Court News Ohio
Court News Ohio
Court News Ohio

Wednesday Aug. 5, 2020

Robert Wilson et al. v. Abubakar Atiq Durrani M.D. et al, Case No 2019-1560
First District Court of Appeals (Hamilton County)

In re R.B., Case No. 2019-1325
First District Court of Appeals (Hamilton County)

State of Ohio v. Shaun E. Dowdy, Case No. 2019-1430
Eighth District Court of Appeals (Cuyahoga County)

John J. Reister, receiver on behalf of Certified Steel Stud Association Inc. v. William A. Gardner and Edward R. Slish, Case No. 2019-1815
Twelfth District Court of Appeals (Butler County)


Can Time to Refile Medical Malpractice Lawsuit Extend beyond Four Years?

Robert Wilson et al. v. Abubakar Atiq Durrani M.D. et al, Case No 2019-1560
First District Court of Appeals (Hamilton County)

ISSUE: May a medical malpractice lawsuit be filed after the state’s four-year time limit without citing an exception in the statute of repose, R.C. 2305.113(C)?

OVERVIEW:
This case arises in the aftermath of a failed effort by a Hamilton County Common Pleas Court judge to consolidate and hear hundreds of medical malpractice lawsuits filed against Dr. Abubaker Atiq Durrani. Durrani is a surgeon who was indicted on federal charges related to billing for unnecessary medical treatment. He fled to his native Pakistan in 2013 to avoid prosecution.

Hundreds of his former patients initiated lawsuits in Hamilton and Butler County common pleas courts against him and the local hospitals where he practiced. Others filed lawsuits in federal district court. The patients in Butler County and the federal court agreed to refile their cases in Hamilton County Common Pleas Court.

The medical providers then asked the Ohio Supreme Court to prevent Judge Robert Ruehlman from consolidating the cases. The Court ruled Judge Ruehlman did not follow state or local rules when he unilaterally transferred cases, and the Court ordered the judge to transfer the cases that weren’t assigned to him back to the judges to whom they were originally assigned. (See Court Blocks Hamilton County Judge from Consolidating Hundreds of Malpractice Cases.)

Judges in some of those cases then ruled the delay caused by moving the cases from Butler County to Hamilton County violated the four-year “statute of repose” in Ohio law and dismissed the cases. The question of whether those cases can be legally refiled has drawn statewide attention from the medical industry and personal-injury lawyers. Among the organizations submitting amicus curiae briefs in this case are the Ohio Hospital Association, Ohio State Medical Association, and the Ohio Osteopathic Association on behalf of the health care providers, and the Ohio Association of Justice in support of patients allegedly injured by unnecessary surgeries.

BACKGROUND:
Approximately 500 medical malpractice case have been filed against Durrani, his former practice, and the hospital networks where the surgeries were performed. Durrani performed surgery on Mike Sand at West Chester Hospital, a branch of Cincinnati-based UC Health, in April 2010. In March 2013, Sand sued Durrani and the hospitals in Butler County Common Pleas Court.

Durrani performed two surgeries on Robert Wilson in February and April 2011 at the West Chester Hospital. Wilson also filed suit in Butler County against the doctor and the hospital system in April 2013.

Sand and Wilson weren’t the first to sue Durrani and the providers in Butler County. In 2014 and 2015, four of the first jury trials in Butler County resulted in verdicts for the health care providers. Soon after, Wilson, Sand, and many others voluntarily dismissed their cases in Butler County and refiled the cases in Hamilton County. There, attorneys for injured patients sought to have all the Durrani cases heard by Judge Ruehlman.

After the cases were severed, Durrani and his practice, the Center for Advanced Spine Technologies, asked the trial court to dismiss Wilson’s and Sand’s cases because they were filed after the four-year statute of repose in R.C. 2305.113(C) had passed. The trial court agreed, and the men appealed their cases to the First District Court of Appeals. The First District ruled that Ohio’s “reversal savings statute ,” R.C. 2305.19, applied to medical claims and gave the men one more year to file their lawsuits.

The providers appealed the decision the Supreme Court, which agreed to hear the case. Because of the coronavirus pandemic, the Court will hear the appeal by videoconference.

Lawsuit Barred by Time Limit, Medical Providers Assert
The medical providers note that R.C. 2305.113(C) is a “true statute of repose,” pointing to the Court’s 2016 Antoon v. Cleveland Clinic Found. decision. The providers explain statutes of limitations and statutes of repose are both time restraints for filing lawsuits, but have distinct applications.

The providers explain the differences, stating that a statute of limitations is “plaintiff-focused” and requires the plaintiff to file within a certain time period after the plaintiff “knew or should have known” about the injury. There are several exceptions to the time limits, and provisions to toll, or extend the time, to file a case. A statute of repose is “defendant-focused” and affords a defendant, such as a medical provider, a certain time limit, which if passed, frees the defendant from “threat of liability.” A statute of repose is generally a hard time limit that cannot be extended by tolling unless the law expressly allows for it, the providers maintain.

Ohio’s medical statute of repose has three express exceptions that allow the four-year limit to be exceeded by injured patients. If the patient is a minor, or has a mental disability, the time limit doesn’t apply. The time limit also doesn’t apply to a claim that a foreign object was left in a person’s body. That person has one year after the discovery of the object to file a lawsuit.

The providers note there is a fourth way under the law to extend the four-year time period. If the patient is only able to discover the injury in the fourth year after the procedure was performed, the law gives the patient one more year to file a case.

Those are the only exceptions that allow a suit to be filed after four years, the providers assert. Sand and Wilson filed their lawsuits in Butler County within the four-year period. But after they withdrew the cases and refiled in Hamilton County, it had been more than four years after their surgeries. The First District, however, allowed the cases to proceed, finding the “savings statute” allowed for the refiling because the original lawsuits were “commenced” within the four-year time frame.

The providers argue that only the exceptions articulated in R.C. 2305.113 apply, and the savings statute isn’t one of them. The providers note that in the statute of repose for product liability lawsuits, state lawmakers expressly indicated the savings statutes is one of the exceptions that can be used to extend a time limit for filing a case. Because the medical malpractice law expressly states which exceptions apply, lawmakers have made clear that they intentionally excluded the use of other exceptions, the providers assert.

Medical Malpractice Lawsuit Time Limits
Ohio’s time limit imposed on medical malpractice lawsuits is outlined in the medical “statute of repose.” R.C. 2305.113(C) states:

“Except as to persons within the age of minority or of unsound mind as provided by section 2305.16 of the Revised Code, and except as provided in division (D) of this section, both of the following apply:

(1) No action upon a medical, dental, optometric, or chiropractic claim shall be commenced more than four years after the occurrence of the act or omission constituting the alleged basis of the medical, dental, optometric, or chiropractic claim.

(2) If an action upon a medical, dental, optometric, or chiropractic claim is not commenced within four years after the occurrence of the act or omission constituting the alleged basis of the medical, dental, optometric, or chiropractic claim, then, any action upon that claim is barred.”

Medical Malpractice Lawsuit Time Limits
Ohio’s time limit imposed on medical malpractice lawsuits is outlined in the medical “statute of repose.” R.C. 2305.113(C) states:

“Except as to persons within the age of minority or of unsound mind as provided by section 2305.16 of the Revised Code, and except as provided in division (D) of this section, both of the following apply:

(1) No action upon a medical, dental, optometric, or chiropractic claim shall be commenced more than four years after the occurrence of the act or omission constituting the alleged basis of the medical, dental, optometric, or chiropractic claim.

(2) If an action upon a medical, dental, optometric, or chiropractic claim is not commenced within four years after the occurrence of the act or omission constituting the alleged basis of the medical, dental, optometric, or chiropractic claim, then, any action upon that claim is barred.”

Exclusion Not Applicable, Patients Assert
The patients maintain the First District examined the Antoon case, and note the Court stopped short of ruling on whether the savings statute applied to the medical statute of repose. The men note the First District relied on a U.S. Sixth Circuit Court of Appeals decision regarding another Durrani victim lawsuit, in which the federal appeals court analyzed the Antoon decision. The Sixth Circuit ruled in its 2018 Atwood v. UC Health that the savings statute most likely applied to the statute of repose, and if a patient filed a lawsuit within the four-year limit, then the patient could withdraw and refile the case within a year.

The patients maintain the First District found a way to “harmonize” the two laws so that they still bar patients from attempting to sue providers if they hadn’t attempted to do so in the four years after their last procedures. However, those who had initially sued within the time limit, but were delayed by having to refile[, can continue with their cases, they assert.

The patients maintain the saving statute doesn’t violate the policy goals of the statute of repose, which is supposed to provide certainty to medical providers that old cases won’t come back to haunt them. The men note this isn’t the case here because the lawsuit is of no surprise to the providers. The doctor and hospitals have already been sued and know about the case, and have the information needed to defend themselves, the patients argue.

The patients also note the reasoning of the federal court, which examined both the savings statute and the statute of repose. The federal court in Atwood noted the provision of the savings statute also includes exceptions and lists the instances in which lawmakers expressly stated it doesn’t apply. The statute of repose isn’t on that list, and the appeals court ruled the argument that if an exception isn’t listed, it doesn’t apply “cuts both ways.” The patients argue that when the laws are read in context, the savings statute can apply to the statute of repose.

Additional Friend-of-the- Court Briefs Submitted

Others filing amicus briefs are Academy of Medicine of Cleveland & Northern Ohio in support of the medical providers, and Cleveland Academy of Trial Attorneys in support of the patients.

Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing Abubakar Atiq Durrani et al.: Aaron Herzig, 513.381.2838

Representing Robert Wilson et al.: Robert Winter, 859.250.3337

Return to top

When Must Hearing to Review Juvenile Sex-Offender Classification Take Place?

In re R.B., Case No. 2019-1325
First District Court of Appeals (Hamilton County)

ISSUES:

Appeal –

  • Did the juvenile court still have jurisdiction to review the classification of the juvenile offender when it held the hearing “upon completion of disposition”?

Cross-appeal –

  • To ensure fundamental fairness and due process, must a juvenile court conduct the hearing reviewing a juvenile’s completion of a disposition at the time the child finishes treatment?

BACKGROUND:
In October 2011, the Hamilton County Juvenile Court found a youth identified as R.B. delinquent on two counts of what would be gross sexual imposition if committed as an adult. R.B. was 14 years old at the time of his offenses.

At R.B.’s disposition hearing, the juvenile court committed him to the custody of the Department of Youth Services until age 21, but suspended the commitment and placed him on probation. He was ordered to complete a residential treatment program as part of his probation. The court classified him as a Tier I juvenile sex offender, and he and his mother signed a document explaining his duty to register as a juvenile sex offender every year until 2022.

In February 2013, a juvenile court magistrate terminated R.B.’s placement in the treatment program, kept the probation order in place while R.B. completed outpatient treatment, and placed him on electronic monitoring for a month. On July 29, 2013, the juvenile court judge put R.B. on “non-reporting probation with Monitored Time.”

Hearing ‘upon Completion of Disposition’ Scheduled
In October 2014, the magistrate scheduled the “completion-of-disposition hearing,” as required by R.C. 2152.84, for Nov. 19, 2014. The hearing was delayed multiple times until May 2017. Between the originally scheduled date and the actual hearing, R.B. pled no contest as an adult for failing to register as a sex offender based on his juvenile offenses. He pursued appeals of this conviction.

Following the 2017 completion-of-disposition hearing, the magistrate ordered that R.B. remain classified as a Tier 1 juvenile sex offender. The magistrate’s decision was issued about a week before R.B.’s 21st birthday, which was on July 20. R.B. objected to the ongoing classification, but the juvenile court judge approved the magistrate’s decision in October 2017.

R.B. appealed to the First District Court of Appeals. The First District stated that the youth’s disposition had been a suspended commitment to youth services until age 21. Because the juvenile court didn’t finish the completion-of-disposition process before R.B.’s 21st birthday, the court no longer had jurisdiction in October 2017 to order R.B.’s continued Tier 1 classification.

The Hamilton County prosecutor appealed to the Ohio Supreme Court, which accepted the case, as well as a cross-appeal from R.B. The Court will hear arguments in the cases by videoconference because of the COVID-19 pandemic.

State Maintains Timing of Hearing Isn’t Explicit in Laws
The Hamilton County Prosecutor’s Office notes that state law explicitly allows juvenile sex-offender classification orders to remain in place after a child turns 18 or 21. First, a juvenile court imposes an initial sex-offender classification under R.C. 2152.83. Then the court, under R.C. 2152.84, must conduct a mandatory review of the youth’s initial classification “upon completion of disposition.” The court at that time may continue, modify, or terminate the classification. 

The prosecutor points out that “upon completion of disposition” isn’t defined in the statutes. The Ohio Supreme Court has explained that certain statutes are mandatory, while other statutes in which compliance is a matter of convenience rather than substance are directory. The prosecutor’s brief maintains that the timing of the mandatory review hearing “upon completion of disposition” is directory, not a “compulsory expiration clause.” The brief argues the hearing is meant to occur “around the time the juvenile has finished the disposition.”

The juvenile court’s 2017 completion-of-disposition hearing took place appropriately – during the time R.B. was still under the court’s 2013 probation sanction of “non-reporting probation with monitored time,” the prosecutor contends. R.B. was an adult when his completion-of-disposition hearing occurred, but the relevance of the sanction didn’t depend on R.B.’s age, the office states.

The prosecutor maintains that state law doesn’t strip the juvenile court’s jurisdiction if the mandatory review hearing isn’t held as described in the statutes because the language is directory only.

“Given the plethora of juvenile dispositions available to be imposed upon juveniles throughout the state, the timing of the ‘upon completion of disposition’ review hearing can only be interpreted to be at such time that the juvenile court can reasonably give consideration to how the juvenile responded to all aspects of the imposed disposition and adequately assess future risk,” the brief concludes.

Youth Argues Hearing Occurred Years after Probation Ended and after He Was 21
R.B.’s brief explains that certain sex-offender classifications for juveniles, such as his, are temporary. A classification remains in place only if the court determines at the mandatory completion-of-disposition hearing that the juvenile is likely to reoffend, the brief states.

Although state law extends a juvenile court’s jurisdiction past certain ages in some circumstances, the court must comply with the timing requirements in the law, R.B. contends. He maintains that once he turned 21, he no longer was under the juvenile court’s authority, and the court couldn’t issue a new classification order at the completion-of-disposition hearing. In addition, he argues, he had completed his disposition – all the steps the juvenile court required of him after he was found delinquent.

The prosecutor’s imprecise view of R.C. 2152.84’s timing is unworkable, gives little guidance to juvenile courts, causes uncertainty for juvenile offenders, doesn’t follow Court precedent, and contradicts the statute, R.B. states.

At the latest, he argues, his disposition ended on July 20, 2017, his 21st birthday. Yet the juvenile court’s order continuing his classification as a Tier 1 juvenile sex offender wasn’t journalized until October 30, 2017, three months after he turned 21.

He asserts, however, that the juvenile court’s jurisdiction actually ended much earlier – in July 2013. At that time, the juvenile court terminated his probation, he states. He maintains that he had completed the residential treatment program, was released from electronic monitoring, and finished each step the court had ordered. In his view, the completion-of-disposition hearing required by R.C. 2152.84 should have occurred that day. Instead, he maintains, the court held the hearing 46 months later. He argues that length of delay couldn’t have been the legislature’s intent when it mandated a hearing “upon completion of disposition.”

Youth Raises Constitutional Concerns Stemming from Delay
In his cross-appeal, R.B. disputes the prosecutor’s view that the law’s timing requirement is only for convenience and orderly procedure. Holding the mandatory review hearing at the time a juvenile completes the disposition ensures due process and fundamental fairness in the sex-offender classification scheme for juveniles, he states.

R.B. argues it violated due process and fundamental fairness to hold his hearing nearly four years after he had completed treatment. Certain health care providers wouldn’t testify because they hadn’t seen him in years, so the judge lacked useful evidence to consider, he states. He maintains that he lost the opportunity to be removed from the sex-offender registry and the delay impeded his rehabilitation.

“The purpose of R.C. 2152.84 is to remove barriers posed by registration for those who have been rehabilitated of these types of offenses,” his brief argues. “The juvenile’s right to this hearing and to restoration of their privacy and reputation cannot be thwarted by the juvenile court without consequences.”

State Counters Youth’s Disposition Wasn’t Complete until 2017
The prosecutor maintains that the delay until the completion-of-disposition hearing was largely due to R.B.’s continuances and motions.

The office also notes that the juvenile court is charged in R.C. 2152.84 with reviewing the effectiveness of the orders the court imposed on the juvenile, including treatment and risks of reoffending, before it continues, modifies, or removes the original sex-offender classification. Fundamental fairness doesn’t require the juvenile court to hold the completion-of-disposition hearing at the time treatment has ended, the prosecutor contends. A juvenile court better aligns with the intent of the statute by waiting to review the sex-offender classification until ascertaining what the youth has learned from treatment while under a more lenient supervision, such as R.B.’s non-reporting probation with monitored time.

Friend-of-the-Court Briefs Filed on Each Side
The Ohio Prosecuting Attorneys Association filed an amicus curiae brief supporting Cuyahoga County prosecutor’s position.

A joint amicus brief supporting R.B. was submitted by the following:

  • Catherine Carpenter, professor, Southwestern Law School
  • Children’s Law Center
  • Justice for Children Project
  • Juvenile Law Center
  • National Juvenile Defender Center
  • Ohio Public Defender’s Office

Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing the State of Ohio from the Hamilton County Prosecutor’s Office: Paula Adams, 513.946.3228

Representing R.B. from the Hamilton County Public Defender’s Office: Julie Kahrs Nessler, 513.946.8256

Return to top

Did Judge’s Shorthand Expression for Murder Sentence Invalidate Sentence?

State of Ohio v. Shaun E. Dowdy, Case No. 2019-1430
Eighth District Court of Appeals (Cuyahoga County)

ISSUE: Is a criminal sentence void if the sentence doesn’t precisely track the language of the sentence in the state statute?

BACKGROUND:
In 2009, Shaun Dowdy kidnapped three people and shot one of them to death. In 2010, he pleaded guilty to aggravated murder with a firearm specification and to kidnapping. The trial court stated that it was sentencing Dowdy to “20 years to life” for the aggravated murder, along with three years in prison for the firearm specification and 10 years for kidnapping, all to run consecutively for a total of 33 years to life.

Dowdy appealed his sentence to the Eighth District Court of Appeals, which remanded the case for a new sentence. Dowdy was again given the same 33-years-to-life sentence. He appealed again. In 2019, the Eighth District ruled the trial court’s imposition of a “20-years-to-life” sentence was void because Ohio law doesn’t grant indefinite “20-years-to-life” sentences for aggravated murder, but rather “life imprisonment with parole eligibility after serving 20 years of imprisonment.”

The Cuyahoga County Prosecutor appealed the decision, and the Supreme Court agreed to hear the case. Because of the coronavirus pandemic, the Court will hear the appeal by videoconference.

Sentences Are the Same and Legal, Prosecutor Maintains
The prosecutor asserts the Eighth District created a sense of unnecessary confusion and uncertainty with its 2019 State v. Smith ruling, and has applied the faulty logic in Dowdy’s case.

At issue is the wording of R.C. 2929.02 and the different ways the penalties for aggravated murder and murder are stated. The provision for murder imposes sentences beginning at “15 years to life” in prison, and describes them as an “indefinite term.” The penalties for aggravated murder are listed in R.C 2929.03 and articulate the sentences as “life imprisonment with parole eligibility after twenty years of imprisonment.”

The prosecutor notes the Eighth District found that R.C. 2929.03 doesn’t use the words “definite” or “indefinite” and concluded the aggravated murder terms are definite. The Eighth District ruled that Dowdy wasn’t given a sentence permitted for aggravated murder, and his sentence is void. The prosecutor argues that both terms are the same, and both sentences are indefinite. The prosecutor asserts the law doesn’t require the trial court’s sentencing language to track the wording of the statute exactly and the judge’s shorthand expression of 20 years to life is the same as life imprisonment with parole eligibility after 20 years.

The prosecutor argues the sentence isn’t void, and by declaring it void, the appeals court forces a costly third sentencing of Dowdy that also needlessly puts the victims and their families through the pain of another hearing.

Sentences Meaningfully Different, Offender Argues
Dowdy raises and answers the question: “What difference does it make?” He writes an indefinite term of 20 years to life means the starting point of the end of his sentence is in 20 years. Then the Ohio Adult Parole Authority determines if he should spend more time in prison, up to life, he states. The prison term for aggravated murder is a definite term of life in prison. The sentence then allows the parole board to consider reducing the sentence to 20 years, he explains.

Dowdy maintains the General Assembly intentionally wrote the provisions to be different, with different responsibilities for the parole board. The courts aren’t free to alter the sentencing choices of the legislature and must follow them. Because the trial court failed to impose the correct sentence for him, his sentence is void, Dowdy concludes.

Friend-of-Court Brief Submitted
An amicus curiae brief supporting the prosecutor’s position has been submitted by the Ohio Attorney General’s Office.

Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing the State of Ohio from the Cuyahoga County Prosecutor’s Office: Katherine Mullin, 216.698.6454

Representing Shaun E. Dowdy from the Cuyahoga County Public Defender’s Office: John Martin, 216.443.7583

Return to top

Are Directors Liable for Decision Leading to $43 Million Verdict against Trade Association?

John J. Reister, receiver on behalf of Certified Steel Stud Association Inc. v. William A. Gardner and Edward R. Slish, Case No. 2019-1815
Twelfth District Court of Appeals (Butler County)

ISSUES: Does the “litigation privilege” bar a lawsuit against corporate directors for breach of fiduciary duties based on the actions the directors took during litigation against the corporation?

BACKGROUND:
ClarkWestern Dietrich Building Systems (ClarkDietrich) is an Ohio-based manufacturer of steel studs, which are used in the internal walls of most modern multistory structures and other commercial buildings. The Certified Steel Stud Association (CSSA) is a trade organization made up of four large competitors of ClarkDietrich in the steel stud industry. The CSSA was founded by three corporations, whose chief executive officers served as the organization’s board of directors.

In 2013, the CSSA and one steel stud corporation published a series of articles about ClarkDietrich’s products that the company claims were false, disparaging, and defamatory. ClarkDietrich stated the articles were sent to about 9,500 customers who purchase steel studs for commercial construction, and as a result of the articles, it lost millions of dollars in sales.

ClarkDietrich filed two lawsuits in Butler County Common Pleas Court. One alleged defamation and disparagement and other tort claims by the CSSA and the member companies. A second lawsuit alleged the member companies and the CSSA committed antitrust violations. After the lawsuit was filed, a fourth company joined the CSSA and was included in the case.

Directors Reject Settlement
An 11-week jury trial began in September 2015. As the trial proceeded, the member companies each settled their lawsuits with ClarkDietrich. On the eve of closing arguments, ClarkDietrich offered to dismiss the case with prejudice against the CSSA. The association directors discussed the offer. The directors maintained the heart of the dispute was the CSSA’s claims that ClarkDietrich’s products weren’t certified for use by the International Building Code. ClarkDietrich offered to dismiss the suit if the CSSA would drop the claim that the products weren’t certified.

While the businesses themselves all settled their claims, the directors refused the settlement offer from ClarkDietrich in hopes that the CSSA would prevail before a jury. The jury returned a $49 million judgment against the association and member companies, and the jury attributed$43 million to the CSSA’s acts. ClarkDietrich noted the trade association had no assets and would be unable to pay a judgment. The company asked the trial court to appoint a receiver to investigate whether judgment funds could be sought from the CSSA member companies. The court appointed John Reister as the receiver.

Reister determined the CSSA, which itself would not sue its board members, had a justifiable claim of breach of fiduciary duty against the board of directors. Reister maintained the directors gambled away the fate of the CSSA after having protected their own companies from further liability by settling with ClarkDietrich. Reister filed the breach of fiduciary duty claims, and two of the directors settled, which provided some funds to ClarkDietrich. William Gardner and Edward Slish, the CEOs of the other CSSA companies, refused to settle and claimed their actions were protected from civil lawsuits by the “litigation privilege.”

The trial court dismissed the case, finding the litigation privilege shielded Gardner and Slish from liability. Reister appealed to the Twelfth District Court of Appeals, which in a 2-1 decision, affirmed the trial court.

Reister appealed to the Supreme Court, which agreed to hear the case. Because the intent of Reister’s lawsuit is for the benefit of ClarkDietrich, the company was added as an appellant in the case. The CSSA was also named as a party to case, but didn’t submit a brief and will not participate in oral argument. Because of the coronavirus pandemic, the Court will hear the appeal by videoconference.

Privilege Limited to Defamation Claims, Receiver Argues
Reister and ClarkDietrich filed separate briefs, making similar arguments on behalf of the company. The company claims that the litigation privilege provides absolute immunity in support of the truth-seeking functions of judicial proceedings. It is a privilege that shields parties, attorneys, and witnesses during litigation so they can freely testify, offer evidence , and communicate during judicial proceedings without fear of being sued for what they have communicated. The privilege is designed to protect litigation participants from defamation lawsuits based on what a person testifies to or conveys in the course of litigation, the company asserts.

The company notes the Twelfth District relied on a “modern view” of the privilege that expands its coverage to lawsuits based on activity “reasonably related” to the litigation.  But, the company notes, those reasonably related actions still must have to do with what is being “communicated” during litigation, and doesn’t broadly cover every type of action a party takes regarding litigation. The company asserts that if the privilege was so broad, there would never be a viable legal malpractice claim because the attorney could argue every decision made during litigation, correctly or incorrectly, was privileged. 

The company argues that breach of fiduciary duty is one of the few tools a corporation has available to holds its directors accountable for negligent and bad faith decisions. The CSSA had no protection from the acts of the directors, who sacrificed the organization’s existence on a gamble of winning a trial, the company argues. Even a win might not have been in the CSSA’s best interest because the decision could be appealed, the company notes. The best interest of the CSSA would have been to accept the dismissal of the case with no costs to the association, the company argues. The directors breached their responsibility to organization by not accepting the offer, the company states. That decision is not a communication, but a strategy that isn’t covered by the litigation privilege, the company concludes.

Action Was Appropriate and Protected, CEOs Argue
Gardner and Slish both submitted separate briefs making similar arguments. The directors charge that ClarkDietrich lost confidence in its case and came to the directors at the last minute to avoid a jury verdict in favor of the CSSA. The directors maintain they considered several factors. By accepting dismissal, the key question of whether CSSA defamed ClarkDietrich would go unanswered, they explain. The directors state they believe the company’s product do not meet the international code standards, and it was fair for the CSSA to stand by its position that the products aren’t certified. Additionally, they note, ending the case without a verdict would leave questions unanswered regarding the second antitrust lawsuit ClarkDietrich filed that it wasn’t willing to dismiss.

The directors argue their actions were directly related to the litigation and to the fact-finding process. Because those decisions were related, the directors were entitled to the litigation privilege, which barred the breach of fiduciary lawsuit, they conclude.

Friend-of-Court Brief Submitted
An amicus curiae brief supporting the directors’ position has been submitted by the Ohio Chamber of Commerce.

Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing John J. Reister, receiver on behalf of Certified Steel Stud Association Inc.: James Helmer, 513.421.2400

Representing ClarkWestern Dietrich Building Systems LLC doing business as ClarkDietrich: Matthew Blickensderfer, 513.651.6162

Representing William A. Gardner: Daniel Warncke, 513.381.2838

Representing Edward A. Slish: Justin Burns, 614.628.6963

Return to top