Update: On December 7, 2018, the Supreme Court of Ohio handed down a merit decision in this case.  Read the analysis here.

Read the analysis of the oral argument here.

On August 1, 2018, the Supreme Court of Ohio will hear oral argument in the case Ann Wayt v. DHSC, LLC, 2017-1548. At issue in the case is whether R.C. 2315.18 effectively caps recoverable non-economic compensatory damages in defamation actions.

Case Background

In 1987, Ann Wayt (“Wayt”) began her employment as a nurse at DHSC, LLC, which does business as Affinity Medical Center (“Affinity”). Her employment evaluations had always been excellent. In 2012, Wayt, along with several other nurses, began a campaign to unionize the nurses at Affinity. Wayt was viewed by some as the leader of the unionization effort. Ultimately, the effort to unionize was successful, although the issue of unionization was divisive at the hospital. Almost immediately after the unionization went into effect, Wayt was accused of misconduct and falsifying hospital records to reflect patient care she did not administer. The hospital conducted an investigation and proceeded to suspend Wayt for falsification of hospital documents. During the subsequent investigation, Wayt’s supervisors recommended that she be terminated.

After Wayt’s termination, Affinity’s Chief Nursing Officer sent a complaint about Wayt to the Ohio Board of Nursing (“OBN”) so that the OBN could decide whether to suspend or revoke Wayt’s nursing license. Affinity supplied the OBN with allegedly selective pieces of information and allegedly left out documents supporting Wayt’s performance. As a result, Wayt had little success in her subsequent job search. Wayt applied to fifty-seven openings, received an interview from two of them, and was not hired.

The National Nurses Organization Committee filed a charge with the National Labor Relations Board (“NLRB”) alleging Affinity engaged in unfair labor practices in terminating Wayt. The NLRB found for Wayt. The NLRB’s ruling was affirmed by the U.S. District Court for the Northern District of Ohio. Affinity was ordered to reinstate Wayt in her previous job with the same pay and benefits. After returning to work at Affinity, Wayt filed a civil complaint against Affinity for, in part, defamation of her character. Claims other than defamation were later dismissed.  The punitive damages portion of the trial was bifurcated. The jury found for Wayt on her defamation claim, and awarded her $800,000 in noneconomic compensatory damages and $750,000 in punitive damages. Affinity moved that the damages be limited to $250,000 and $500,000 respectively in accordance with the damages caps set forth in R.C. 2315.18 and R.C. 2315.21. Stark County Court of Common Pleas Judge Taryn Health overruled Affinity’s motion and found that R.C. 2315.18 does not apply to defamation claims.

On appeal, the Fifth District, in a unanimous opinion written by Judge Delaney, joined by Judges Gwin and Wise, affirmed the decision of the lower court. The Fifth District found that the trial court had not erred nor abused its discretion in ruling for Wayt. Affinity now appeals the ruling of the Fifth District.

Votes to Accept the Case

Yes: Chief Justice O’Connor, and Justices DeWine, O’Donnell, and Kennedy

No: Justices Fischer, French, and DeGenaro

Key Statutes and Precedent

Ohio Constitution Article I, Section 16 (All courts shall be open, and every person, for an injury done him in his land, goods, person, or reputation shall have remedy by due course of law . . .)

R.C. 1.49 (If a statute is ambiguous, the courts may consider the purpose of the statute, the circumstances of its enactment, legislative history, common law, consequences of a particular construction, the administrative construction of the statute, or other relevant issues in order to clarify its meaning.)

R.C. 2315.18 (Compensatory Damages in Tort Actions)

(A)(4) “Noneconomic loss” is categorized as any nonpecuniary harm to a person or property. Statute lists specific types of recoverable damages.

(A)(7) “Tort action” means a civil action for damages for injury or loss to person or property. “Tort action” includes a civil action upon a product liability claim or an asbestos claim. “Tort action” does not include a civil action upon a medical claim, dental claim, optometric claim, or chiropractic claim or a civil action for damages for a breach of contract or another agreement between persons.)

(B)(2) (specifies caps to be applied in tort actions for compensatory noneconomic damages.)

R.C. 2315.21 (Punitive or Exemplary Damages)

(D)(2)(a) Punitive damages shall not be awarded in excess of two times the compensatory damages awarded to the plaintiff.)

Smith v. Buck, 119 Ohio St. 101 (1928) (The term “injury to person” is commonly used and generally afforded its common usage which extends to reputational injuries unless additional language is present to indicate otherwise.)

Lawyer’s Coop. Pub. Co. v. Muething, 65 Ohio St.3d 273 (1992) (In a negligence suit, injury to reputation was found to be a personal injury in tort.)

Arbino v. Johnson & Johnson, 2007-Ohio-6948 (Ohio’s statutory scheme concerning caps on compensatory and punitive damages—R.C. 2315.18 and 2315.21—are facially constitutional.)

Simpkins v. Grace Brethren Church of Del. Ohio, 2016-Ohio-8118 (When lawfully and reasonably enacted, statutory damage caps do not violate the constitutional rights of plaintiffs even though such caps may limit the remedy plaintiffs receive.)

Affinity’s Argument

The language of R.C. 2315.18 is clear and unambiguous in its intent to include all relevant tort actions broadly under its umbrella of damage recovery limitation. Defamation is certainly within the scope of R.C. 2315.18. Prior decisions by this Court have explicitly listed the torts to which R.C. 2315.18’s cap on damage recovery does not apply; defamation was not one of them. This understanding of defamation is consistent with prior readings and understandings of defamation law in Ohio.

Despite R.C. 2315.18’s clear language, the lower courts erroneously concluded that the statute is inapplicable to defamation claims. Only certain claims are expressly excluded from the statutory cap provisions of R.C. 2315.18, and defamation is not one of them. Excluded are medical, dental, optometric, chiropractic, and breach of contract claims. The tort of defamation must be included by any reasonable reading of the statute.

The lower courts also concluded that there were separable instances of defamation in this case which make statutory caps inapplicable. However, Wayt never raised this issue below. In fact, Wayt argued that the instances of defamation taken together caused her injury. Therefore, Wayt ought to be estopped from relying on this argument before this Court. Since the record supports only one indivisible injury, the statutory cap applies.

Even if R.C. 2315.18 is ambiguous, the canons of statutory construction show that the statutory damages cap applies to a tort actions asserting defamation. The simplest way to reach this conclusion is by applying the maxim “the expression of one thing is the exclusion of another.” This means that if any legislature expressed one exception to the general rule then other exceptions are excluded. In this case, the General Assembly began with the broad proposition that R.C. 2315.18 applies to all tort claims. Subsequently, the General Assembly excluded certain claims which might have been included under that provision. Defamation was not an excluded tort. This exclusion must be understood as purposeful. This basis alone should be sufficient for this Court to find that R.C. 2315.18 applies to defamation claims. Other factors also support the conclusion that R.C. 2315.18 applies to defamation including legislative history and prior decisions of this Court.

Finally, Wayt’s punitive damages must be reduced. R.C. 2315.21(D) requires that punitive damages not exceed two times the amount of compensatory damages. As shown, Wayt’s compensatory damages should have been capped at the statutory limit of $250,000. Therefore, Wayt’s punitive damages should be capped at $500,000.

Wayt’s Argument

R.C. 2315.18 has no application to defamation suits nor to this case in particular. The General Assembly made clear that its intent in passing R.C. 2315.18 was to ensure that Ohio had a fair and predictable system which preserves the rights of those injured by negligent behavior. No part of this case deals with negligence. Affinity’s actions were intentional, fraudulent, and malicious. If Affinity’s proposition were adopted it would require capping damages in civil tort actions for such things as murder and aggravated assault. The Court should decline to adopt such an expansive reading of the statute.

Furthermore, the Ohio Constitution provides that all persons shall have remedy under the law for damage done to their person, land, goods, or reputation. The Ohio Constitution recognizes that damage to reputation is distinct from damage done to a person or other category listed. Following this understanding of distinctiveness, R.C. 2315.18’s statutory damages cap only applies to injuries to “person or property.” Because defamation is a tort dealing with damage to reputation, the statute does not apply to defamation claims.

The damages Wayt suffered are not necessarily “non-economic” in nature. The General Assembly never specifically included damage to reputation as noneconomic. Furthermore, there was no request for damages to be broken into categories by the jury. This Court could, therefore, find that the jury’s compensatory damage award was for economic loss, which would eliminate all question of statutory caps—there are no caps on economic compensatory damages.

Finally, Ohio’s damage cap statute is different from other jurisdictions relied on by Affinity. Those jurisdictions (e.g. Colorado, Texas, and Wisconsin) have broad damage capping statutes which cap damages sought for any civil action, which includes defamation. By contrast, Ohio only imposes statutory caps for injuries to persons or property, and not reputation. Therefore, the jury’s verdict and the ruling of the Fifth District, should be upheld.

Affinity’s Proposed Proposition of Law

R.C. 2318.15’s statutory caps broadly apply to tort actions seeking noneconomic loss as a result of an alleged injury or loss to person or property, which necessarily captures the tort of defamation.

Amici in Support of Wayt

The Ohio Employment Lawyers Association (OELA) filed a brief in support of Wayt. OELA emphasized that defamation is different from the general category of personal injury torts, with its own statutory treatment. Therefore, the damages in such an action should not be subject to a cap because no additional redress is possible as it might be with other tort injuries. Other evidence, including statutory language and the Ohio Constitution, supports the proposition that defamation should be treated differently from other tort injuries because of the nature of reputational injury.

The Ohio Association for Justice (OAJ) filed a brief in support of Wayt. OAJ asserts that the jury award should be upheld for three primary reasons. First, the statute applies only to civil actions for damages to persons or property and not reputation. Second, this case involved intentional misconduct and R.C. 2315.18 was only intended to cap damages for negligent conduct. Third, the statutory language makes clear that damage caps only apply to bodily injuries. None of the injury discussed during trial was bodily in nature. Finally, the punitive damages award of $750,000 should remain untouched, as punitive damages are only capped at two times the amount of uncapped compensatory damages.

Student Contributor: Paul Taske