CLEVELAND -- A settlement has been reached in a class-action lawsuit charging that Ohio's state insurance fund for injured workers overcharged employers hundreds of millions of dollars over several years.
In a settlement, the state of Ohio will pay $420 million to settle a class action lawsuit filed against the Ohio Bureau of Workers' Compensation.
According to the agreement, the BWC will create a fund to distribute payments to organizations that were overcharged by the state agency between 2001 and 2008.
The settlement will affect approximately 270,000 Ohio businesses, churches and charities.
The class action lawsuit was originally filed in Cleveland in December, 2007 by Earl Stein, the owner of Corky & Lenny's in Woodmere.
The lawsuit became known as the Corky & Lenny's case, because the owners were instrumental in the initial court filing in 2007. Corky & Lenny's said it was overcharged a total of $37,000.
That lawsuit alleged the BWC charged individual employers higher premiums to offset lower prices given to group employers.
Here's a timeline of events, starting with Stein's filing:
- Dec.18, 2007: Case filed in Cuyahoga County Court of Common Pleas captioned San Allen Inc., et al. v. Ryan, Adm.
- In 2009, with an order from McMonagle, the Bureau of Workers' Compensation halted its deep discount program that ran from 2001-2008.
- March 20, 2013: Decision handed down by Judge Richard McMonagle awarding plaintiffs $859,440,258.79
- April 15, 2013: BWC filed appeal in the 8th District Court of Appeals
- July 19, 2013: BWC filed its brief in the 8th District Court of Appeals, and the Ohio Chamber of Commerce, NFIB and the AFL/CIO filed a joint amicus brief supporting BWC's appeal
- May 15, 2014: The 8th District Court of Appeals upheld most of the initial trial court decision but remanded the case to the trial court to reduce its prior award to account for benefits received by class members who were also in group rating. The March 2013 judgment is subsequently reduced to $650,978,738.82
- June 27, 2014: BWC filed its Notice of Appeal to the Supreme Court of Ohio and asked it to take jurisdiction of the case
- July 23, 2014: Agreement in principle to settle lawsuit
Ohio BWC Administrator Steve Buehrer issued the following statement about the settlement:
"Ohio has made major changes to its workers' compensation system over the past several years. The policies that were at issue in this litigation in 2007 are not the same ones in place today, and we're pleased that we have reached a settlement so we can move forward. Improvements have been made to how premiums and discounts are calculated, as well as to billing practices, and premiums are continuing to go down as a result. Sound management of the trust fund made it possible to return $1 billion in rebates to customers last year, and major investments in workplace safety are helping employers do a better job of preventing injuries by keeping their workers safe. All of these improvements are paying off for workers and businesses, and we're going to keep building on them."
Any organization owed money in the settlement must file a claim with Cuyahoga County Common Pleas Court by September 22, 2014.
