F LC^ AUG CLERK OF COURT SUPREME COURT OF OHIO. Case No Court of Appeals Case No. 04AP-1293

Transcription

1 IN THE SUPREME COURT OF OHIO State ex rel. Cynthia Davis, et al., Relators-Appellees, Cross-Appellants V. Public Employees Retirement Board, et al., Case No On Appeal as of Right from the Court of Appeals, Franklin County, Ohio Tenth Appellate District Court of Appeals Case No. 04AP-1293 Respondents-Appellants, Cross-Appellees. FOURTH BRIEF OF RELATORS-APPELLANTS, CROSS-APPELLEES James E. Melle ( ) *Counsel of Record Donell R. Grubbs ( ) BUCKLEY KING LPA One Columbus, Suite West Broad Street Columbus, OH (614) (614) fax com g rubbs(ctbuckleykin g. oom Counsel for Realtors-Appellees, Cross-Appellants RON O'BRIEN Franklin County Prosecuting Attorney Nick A. Soulas, Jr. ( ) Assistant Prosecuting Attorney 373 South High Street, 13'" Floor Columbus, OH (614) nasoulasa,co.franklin. oh.us Counsel for RespondentsAppellants, Cross- Appellees Franklin County, et af F LC^ AUG CLERK OF COURT SUPREME COURT OF OHIO NANCY ROGERS Attorney General of Ohio Laura Erebia Parsons ( ) Assistant Attorney General *Counsel of Record 30 East Broad Street, 26 i Floor Columbus, OH (614) (614) fax loarsonsc^a.ap-state. oh. u s Counsel for RespondenFAppellant, Cross-Appellee Ohio Public Employees Retirement System Teri G. Rasmussen ( ) *Counsel of Record LANE ALTON & HORST, LLC Two Miranova Place, Suite 500 Columbus, OH (614) (614) fax trasmussen@lanealton.com Attorneys for RespondentsAppellants, Cross Appellees Franklin County, et al

2 TABLE OF CONTENTS 1. GENERAL REBUTTAL 1 II. REBUTTAL TO CROSS-APPELLEE PUBLIC EMPLOYEES RETIREMENT BOARD PROPOSITION OF LAW NO. 1: 6 An Agency Order Finding Privity Between Co-employees Which Is Based Solely Upon Mutuality Of Interest And Identity Of Desired Result Violates The Due Course Of Law Provision Under Article I, Section 16 Of The Ohio Constitution and The Due Process Of Law Clause Of The Fourteenth Amendment To The United States Constitution 6 III. REBUTTAL TO CROSS-APPELLEE PUBLIC EMPLOYEES RETIREMENT BOARD PROPOSITION OF LAW NO. 2: 12 The OPERS Service Credit Deternunation Hearing Violated bue Process 12 A. The Mathews v. Eldridge Balancing Test 12 IV. CONCLUSION 19 CERTIFICATE OF SERVICE 20 i

3 TABLE OF AUTHORITIES Cases Arbino v. Johnson & Johnson, 116 Ohio St.3d 468, 2007-Ohio Armstrong v. Manzo (1965), 380 U.S. 545, 85 S. Ct Brown v. City ofdayton (2000), 89 Ohio St.3d 245, 2000-Ohio California v. Green, 399 U.S. 149, 90 S.Ct (1970) City ofcalumbus v. Hall, 1984 WL ClevelandBd. ofedn. v. Loudermill (1985), 470 U.S. 532, 105 S.Ct Coventry Towers, Inc. v. Cuyahoga County Board ofrevision, 1986 WL Dorrian v. Scioto Conserv. Dist. (1971), 27 Ohio St.2d 102, 271 N.E. 2d Goodson v. McDonough Power Equip., Inc. (1983), 2 Ohio St.3d 193, 443 N.E. 2d Kiser v. Allstate Insurance Co (2007), 144 Ohio Misc. 2d 12, 2007-Ohio Logan v. Zimmerman Brush Co. (1981), 455 U.S. 422, 102 S. Ct Mathews v. Eldridge 424 U.S. 319, 96 S. Ct. 893 (1976) Maumee v. Gabriel (1988), 35 Ohio St.3d 60, 518 N.E.2d Natl. City Bank of Cleveland v. Natl. City Window Cleaning Co. (1963), 174 Ohio St. 510, 190 N.E.2d Ohio Assn. of Pub. School Emp., AFSCME, AFL-CIO v. Lakewood City School Dist. Bd. of Edn. (1994), 68 Ohio St.3d 175, 624 N.E.2d Ohio Historical Soc. v. State Emp. Relations Bd. (1993), 66 Ohio St.3d 466, 613 N.E. 2d O'Nesti v. DeBartolo Realty Corp., 113 Ohio St.3d 59, 2007-Ohio-I Sorrell v. Thevenir (1994),69 Ohio St.3d 415, 633 N.E.2d State ex rel. Davis v. Public Emps. Retirement Bd., 174 Ohio App.3d 135, 2007-Ohio State ex rel. Grein v. Ohio State Hwy. Patrol Retirement.Sys., 116 Ohio St.3d 344, 2007-Ohio State ex rel. Mallory v. Pub. Emp. RetirementBd. (1998), 82 Ohio St.3d , 6 State ex rel. Van Dyke v. Pub. Emp. Retirement Bd., 99 Ohio St. 3d 430, 2003-Ohio State v. Edwards (1952), 157 Ohio St. 175, 105 N.E.2d State v. Hill, 2008-Ohio State v. Mateo (1991), 57 Ohio St.3d 50, 565 N.E.2d Taylor v. Sturgell, 553 U.S. _, 128 S. Ct, 2161, 2008 WL passim Voeller v. Neilston Warehouse Co. (1940), 136 Ohio St. 427, 26 N.E.2d Statutes 42 U.S.C. 410(a)(7) U.S.C. 415(a)(7)... 6 R.C R.C (A)(4)... 1 R.C R.C (A)(1)... 1 Other Authorities 1972 Ohio Atty. Gen. Ops. No Wigmore, Evidence (3 Ed.1940), Rules Evid. R. 801(D)(1) ii

4 Evid. R. 804(A) iii

5 I. General Rebuttal The OPERS Board improperly argues (pp. 8, 18) that it occasionally permits parties to take depositions. There is no such testimony or evidence in this record. Its brief also contends that Relators have not pointed to anything in the record which precluded taking depositions. Its specious statement is wholly indefensible. Relators protested their inability to take depositions long before the hearing began. (Relators' Supp. p. 1, R ).' See also, R , , not included in any Supplement requesting OPERS to allow depositions. Respondent's assertion that Relators failed to notify the hearing examiner of any deposition or testimonial difficulty (p. 8) is equally specious. See, R and 05, attached hereto, where the hearing examiner admitted the lack of subpoena power and Joint Supp , R where Relators brought to the hearing examiner's attention their request that Respondents produce witnesses for the hearing. Neither Respondent produced a single witness for the hearing. Next, its brief (p. 4) continues to misstate that the OPERS Board found Relators were not public employees. The OPERS Board's order states "that the Franklin County Public Defender's Office was not operating as a public employer from January 1, 1985 through January 1, " It made no ruling whether Relators were public employees. (See, Second Brief at 3). As footnote 1 in Relators' Second Brief shows, a public employee can work for a private employer.z Furthermore, R.C (A)(4) provides that "[i]n all cases of doubt, the public employees retirement board shall determine whether any person is a public emuloyee..." The ' "[W] understand your letter to be a ruling... that PERS lacks authority to compel discovery from our adversary both by means of subpoena for depositions before trial and the use of subpoenas to compel the attendance of witnesses at trial. Thus, we must proceed in this matter without the ability to compel witness testimony or documents in advance of, or for, the hearing. Please note our objection, on due process and fundamental fairness grounds, to the requirement that Claimants must participate, with the noted deficiencies..." ' In a siniilar vein, teachers may purchase service credit in the State Teachers Retirement System (STRS) for teaching in a private school. R.C (A)(1). The state retirement systems are not limited exclusively to public employees or wages paid exclusively by public employers.

6 OPERS Board failed to determine whether Relators were public employees. The word "shall" is to be "construed as mandatory unless there appears a clear and unequivocal legislative intent that [it] receive a construction other than [its] ordinary usage." Dorrian v. Scioto Conserv. Dist. (1971), 27 Ohio St.2d 102, 271 N.E. 2d 834, 1 syllabus. OPERS (p. 3) and the Franklin County Respondents (Franklin County) (p. 2) also contend that Relators' lengthy Statement of Facts regarding the dominion and control exercised by the Franklin County Public Defender Commission (FCPDC) over the Franklin County Public Defender (FCPDO) is irrelevant to the preclusion issue. However, it is precisely this control and corporate structure which makes FCPDC essentially the same entity as FCPDO and these facts differentiate this case from that of State ex rel. Van Dyke v. Pub. Emp. Retirement Bd., 99 Ohio St. 3d 430, 2003-Ohio The different facts, different record, different legal issues, different statutes, and different arguments demonstrate why the Court of Appeals was correct in reversing the OPERS Board's order. It may also be fairly said that OPERS' insistence on applying preclusion under these substantively different circumstances proves that it lacks "expertise" in this area of the law and the courts should not defer to any of its rulings applying common law defenses. The previous rebuttal point ties directly into OPERS' next argument (p. 3-4) that the standard of review on decisions involving the application of res judicata or collateral estoppel is the "some evidence" test. The doctrines of res judicata, collateral estoppel and privity are not evidentiary questions. They are questions of law. 3 And, in this case, the rulings by the OPERS decision-makers were based entirely upon a comment in the Van Dyke opinion. Reading and applying a court opinion is simply not evidentiary. The OPERS decision-makers either did or did ' State v. Hill, 2008-Ohio-3509, 37 can be added to the list of courts reviewing preclusion and privity questions de novo. (See, Second Brief 14-15) 2

7 not read and apply Van Dyke correctly. That is a pure legal question. Ohio Historical Soc. v. State Emp. Relations Bd. (1993), 66 Ohio St.3d 466, 471, 613 N.E. 2d 591 says: "An agency adjudication is like a trial, and while the reviewing court must defer to the lower tribunal's findings of fact, it must construe the law on its own," Thus, the "some evidence" test is wholly inappropriate in this case. Further, the Court of Appeals said an erroneous application of the law is an abuse of discretion. State ex rel. Davis v. Public Emps. Retirement Bd., 174 Ohio App.3d 135, 2007-Ohio-6594, 41. (OPERS Supp. C-22, 41). Secondly, the OPERS Brief, p. 3, cites State ex rel. Schaengold v. Ohio Pub. Emp. Retirement Sys., 114 Ohio St.3d 147, 2007-Ohio-3760, 19 and argues that it establishes the "some evidence" test as the standard of review in mandamus cases. But, this court actually applied the following rule in 20, to uphold the OPERS decision in Schaengold: "There is sufficient evidence here to support the board's determination that Schaengold was an independent contractor rather than a public employee..." The "some evidence" language was mentioned in the opinion as the ruling of the lower court in Schaengold. This court, however, did not adopt the "some evidence" test as the authoritative standard of review. Additionally, this court in State ex rel. Grein v. Ohio State Hwy. Patrol Retirement Sys., 116 Ohio St.3d 344, Ohio-6667, 1, 9, 11, also spoke in terms of a review for "sufficient evidence." As a concluding point, without reference to any evidence in the record, Franklin County's Third Brief asserts (pp. 1-3) that because of a corporate technicality on its part, Relators are seeking a windfall. The assertion is groundless. The Franklin County Respondents had a plan. They wanted to control the FCPDO. They devised a plan whereby the FCPDC and the FCPDO would be essentially the same entity. (See, Relators' Second Brief at 5-8). They established the Articles of Incorporation and the Code of Regulations to meld the two entities into one decision- 3

8 making and controlling body. They even said that FCPDO and FCPDC were the same entity in their minutes: "this commission be the sole members of the corporation and that the board of trustees of the corporation will be the commission, so that individually they are the trustees and collectively they are the corporation." (Relators' Supp. 7, p. 27, R ). This was no technical omission or error. This melding of the two entities was precisely their intent. Its windfall argument is less than candid. In 1999, Franklin County sought and received a substantial FICA refund from the federal government for Ms. Mallory and other similarly situated FCPDO employees ("the pre-1985 hires"). (See, R ; R not included in any Supplement). Franklin County could have also received a substantial FICA refund for Relators and those similarly situated ("the post-1985 hires"). If Franklin County had pursued the FICA refund, then it would have been required to apply State ex rel. Mallory v. Pub. Emp. Retirement Bd. (1998), 82 Ohio St.3d 235, to Relators and, going forward, include them in OPERS, something Franklin County didn't want to do. Thus, Franklin County's evasion of its OPERS obligations was part of the plan. By maintaining the fiction that FCPDO was a "real" corporation, Franklin County could argue that the post-1985 hires were (A) in the social security system4 (B) not entitled to participate in OPERS and (C) exclude them from the service credit benefits of the Mallory decision. The nonprofit corporation was its justification. This was a money decision. Despite an Attorney General Opinion encouraging employers to seek a ruling from OPERS staff in questionable cases, Franklin County didn't bother to seek any authoritative opinion regarding the legality of what they were doing with Relators' pensions. See, 1972 Ohio Atty. Gen. Ops. No As there was a question whether Franklin County could operate as it was doing, it was Public employee retirement systen s are excluded from participation in social security. 42 U.S.C. 410(a)(7). 4

9 incumbent upon the Franklin County Respondents, not its employees, to resolve the issue. Franklin County's Third Brief does not even discuss these facts which are in the record. Had Franklin County realistically assessed the realities and legalities of the situation and admitted that FCPDC and FCPDO were essentially the same entity, as Relators have shown, it could have stopped its losses many years ago by simply dissolving the nonprofit corporation, included Relators and the post-1985 hires in OPERS and stopped paying FICA taxes. This would have eliminated any claims for service credit by Relators. Franklin County could have done this at any time during the 14 years between 1985 and The transition to OPERS would have been as uncomplicated in any of those years as it was in 1999 when Franklin County unilaterally placed the post-1985 hires in OPERS without their consent. (R , 01495). As a final point, Franklin County wholly ignores the harm it has caused to Relators. Franklin County first placed them in the social security system. Relators had nothing to say about this management decision. After Franklin County realized that its strategy was unsuccessful (R.01359, 01717), it alone decided to place Relators and the post-1985 employees in OPERS effective January 1, This, too, was done without their consent. These employees are now in two different pension systems. The most service credit these employees can accumulate in social security is 13 years. They cannot work long enough in OPERS (30 years) to get a full pension. Thus, because of Franklin County's stubborrt adherence to a system it knew had to eventually fail, Relators and the post-1985 hires lost the opportunity to earn full pension benefits in either system. It is ironic that Franklin County argues Relators will receive a "windfall." In fact, the opposite will happen. Membership in both social security and OPERS will result in what is commonly referred to as a "windfall offset." The Social Security Administration according to a 5

10 statutory formula will deduct a percentage of the post-1985 hires' monthly social security payment based upon the amount of their OPERS monthly pension check. This evidence is in the record. (R , 42 U.S.C. 415(a)(7)). Rather than benefiting as Franklin County suggests, the post-1985 hires will be harmed when they retire. This "Windfall Elimination Provision" is explained in the Social Security Administration's Publication which is in the record. (R ). Franklin County's strategy was developed in consultation with lawyers and consultants. Over the years, the FCPDC members and Kura discussed their potential liability for the OPERS contributions and knowingly assumed the risk of an adverse determination.5 Franklin County decided that it was better to litigate the issue later and take its chances than to properly address it at the time. Franklin County alone is responsible for its present problem concerning Relators pensions. Further, Franklin County alone increased its liability by agreeing to waive its defenses and apply this decision to all of its post-1985 hires if the Relators prevail. Nothing in law required them to make such a concession. Finally, Franklin County has acted with unclean hands. Mallory, supra, 244 said it and it is again true. This situation is truly one of its own making. II. REBUTTAL TO CROSS-APPELLEE PUBLIC EMPLOYEES RETIREMENT BOARD PROPOSITION OF LAW NO. 1: An Agency Order Finding Privity Between Co-emploVees Which Is Based Solely Upon MutuaGtv Of Interest And Identity Of Desired Result Violates The Due Course Of Law Provision Under Article I. Section 16 Of The Ohio Constitution and The Due Process Of Law Clause Of The Fourteenth Amendment To The United States Constitution 5 At an FCPDC meeting in September 1993, one FCPDC member said that "the Board dealt with the PERS issue for a long time," Kura's successor Stevenson, stated that "she talked to Jim [Kura} and he didn't remember having anybody specifically look into this." (R ). The FCPDC member then stated: "if these former employees are able to tag us and contend that we were subject to Public Employees Retirement System, they would be looking for contributions of sizable proportions." (R ). See also, (R , 00351, , 01773, fn 1). 6

11 OPERS' First Contra Proposition of Law assumes that Relators are "similarly situated" to Ms. Van Dyke. They are not. See p. 2, supra and Second Brief at 20-22, Further, as noted in Relators' Second Brief, pp , the OPERS staff admits that the Van Dyke case and this case presented different issues. However, the OPERS Board is before this court now arguing that the issues are the same. Thus, its Proposition of Law lacks a basis in the facts of this case and it lacks credibility. OPERS' First Contra Proposition of Law also states that it is based upon the "general principle of stare decisis." This court said in Arbino v. Johnson & Johnson, 116 Ohio St.3d 468, 2007-Ohio-6948, 23 that stare decisis "is limited to circumstances `where the facts of a subsequent case are substantially the same as a former case. "' Thus, its Proposition of Law lacks a basis in law. The facts are not substantially the same in the two cases. Next, Respondent OPERS argues that 1 of the syllabus in Goodson v. McDonough Power Equip., Inc. (1983), 2 Ohio St.3d 193, 443 N.E. 2d 978 and its discussion of due process have been modified by Brown v. City of Dayton (2000), 89 Ohio St.3d 245, 2000-Ohio-148 and O'Nesti v. DeBartolo Realty Corp., 113 Ohio St.3d 59, 2007-Ohio It misreads both of those cases, Neither Brown nor O'Nesti mention Goodman, thus they could not have modified it. O'Nesti, referring to Brown, said in 9: "A `mutuality of interest, including an identity of desired result,' miht also support a finding of privity." See also the discussion of Brown in Relators' Second Brief at pp However, O Nesti concluded in 12 that "[t]he relationship between co-employees subject to the same employment-related contract, without more, does not establish privity. It held in the syllabus: Plaintiffs who are employees of the same employer and who have each signed an employment-related contract with the employer are not in privity for the purpose of claim preclusion if each employee is entitled to different benefits under the 7

12 contract. O Nesti also says: "it would be unfair to require a defendant in the original suit to raise every conceivable defense that might possibly apply to future related claims even if those defenses have limited or no applicability to the original plaintiffs." The point is just as applicable in reverse. It would be unfair to require a co-employee in the original suit to raise every conceivable argument that might possibly apply to a co-employee's future claims even if those arguments have limited or no applicability to the original party. Fratiklin County's effort to distinguish O'Nesti as a case limited only to offensive uses of collateral estoppel (Third Brief at 23) is unavailing. The defensive use of collateral estoppel against a nonparty contains the same constitutional and fairness concerns. The O'Nesti syllabus is consistent with the recent case of Taylor v. Sturgell, 553 U.S. 128 S. Ct, 2161, 2008 WL , which expressly disapproves on due process grounds any argument that a "close enough"6 relationship between two litigants is sufficient to bar the second case on preclusion grounds. O'Nesti reaches the same conclusion upon non-constitutional grounds. Application of the claim or issue preclusion defense to a nonparty's case requires proof that the first litigant's representation of a nonparty is adequate. At a minimum, this requires proof from the defending party that: (1) the interests of the nonparty and the first litigant are aligned and (2) either the first litigant understood herself to be acting in a representative capacity of the nonparty or the original court took care to protect the interests of the nonparty. In addition, adequate representation sometimes requires (3) notice of the original suit to the persons alleged ' The Sturgell Respondents made precisely the same argument-that whenever the relationship between a party and a non-party is "close enough" the second litigant can be barred by the doctrine of claim preclusion. The court in a unanimous opinion said at 128 S, Ct. 2175: "We reject this argument for three reasons." 8

13 to have been represented. The Supreme Court in Taylor reaffirmed that "our decisions emphasize the fundamental nature of the general rule that a litigant is not bound by a judgment to which she was not a party." To like effect but not in a preclusion case, this court has held the same. As a general rule, a court is without jurisdiction to make findings against a person who were not served with summons and was not a party to the court proceedings. See, State ex rel Ballard v. O'Donnell (1990), 50 Ohio St.3d 182, 553 N.E.2d 650, 1 syll. Similarly, GaltAlloys, Inc. v. KeyBankNatl. Assn (1999), 85 Ohio St.3d 353, 708 N.E.2d 701 holds in 1 of the syllabus: "Due process requires that persons whose property interests are jeopardized by the filing of legal proceedings be given notice reasonably calculated, under all the circumstances, to apprise those persons of the pendency of the action and afford them an opportunity to present their objections." OPERS' First Proposition of Law contravenes the rules of law expressed in both of those cases. The Respondents in Taylor also argued that courts should make the "close enough" determination through a"heavily fact-driven" and "equitable" inquiry. The court rejected this argument saying an all-things-considered balancing approach might spark wide-ranging, timeconsuming and expensive discovery wherein a district judges would be called upon to evaluate preclusion under a standard that provides no firm guidance. This ruling is notable here because the OPERS decision-makers didn't even do that. They simply read the Van Dyke opinion to bar Relators' case. They reviewed no "heavily fact-driven" evidence. The OPERS decision-makers accepted an affidavit saying that FCPDO was the same entity as in Ms. Van Dyke's case. The rule advocated by the OPERS Board here would not even satisfy the argument expressly rejected by the court in Taylor. That rejected argument contained greater safeguards than the OPERS Board advocates in its First Proposition of Law. 9

14 The disturbing, perhaps deceitful, factor in this case is that both the OPERS staff and the Franklin County Respondents knew that the Van Dyke case was in the process of being decided by OPERS and preceded Relators' case. They also knew and admit that the facts and issues are different. However, Relators were never made aware of the Van Dyke case until it was used to ambush them and bar their case. See further Relators' Second Brief at The Supreme Court held in Richards v. Jefferson County Alabama, 517 U.S. 793, 794, 116 S. Ct (1996) that where there is a lack of notice of the earlier litigation and no evidence that the first litigant agreed to represent the interests of the second, it is a violation of due process to bar the second suit. The OPERS ruling is unconstitutional not only under Taylor; but also under Richards decided eight years earlier. The Taylor case is a rejection on constitutional grounds of Respondents' argument that a "mutuality of interest including identity of desired result" alone satisfies the privity requirement. The Taylor. case is also a rejection on constitutional grounds of the reference in Brown at p. 48 that sometimes "close enough" is a legitimate basis for finding privity. The Supreme Court in Taylor clearly held that the traditional rule of privity and preclusion is premised upon constitutional notions of fairness and the safeguarding of a citizen's right to have his case heard on the merits. An administrative order barring one's case based upon nothing more than a finding of "mutuality of interest including identity of desired result" is unconstitutional and the Court of Appeals was correct to vacate the OPERS Board's order and order a hearing on the merits. Respondent Franklin County has advanced the "open the floodgates" argument. The Taylor court rejected that as a basis for permitting a "close enough" test in privity and preclusion cases. 128 S. Ct at Both Respondents argue that Relators do not seek relief specifically tailored to fit their 10

15 unique circumstance or factual situation. Relators say that not only do they seek relief specifically tailored to fit their unique circumstances, but Ms. Van Dyke sought relief specifically tailored to her unique facts as a carryover employee which circumstance (and statute) differs from those of Relators. It is not only the different pension benefits each individual will receive, but it is the different facts and statutes of each case which presents the court with a set of "unique circumstance or factual situation" for Relators. OPERS also suggests (Third Brief 10-11) that O'Nesti is distinguishable because the stock plan was not offered to all employees, whereas here, OPERS applies to all public employees. Although there are more, two reasons rebut that misreading of O Nesti. First, this court found that the Agostinelli plaintiffs (the first litigants) to whom the stock plan also applied were not in privity with the O Nesti plaintiffs. Thus, the court compared equals under the stock plan. It was open to all who were eligible. Secondly, the circumstance that an employment contract was involved there and statutes are involved here is not a difference in principle. The point of O'Nesti is that where the facts are different or the parties in the second suit are entitled to different pension amounts or benefits (relief specifically tailored to fit their unique circumstance or factual situation), the second case will not be precluded. That is precisely why this court wrote the syllabus as it did. The "close enough" language in Brown which is actually quoted from another case should be overruled. It is clearly inconsistent with Taylor. The O Nesti syllabus with a slight modification for issue preclusion could be the second paragraph of the syllabus in this case. Relators who are employees of the same employer and who potentially are entitled to membership and service credit in OPERS are not in privity for the purpose of issue preclusion if each employee is entitled to different benefits under O.R.C. Chapter 145 and its implementing rules. This record contains no proof that: Van Dyke and Relators' interests are aligned; Van 11

16 Dyke understood she was acting in a representative capacity for Relators; and that Relators were aware of the Van Dyke case when it was before the OPERS decision-makers. Nor is there any proof that this court was asked by the litigants in Van Dyke to protect the interests of these Relators. And, there isn't any mention in the Van Dyke opinion of protecting Relators or their interests. Thus, constitutionally, Taylor v. Sturgell prohibits application of the Van Dyke case to bar Relators' case. The decisions of the OPERS Board and the magistrate which rely entirely upon Brown are constitutionally infu-m. Putting aside all other constitutional considerations, without proof that Ms. Van Dyke understood that she was representing Relators' interests, and there is no proof in this record, Taylor prohibits application of either claim or issue preclusion to bar Relators' service credit claims. Thus, the OPERS Board's order is unconstitutional and the Court of Appeals was correct to vacate it. III. REBUTTAL TO CROSS-APPELLEE PUBLIC EMPLOYEES RETIREMENT BOARD PROPOSITION OF LAW NO. 2: The OPERS Service Credit Determination Hearing Violated Due Process A. The Mathews v. Eldridge Balancing Test OPERS argues (Third Brief 15) that the judicial model does not apply to its proceedings and that Relators received more than due process requires. But, this isn't a question of how many. The precise question is whether Relators' due process rights were violated where O.A.C , the OPERS appeal rule, provides Relators with none of the discovery tools used by a lawyer to prepare a case, the OPERS Board lacks subpoena power, the Franklin County Respondents were permitted to submit affidavits as conclusive testimony, the affiants were available to testify but did not, Relator objected to the admission of the affidavits and requested affiants presence at the hearing, and one of the affidavits entirely barred Relators' case. By using 12

17 affidavits, the Franklin County Respondents were able to testify without being cross-examined. Relators contend that under such circumstances its opportunity to be heard was constitutionally deficient. The hearing examiner limited the issues for hearing to those not precluded by Van Dyke. (Joint Supp , R ). His Journal Entry permitted Respondents to prove the existence of the corporation by affidavit and limited the issues to "(1) whether Respondent employer is the same employer as the employer in Van Dyke, and (2) whether the corporate form remained unchanged during the time period relevant to this action." If Respondent proved that Relators' employer was the same employer as the employer in Van Dyke, Relators were precluded from "asserting the Respondent employer is a`public employer' as that term is used in R.C " (Id. Joint Supp , R ). This ruling is prejudicial because it precluded Relators from proving tliat the FCPDO was essentially the same entity as FCPDC (or was its alter-ego, agent etc.) and thus their case presented different issues than Van Dyke. Relators concede that they were given notice of the hearing and an opportunity to present some, but not all, of their evidence. Relators were unable to present testimony by way of crossexamination. Relators objected to the admissibility of all affidavits submitted by the Franklin County Respondents because the affiants were not subject to cross examination during the hearing; and, an affidavit is an out-of-court statement that, while made under oath, was not subject to cross examination at the time it was made and, therefore, was hearsay. (Joint Supp , R , Tp. 32). All affidavits were nevertheless admitted in evidence. (Joint Supp , R , Tp. 49). The declarants were available to testify (they signed the affidavits). Thus, had the rules of evidence applied, the affidavits would have been excluded from evidence. Evid. R. 801(D)(1) and Evid. R. 804(A). City of Columbus v. Hall, 1984 WL 4609, Moyer, J. 13

18 concurring. See also, Kiser v. Allstate Insurance Co (2007), 144 Ohio Misc. 2d 12, 2007-Ohio citing cases from this court. However, the rules of evidence do not apply in the OPERS hearings. O.A.C , provides that "any form of documentation"7 may be submitted in the record. If anything is admissible for the record then the proceeding is not a quasi-judicial proceeding. It is more like a fact-finding process simply to make a record. Moreover, where anything is permitted in the record and OPERS lacks subpoena power, the proceeding has no quasi-judicial character. To apply issue preclusion, there must be a judicial or quasi-judicial proceeding. In common parlance "quasi" means almost like the original, having some resemblance to the original. Quasi-judicial means essentially a judicial character, having attributes of a judicial proceeding, Black's Law Dictionary (Seventh Edition) defines "quasi" as "as if; ahnost as it were; analogous to." The OPERS hearing is not quasi-judicial and thus issue preclusion effect cannot be derived from its hearings. Relators acknowledge that courts generally have held that the rules of evidence are relaxed in administrative proceedings. But, a service credit determination by OPERS is not an administrative proceeding under O.R.C. Chapter 119. The OPERS Board is not defined as an "agency" under R.C Therefore, none of the due process protections in the Ohio Administrative Procedure Act apply to the OPERS proceedings. Realistically, there are no rules governing the process. The hearing examiner attempted to make up some rules (Joint Supp , R ). But, he lacks authority to do that. Indeed, the Franklin County Respondents so stated in the record.8 ' O.A.C (C)(1)(a) now (C)(1)(b) provides: "At the hearing, parties to the appeal and staff are permitted to subniit evidence in the form of witness testimony and any form of documentation." 8 The Franklin County Respondents objected to the hearing examiner's order that he would use the rutes of evidence as a guide as he was powerless to add authority where none is provided by law. (Joint Supp , , R. 14

19 State, ex rel. Keeler, v. Levine (1984), 19 Ohio App.3d 113, 114, 483 N.E. 2d 185 holds that a hearing examiner appointed by the State Personnel Board of Review (SPBR) does not possess or exercise quasi-judicial power.9 The OPERS-appointed hearing examiners possess substantially less authority than that possessed by the SPBR hearing examiners.10 The hearing examiner cannot establish rules for the hearing or make them up as the case proceeds. OPERS Second Proposition of Law argues that as long as Relators had notice of the hearing and an opportunity to be heard, due process is satisfied regardless of the character of the evidence admitted into the record or whether its record of proceedings may be reviewed by a court. O.R.C. Chapter 145 contains no guidance." Pursuant to its rule-making authority,12 OPERS promulgated O.A.C But, this rule contains no procedures to be followed and no protections which ensure that evidence is trustworthy or the record contains all the evidence the parties desire to present. This rule allows anything into the record. Thus, a service credit determination proceeding is essentially a proceeding without rules. It is not quasi-judicial because there are no statutory procedures and no administrative rules regulating the manner of conducting the hearing or what is to be contained in the record which may be subject to court review. A complete record cannot be made because the OPERS Board lacks subpoena power. OPERS says that a due process objection must be analyzed by balancing administrative 02748, , Tp. 35, 40-41). Relators agree with the objection. The hearing exanriner lacks authority to promulgate rules for the OPERS Board as the duty is statutory and imposed upon the OPERS Board. This duty is non-delegable. R.C "That respondent is not empowered to act in a quasi-judicial capacity is apparent from the fact that inherent in the function of an examiner or referee is the limitation that he must submit his work product to his appointing authority for its final disposition. See Civ. R. 53. Accordingly, it is clear that respondent is not a public official authorized in proper cases to discharge quasi-judicial power." 10 The SPBR process allows for subpoenas, depositions and application of the rules of evidence. R.C (A)(7); O.A.C ; O.A.C " R.C (A)(4) provides only that "[i]n all cases of doubt, the public employees retirement board shall determine whether any person is a public employee, and its decision is final." 12 R.C provides: "The board shall perform other functions as required for the proper execution of this chapter, and may adopt rules in accordance with section of the Revised Code for the proper administration and management of this chapter." 15

20 efficiency against the interests of Relators. This is the Mathews v. Eldridge 424 U.S. 319, 335, 96 S. Ct. 893 (1976) test.13 In a due process challenge to an "administrative" type of proceeding, Mathews requires the court to balance: 1) the private interest that will be affected by the official action; (2) the risk of an erroneous deprivation of such interest through the procedures used, and probable value, if any, of addifional procedural safeguards; and (3) the government's interest, including the fiscal and administrative burdens that the additional or substitute procedures would entail. The Court of Appeals ordered a hearing on the merits. If this court affrrms the ruling of the Court of Appeals, this use of affidavits in OPERS service credit determinations will take on even more importance. When the merits hearing goes forward, the affidavits will remain in the record and the Franklin County Respondents will have testified and avoided cross-examination. Relators contend that they should be excluded from evidence. In this case, the progression of a service credit determination case involves: a staff determination, a hearing before an OPERS-appointed hearing examiner and time-limited oral argument before the OPERS Board. There is no appeal allowed by statute. Thus, court review is under the abuse of discretion test. A court reviews the record for an abuse of discretion. But, the record is created without any rules. The court gives deference to the OPERS factual findings. But, these too are produced without any rules. There are no built-in safeguards to protect the rights of an employee's interest during the OPERS process. The private interest in this case is Relators' right to have his/her service credit claim (their pension) determined by a process which is fundamentally fair. Regarding the fairness and reliability of the existing OPERS procedures and the probable value of additional procedural safeguards the scale of justice lands squarely upon the side of the 13 Maumee v. Gabriel ( 1988), 35 Ohio St.3d 60, 518 N.E.2d 558 used the Mathews balancing test. 16

21 individual. The affiants are "interested" or biased witnesses in the sense that some of the affiants were the decision-makers who made the very decisions under review in this case. There are credibility issues as the affiants present only one side of the facts. Every trial lawyer advises the jury that there are "two sides to every story." Lacking subpoena power, OPERS cannot provide Relators with any other way to clarify, contradict, impeach or show bias in the affidavit testimony. Further, cross-examination is more important here where the facts of this case are anything but routine. Thus, the risk of erroneous deprivation under existing procedures is extremely high. The probable value of an additional safeguard is necessary to a fundamentally fair proceeding. And, cross-examination is the greatest legal engine ever invented for the discovery of truth. California v. Green, 399 U.S. 149, 158, 90 S. Ct (1970), quoting 5 Wigmore, Evidence (3 Ed.1940), There is no burden on the OPERS Board by imposing this safeguard. Relators ask only that the court exclude the affidavits from the record. Or, if the affidavits are admitted, the affiants must be made available to be fully cross-examined on all aspects of the case. This safeguard of fundamental fairness costs nothing and causes no delay in the process. Natl. City Bank of Cleveland v. Natl. City Window Cleaning Co. (1963), 174 Ohio St. 510, , 190 N.E.2d 437 discussing the use of affidavits in a permanent injunction case states: "[t]here the adverse party has a right to be confronted by the witnesses against him and, as to affidavits, may invoke the rule which excludes hearsay evidence. Consequently, affidavits are not generally admissible over objection at the trial to establish facts material to the issue being tried." See also, Coventry Towers, Inc. v. Cuyahoga County Board of Revision, 1986 WL 6717, *3, holding that a litigant's due process rights were violated by the admission into evidence of 17

22 affidavits where no opportunity was available for cross-examination. Paraphrasing, this court held in the syllabus in Ohio Assn. of Pub. School Emp., AFSCME, AFL-CIO v. Lakewood City School Dist. Bd. of Edn. (1994), 68 Ohio St.3d 175, 624 N.E.2d 1043 that a terminated public school employee is entitled to procedural due process at the employee's post-termination arbitration hearing but it does not require face-to-face confrontation when the employee is permitted to cross-examine the adverse witness or witnesses at the hearing. Lakewood is analogous authority here that the OPERS process violates due process because Relators were denied all rights to cross-examine the affiants. As this court said in Lakewood at p. 179, "A party is entitled to a meaningful opportunity to challenge the adverse evidence." Receipt of the affidavits into evidence over objection denied Relators a meaningful opportunity to challenge this adverse evidence. "As our decisions have emphasized time and again, the Due Process Clause grants the aggrieved party the opportunity to present his case and have its merits fairly iudged." Logan v. Zimmerman Brush Co. (1981), 455 U.S. 422, ,102 S. Ct The right to a hearing means a right to a hearing at a meaningful time and in a meaningful manner before a competent tribunal. Armstrong v. Manzo (1965), 380 U.S. 545, 552, 85 S. Ct. 1187; Voeller v. Neilston Warehouse Co. (1940), 136 Ohio St. 427, 26 N.E.2d syll.; State v. Edwards (1952), 157 Ohio St. 175, 105 N.E.2d syll.; State v. Mateo (1991), 57 Ohio St.3d 50,52-53, 565 N.E.2d 590. The Due Process Clause provides that certain substantive rights-life, liberty, and property-cannot be deprived except pursuant to constitutionally adequate procedures. Cleveland Bd. of Edn. v. Loudermill (1985), 470 U.S. 532, 541, 105 S. Ct See, also, Sorrell v. Thevenir (1994), 69 Ohio St.3d 415, , 633 N.E.2d 504. "But procedural due process rules are shaped by the risk of error inherent in the 18

23 truthfinding process as applied to the generality of cases, not the rare exceptions." Mathews, at 344. This case is not the exception. O.A.C applies to all OPERS Board cases. Presenting a witness not subject to cross-examination presents a substantial risk of error in the OPERS truthfinding process. Here there is nothing to support any argument to maintain the status quo and there is no cost and no burden to the additional safeguard advocated by Relators. The three Mathews criteria, with their subparts, weigh in favor of the additional safeguard advocated by Relators. There is nothing on the scale weighing in favor of allowing OPERS to continue conducting service credit determination hearings in this manner. Thus, until OPERS promulgates rules for a fundamentally fair hearing and ensures that the record evidence is credible or the General Assembly vests subpoena power in the OPERS Board, this court should hold that it is a due process violation to admit into evidence in a service credit determination hearing conducted under O.A.C an affidavit when the affiants are available to testify and the opponent objects to the admission of the affidavits. IV. Conclusion For the foregoing reasons, the arguments presented by Respondents-Cross-Appellees should be rejected and the judgment of the Court of Appeals should be affirmed. The Propositions of Law presented by Relators as both Appellees and Cross-Appellants should be adopted by this court. Respectfully submitted, es E. Melle ( ) onell R. Grubbs ( ) UCKLEY KING, L.P.A. One Columbus, Suite West Broad Street Columbus OH

24 (614) (614) (facsimile) Counsel for Relators-Appellees Cross-Appellants CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and accurate copy of the foregoing Fourth Brief of Relators-Appellants, Cross-Appellees was served via first class U.S. mail, postage prepaid, this 7`i' day of August, 2008, upon: Nick Soulas Terri G. Rasmussen Assistant Prosecuting Attomey Lane, Alton & Horst LLC 373 South High Street, 13th Floor Two Miranova Place, Suite 500 Columbus, Ohio Columbus, OH Laura Erebia-Parsons Assistant Attorney General 30 East Broad Street, 26th Floor Columbus, OH H:\CL\22979\016\P1eadings\Foarlh Brt doc 20

25 A LEGAL PROFESSIONAL ASSOCIATION BUG7(LEY 1WG ONE COLUMBUS 10 WEST BROAD STREET, SUITE 1300 LEGAL NOV 7 1 2W3 COLUMBUS, OHIO (614) (877) (614) FACSIMILE bk@bucklaw.com Writers Direct melle@bucklaw.com Chester T. Lyman, Jr. Lyman Law Offices 1313 East Broad Street, Suite 17 Columbus, Ohio November 20, 2003 Dear Mr. Lyman: Re: Claim of Post 1984 Staff, Franklin County Public Defenders Office, Franklin County Public Defender Conunission, and Franklin County Board of Commissioners By letter dated November 6, 2003, I requested opposing counsel to make available for deposition, and to identify some dates for the depositions of, two of the following four persons. By letter dated November 14, 2003, I requested opposing counsel to make available for deposition, and to identify some dates for the depositions of, the other two persons listed below. I have been unable to obtain the agreement of opposing counsel to take the discovery depositions of those four individuals whom I have listed as witnesses at trial. Incidentally, two of those persons are listed as witnesses on Franklin County's witness list. I have reviewed O.R.C. Chapter 119 and O.A.C am unable to determine whether PERS, and you as its Hearing Officer, possess subpoena powers. If PERS, and you as its Hearing Officer, possess subpoena power, would you please authorize the issuance of deposition subpoenas to the four individuals named below. I will have the subpoenas served. It is important that this matter be addressed immediately as the trial date is scheduled for February 10, with the final pretrial set for January 16, In the event that PERS, and you as its Hearing Officer, detelmine that it and you lack such power, then Claimants request that you, in your capacity as Hearing Officer, issue an order to Respondents to make available for deposition the following four persons who are either members of the Franklin County Public Defender Commission (FCPDC) or employees of the Franklin County Public Defender's Office. These persons are: PERS CLEVELAND COLUMBUS CINCINNATI ATLANTA DETROIT

26 BUG7(LEY king Chester T. Lyman, Jr. November 20, 2003 Page 2 1. Gerald Simmons, former member FCPDC 2. Ritchey Hollenbaugh, former member FCPDC 3. Beverly Leake, employee of FCPDO 4. Phil Churchill, employee of FCPDO Also, at the status conference in this matter, held on October 20, 2003, you stated that the parties would receive an order confinning the dates for all scheduled actions and appearances in this matter. To date, I have not received a copy of that scheduling order. Would you please mail a copy to me at the address shown on this letter. Thank you for your assistance. Very truly yours, JEM\eah cc: Teri Rasmussen Nick Soulas Joseph Marotta Julie Emch Becker, General Counsel, PERS Clients H ACLU2979\OO0Corrcs\PEM1.ymmLUI12d7i.duc ^^v^^^^^lf ^/, IJames E. Melle PERS 01912

27 12/11/ : LYMAN LAW OFFICES PAGE 02 CHESTER T. LYMAN, JR..A.llnrney At Luw Of Counsel: Webster S. l.yman W. S. Lyman, Sr. ( ) 1313 East Broad St Teleptrone: Suite 17 Cell: 61461gOG84 cotumbus,!']hio Fax: James E. elte, Esq. Buckley 'ng & Bluso lu West oad Street Suite 130 Columbu, 01-I Dear Mr. {delle: December 10, 2(X)3 Re: (OPERS) Franklin County Public Defenders I in receipt of your correspondence regarding your request for discovery and for docu nts and statements through subpoenas. You may recall that when we conducte the pre-hearing conference, the parties had agreed to exchange docutnents voluntaril. This exchange would be in lieu of a formal document production and discovery rocess. In fact, I know of no statutory or regulatory authority that gives to the OPERS ard any powers to compel the issuance of such subpoenas or to produce documen as in discovery. ile these cases may be heard in a manner similar to one under Chapter 119 of the Ohio dministrative Procedures Act, there is no procedure for compelling prehearing d covery. The procedures for this heariugare set forth in Ohio Administrative Code Sec on , effective January 1, 2(H)3. A copy of that document is attuchcd. 0 e of the purposes of the pre-hearing conference we beld was to provide for the smooth fl w of information and evidence at the bearing. "I'lte Hearing Officer at this point is not inc ned to direct the progress of the parties' exchange of information, as this effort was to be ade voluntarily. 7' re have already been a number of documents exchanged, and I have received a volumino s stack of documents relating to the previous hearing on this matter. I em not certain at his point wbat documents are being sought that have not already been exchange. If there are still documents outstanding, and if one or more of the parties is PO Box Columbus DH p4 PERS 02005