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Each Party Seeking to Modify or Reverse an Administrative Agency Ruling Must File Separate Appeal With Reviewing Court

One Party’s Appeal Does Not Confer Jurisdiction to Review Other Parties’ Claims of Error

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2011-0337.  AT&T Communications of Ohio, Inc. v. Lynch, Slip Opinion No. 2012-Ohio-1975.
Cuyahoga App. No. 94320, 2011-Ohio-302.  Judgment affirmed.
O'Connor, C.J., and Pfeifer, Lundberg Stratton, O'Donnell, Lanzinger, Cupp, and McGee Brown, JJ., concur.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2012/2012-Ohio-1975.pdf

Video clip View oral argument video of this case.

(May 8, 2012) The Supreme Court of Ohio held today that when multiple parties seek to reverse or modify a decision of an administrative agency through an appeal in common pleas court, each party must perfect a separate appeal setting forth its own assignments of error in order to vest the court with jurisdiction to consider those issues.

In a 7-0 decision authored by Justice Evelyn Lundberg Stratton, the court rejected arguments by the Cleveland city income-tax administrator that any party’s filing of an administrative appeal in common pleas court confers jurisdiction on the court to review the entire case, including assignments of error raised by parties other than the appellant, without filing their own appeals or cross-appeals.

The case arose from an application filed by AT&T Communications of Ohio Inc. with the city of Cleveland seeking an income tax refund for 1999 through 2002.  Nassim Lynch, the city’s income-tax administrator, dismissed AT&T’s application for the refund for 1999, finding that the statute of limitations on the request for the refund had expired.  The administrator further determined that any refund that AT&T was claiming for tax years 2000 through 2002 was offset in part by its other tax obligations.  Thus, the administrator denied AT&T’s appeal in all respects.

AT&T appealed to the Cleveland Board of Income Tax Review. The board affirmed the denial of a refund for 1999, agreeing that the statute of limitations had expired.  However, the board determined that the administrator had erred in denying part of the company’s refund for the tax years 2000 through 2002, and decided that AT&T should receive the entire refund requested for those years.

AT&T appealed the board’s decision to the Cuyahoga County Court of Common Pleas, asserting that the board had erred in concluding that the statute of limitations barred AT&T’s refund claim for 1999.  The administrator did not file a notice of appeal. He did, however, file a brief asserting two assignments of error regarding the board’s decision to order a refund for 2000, 2001, and 2002. 

AT&T filed a motion to strike the administrator’s assignments of error, arguing that because the administrator did not file a separate notice of appeal or cross-appeal, the court of common pleas lacked jurisdiction to consider his arguments. Asserting jurisdiction over AT&T’s one assignment of error and the administrator’s two assignments of error, the court of common pleas court upheld the administrator’s position on all three assignments.

In an appeal to the Eighth District Court of Appeals, AT&T asserted among other assignments of error that the court of common pleas lacked jurisdiction to consider the administrator’s assignments of error because the administrator had not filed a notice of appeal. The court of appeals agreed and reversed the common pleas court’s judgment in favor of the administrator regarding AT&T’s refund for 2000 through 2002. The administrator sought and was granted Supreme Court review of the Eighth District’s holding that the common pleas court lacked jurisdiction to consider his assignments of error.

Writing for a unanimous Supreme Court in today’s decision, Justice Stratton acknowledged that there are differences between common pleas court proceedings to review administrative agency decisions under R.C. 2506.01 and court of appeals proceedings to review the decisions of lower courts. She noted, however, that despite those differences an administrative appeal hearing has more in common with an appellate hearing than with a new trial.

“We recognize that under R.C. 2506.03, authorizing the courts of common pleas to hold the hearing on appeal ‘as in the trial of a civil action,’ the court may admit and consider new evidence, and the court must weigh evidence on the whole record,” wrote Justice Stratton. “However, ... (t)here are limits to a court of common pleas review of the administrative body’s decision.  For example, in weighing evidence, the court may not ‘blatantly substitute its judgment for that of the agency, especially in areas of administrative expertise.’ ... Further, new evidence is admitted in a Chapter 2506 appeal only under certain circumstances.  ... Typically ... a court of common pleas, in reviewing an administrative decision, is limited to the ‘transcript as filed,’ according to R.C. 2506.03, with limited exceptions involving the integrity of the evidence in the underlying proceeding.”

“In reviewing the administrative body’s decision, a court of common pleas is authorized to determine whether the agency’s decision is ‘unconstitutional, illegal, arbitrary, capricious, unreasonable, or unsupported by the preponderance of substantial, reliable, and probative evidence.’ ... The court will then ‘affirm, reverse, vacate, or modify the order ... or remand’ the underlying administrative decision under that standard of review specified in the statute. R.C. 2506.04. These standards that a court of common pleas must employ and the dispositions that it must reach are more limited than relief that could be awarded pursuant to a trial, and therefore, the administrative appeal is more akin to an appeal than a trial.”

“Therefore, although an R.C. Chapter 2506 appeal proceeds differently from an appeal of a trial court judgment, a court of common pleas nevertheless ‘performs an appellate function.’  ...  Accordingly, we find no merit in the administrator’s argument that the distinctions in an R.C. 2506.01 appeal, as compared to the appeal of the judgment of a court, indicate that a single notice of appeal under R.C. 2506.01 authorizes a court of common pleas to consider an appeal by a party that has not filed a separate notice of appeal.”

In support of that finding, Justice Stratton cited the Supreme Court’s holding in Maritime Mfrs. Inc. v. Hi-Skipper Marina (1982) that the purpose of requiring a litigant to file a notice of appeal is to  ‘apprise the opposite party or parties of the taking of an appeal.’ While Maritime Mfrs. applied the rules of appellate procedure and addressed the appeal of a trial court’s judgment to a court of appeals, Justice Stratton noted that the court similarly held in Welsh Dev. Co., Inc. v. Warren Cty. Regional Planning Comm. (2011) that the filing of a notice of appeal in an R.C. 2506.01 administrative appeal serves the purpose of informing the opposing party of the taking of an appeal.  

She wrote: “An appeal of an administrative decision to a court of common pleas alerts the opposing party that an appeal of the underlying decision is being taken. Requiring an appellee who seeks to change or reverse a portion of the decision to file a separate appeal also serves that purpose.    Accordingly, we hold that in an administrative appeal to a court of common pleas pursuant to R.C. 2506.01, each party seeking to reverse or modify the underlying administrative decision must perfect a separate appeal in order to vest the common pleas court with jurisdiction to review each party’s respective assignments of error.”            

“In the instant case, AT&T perfected an appeal of the administrative decision in the court of common pleas, setting forth a single assignment of error that pertained to the 1999 refund request. The administrator did not perfect an appeal in the court of common pleas, but in his appeal brief, he asserted two assignments of error that sought reversal of the board’s decision regarding the taxpayer’s refund request for 2000 through 2002.  Because the administrator failed to perfect a separate appeal, the common pleas court lacked jurisdiction to consider the administrator’s assignments of error.  Accordingly, we affirm the judgment of the court of appeals.”

Linda L. Bickerstaff, 216.664.4406, for the City of Cleveland and Tax Commissioner Nassim M. Lynch.

Richard C. Farrin, 614.458.0035, for AT&T Communications of Ohio Inc.