the court of appeals and reinstate the trial court’s holding that the language of R.C. 1333.85(D) applies only to “at will” distributors who are not protected by the terms of a written franchise agreement, and does not invalidate Esber’s contractual right to be terminated only for good cause as specified in its distributorship agreement with Labatt.

Attorneys for Labatt USA urge the court to affirm the conclusion of the Fifth District that R.C. 1333.85(D) is clear and unambiguous, and therefore must be applied to the facts of this case without engaging in unnecessary analysis of other sections of the ABFA or examining  the legislative history of the statute. They argue that the language of the statute confers on the new owner of a beverage manufacturing company within 90 days after assuming ownership the right to renew, non-renew or terminate, without cause, any distributorship  established by the previous owner of the company, and makes no distinction  between “at will” distributors and distributors whose prior agreements with the former owner have been temporarily continued  by the successor owner during the transition period.

Representing Esber Beverage Company: Stephen C. Fitch, 614.221.2838

Representing Labatt USA Operating Co. LLC: James Niehaus, 216.515.1660

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May 2004 Changes to Pre-Judgment Interest Statute Be Applied To Lawsuit Based on Injuries Suffered Before 2004?

Kristi Longbottom, Ind. and as Natural Guardians of Kyle Jacob Smith v. Gary S. Huber, D.O., et al., Case no. 2012-1260
Twelfth District Court of Appeals (Clermont County)

ISSUE: Can 2004 amendments to the state law governing awards of pre-judgment interest in civil lawsuits be applied to an award of pre-judgment interest in a case that was decided after 2004, but was based on injuries suffered by the plaintiff before the law was amended?

BACKGROUND: In this case, a physician and his corporate medical practice challenge as excessive the amount of pre-judgment interest awarded against them in a medical malpractice lawsuit decided in 2010.

The malpractice suit arose from alleged negligent treatment and medical advice given by Dr. Gary Huber while treating nine-year-old Kyle Smith during a visit to the emergency room at Mercy Hospital in Clermont in March 2002.  After examining Kyle, who had fallen and struck his head on a coffee table while playing at home, Dr. Huber told Kyle’s parents, Kristi Longbottom and Jesse Smith, that his injury did not appear to be serious and that a CT scan was not necessary, and advised them to take him home and let him “sleep it off.”  Later that night the parents awoke to find that Kyle had vomited and was gasping for breath. He was life-flighted to Cincinnati Children’s Hospital, where a CT scan disclosed a massive hematoma (contusion and swelling of the brain). Kyle underwent emergency surgery and extensive rehabilitation during which he had to relearn how to eat, walk and communicate.  He was subsequently diagnosed with permanent brain injuries, and is unable to walk with a normal gait.

The Smith family filed suit against Dr. Huber and his medical practice, Qualified Emergency Specialists Inc. (QESI), in 2003, but exercised their right to dismiss that complaint without prejudice in March 2007. A new complaint, filed in March 2008, was tried to a jury and culminated in a $2.4 million verdict against Huber and QESI, reduced by a $500,000 “offset” for a settlement the Smiths had received from Mercy Hospitals. In response to interrogatories, the jury indicated that approximately two-thirds of the total amount awarded was intended to compensate Kyle and his parents for “future damages,” i.e. for pain, suffering, reduced quality of life and loss of consortium that they would experience during their lives after the date of the judgment.

The Smiths moved the court to make an additional award of pre-judgment interest (PJI) under R.C. 1343.03, a state law that authorizes such awards to successful plaintiffs in civil lawsuits when the trial court finds that a defendant did not make a good-faith attempt to settle the case prior to trial.

In reviewing the Smiths’ motion for PJI, the trial court noted that R.C. 1343.03 had been amended by the General Assembly effective June 2, 2004, and that the amendments included a prohibition against awarding PJI on any portion of a judgment intended to compensate a plaintiff for future damages, and a change in the date from which PJI should be calculated from the date the plaintiff’s claim accrued (in most cases, the date his injuries were suffered) to the date on which the plaintiff filed the lawsuit that resulted in his damage award. 

The trial judge found that the Smiths were entitled to PJI, and ruled that the amended 2004 version of the PJI statute could not be “retroactively” applied to the calculation of interest on the Smiths’ jury verdict because that version of the law was not in effect on the date of Kyle’s March 2002 treatment at the emergency room. Applying the pre-2004 version of the statute, the court calculated PJI based on the full amount of the jury verdict, including future damages, and awarded interest dating back to March 2002 except for the period between the March 2007 dismissal of their original complaint and the new filing in March 2008. Based on those determinations, the court awarded the Smiths PJI of $830,775.

Dr. Huber and QESI appealed the trial court’s judgment, damage award, and award of PJI. With regard to PJI, the defendants argued that the statutory amendments adopted in 2004 should have been applied to substantially reduce the amount of interest to which the Smiths were entitled.  The Twelfth District Court of Appeals affirmed the judgment and damage award in favor of the Smiths, and agreed with the trial court’s determination that the calculation of PJI should be based on the pre-2004 version of R.C. 1343.03(C).  The court of appeals subsequently certified, however, that its ruling with regard to which version of the PJI statute should be applied was in conflict with a 2008 decision of the 8th District Court of Appeals, Barnes v. University Hospital of Cleveland.  

The Supreme Court agreed to review only the issue of whether the amended 2004 version of the PJI statute can be applied to a claim that accrued prior to the June 2, 2004 effective date of that statute.

Attorneys for Dr. Huber and QESI argue that, contrary to the holdings of the trial court and the Twelfth District, calculating the Smiths’ PJI award in this case according to the amended 2004 version of R.C. 1343.03(C) to the Smiths’ motion for PJI cannot be a “retroactive” application of the law because the complaint on which the PJI award is based arose was not filed until March 8, 2008, nearly four years after the legislature amended the statute. They point to this court’s April 2013 holding in Estate of Johnson v. Smith that when a plaintiff has voluntarily dismissed a pending complaint “Ohio law treats the previously filed action as if it had never commenced,” and therefore a dismissed complaint that is refiled is considered to have been “brought” on the date of refiling, subject to whatever conditions or limitations on such claims are in place on that date.  Because the complaint that resulted in the Smiths’ damage award against Huber and QESI was not “brought” until long after the legislature amended the PJI statute, they assert, any award of PJI based on that complaint must be limited by the 2004 amendments.

The defendants also argue that, even if the court were to find that the Smiths’ malpractice complaint   
was “brought” prior to June 2004, an award of PJI is not predicated on the plaintiff’s underlying tort complaint, but only accrues after 1) a judgment has been entered against a defendant and 2) the trial court has made a post-judgment determination, independent from any finding of liability on the underlying tort claim, that the defendant failed to make a good-faith effort to settle the case.  Because the Smiths’ claim for PJI in this case did not accrue until the trial court entered a judgment in their favor in October 2010, they contend, their motion was subject to the PJI statute in force on the date of that judgment, which was the amended 2004 version of the law.

Attorneys for the Smiths argue that  the trial court and Twelfth District correctly held that all of the plaintiffs’ claims against the defendants, including their claim for PJI, “relate back” to the date in 2002 on which Kyle’s injuries occurred and their cause of action based on those injuries accrued.  They urge to court to affirm the court of appeals’ determination that applying the amended 2004 version of R.C. 1343.03(C) to limit their recovery of PJI would be an impermissible retroactive application of the law that deprived them of a vested right to be made whole for their damages according to the statutory provisions  that were in place at the time their claims arose.

Representing Kristi Longbottom, Jesse Smith and Kyle Smith: Jennifer L. Lawrence, 859.578.9130

Representing Dr. Gary Huber and Qualified Emergency Specialists, Inc.: Martin T. Galvin, 216.430.2237

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Unauthorized Practice Of Law

Lorain County Bar Association v. King Ayettey Zubaidah, individually, and STAND, Inc., Case no. 2013-0072
Board on the Unauthorized Practice of Law

The Board on The Unauthorized Practice of Law has recommended that the court make a finding that  King Ayettey Zubaidah and a corporation established by Zubaidah identified as STAND engaged in the unauthorized practice of law by becoming involved in the cases of four Lorain County criminal defendants.  The board further recommends that the court  impose a separate civil penalty of $5,000 for each of those four counts, issue an injunction barring Zubaidah and STAND from any future activities the constitute the unauthorized practice of law, and order Zubaidah and STAND to pay the costs incurred by the board and the bar association in prosecuting his illegal conduct.

In its report to the court, the board noted that in each of the four cited cases, Zubaidah, who has never been admitted to the practice of law and is the sole principal and employee of STAND, entered into written agreements with family members of persons facing prosecution for felony criminal offenses to provide “assistance” to the defendants in their dealings with the judicial system despite the fact that each of the defendants was already represented by a licensed attorney.  The board reported that in each case Zubaidah injected himself into the relationship between the defendant and his attorney and offered legal advice that was contrary to the recommendations of the attorney.

In two cases, Zubaidah wrote letters to the judges assigned to the defendants’ cases attempting to impact the judge’s perception of the defendant and advocating for a reduction in bond without the knowledge or consent of the defendant’s attorney.  In one case, the defendant rejected his attorney’s advice to accept a plea bargain that would have resulted in a four-year prison term, and followed Zubaidah’s recommendation that he take the case to a trial. The defendant was found guilty on multiple  felony  counts and sentenced to 23 ½ years in prison.

Zubaidah has filed objections to the board’s findings and recommendations. He asserts that he never held himself out as an attorney or a person with special knowledge of the law or court proceedings to any of the four individuals identified in the board’s report, but merely agreed to give those individuals and their family members his personal support and to exercise his constitutional right of free speech to express his opinions about the legal representation they were receiving and to write letters attesting to their character and advocating for their fair treatment by the local courts.  He asks the court to reject the board’s findings of unauthorized law practice and its recommended sanctions, and instead urges the justices to enjoin the Lorain County Bar Association and the unauthorized practice board from any further attempts to punish him for exercising his constitutional rights to petition the government and to engage in free speech.

In its response to Zubaidah’s objections, the Lorain County Bar Association points out that the written agreements he entered into with members of criminal defendants’ families indicated that Zubaidah would “assist” in the resolution of cases pending before local courts, and notes that he followed through on those agreements by advising his “clients” about how to proceed in that litigation and sending letters to attorneys and judges involved in the defendants’ cases that included interpretations of constitutional issues, citations to comparative case law and quotes from attorney and judicial ethics rules – all of which have been held in previous cases to constitute unlicensed law practice regardless of  how the practitioner referred to himself or what name he or others used to describe his conduct.

Representing the Lorain County Bar Association: D. Chris Cook, 440.246.2665

King Ayettey Zubaidah (f.k.a. Gerald McGee), pro se: No telephone contact information provided

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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.