S.B. 106 - Tort Reform Memo

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Date: January 30, 2002

To: Members, House Local Government & Township Committee

From: John E. Gotherman, Counsel, Ohio Municipal League

Re: S.B. 106

I. As Counsel to the Ohio Municipal League, I was very much involved in the restoration of sovereign immunity in 1985. I participated in the drafting of the initial Chapter 2744 and its support throughout the legislative process. The initial enactment was necessary since the Ohio Supreme Court had abrogated the common law tort immunity of political subdivisions. The initial law sought to strike a fair balance between the liability of political subdivisions and the rights of individuals injured by governmental actions.

Governmental functions, such as police and fire are often fraught with danger to the employees of government and the persons who are the object of the governmental functions. Other governmental functions, like police and fire, are essential to an orderly society; examples being courts, legislative bodies, and governmental officials and employees that exercise discretion in establishing and carrying out the functions of government. Prior to Chapter 2744, Revised Code, the common law provided protection to a municipality with respect to governmental functions.

On the other hand, when municipal governments exercised business like functions, i.e. proprietary functions, the municipality was liable for the negligent acts of its representatives. Examples of a proprietary functions of a municipality are water and sewer utilities. Chapter 2744, Revised Code, with some modification, followed the common law which previously applied to municipalities. That is, immunity for governmental functions and liability for negligence with respect to proprietary functions.

II. Subsequent legislation modified Chapter 2744, Revised Code, including S.B. 350 (the Tort Immunity Act) effective 1/27/97. S.B. 350 was held, among other matters, to have multiple subjects in violation of the Ohio Constitution (Sec. 15(D) of Article II. Ohio Constitution) in State ex rel Ohio Academy of Trial Lawyers v. Sheward, 86 Ohio St. 3d 451 (1999) by the Ohio Supreme Court.

From a municipal point of view our interest is to restore the changes that were made in S.B. 350 and invalidated in the Sheward case.

S.B. 106 would make the following changes that are of interest to municipalities:

S.B. 106 Re-enacts S.B. 350 provisions that clarify the provision of R.C. 2744.02 (B) (4) that relate only to liability that attaches due to negligent defects in the premises and not other alleged negligent conduct that may occur in public buildings or on public grounds. The representatives of plaintiff trial lawyers oppose this amendment. They argue the current law makes negligent conduct in a municipal building or on a municipal ground actionable even though it is a governmental function and immunity would be appropriate under the law. The trial lawyers argument would preempt the immunity granted for governmental functions or other immunities, and possibly defenses, if the conduct occurred in a municipal building or on municipal grounds. This was clearly not the intent when the tort immunity law was enacted in 1985. The original intent that is now proposed to be clarified was to treat slip and fall cases the same whether the defect was in a step at the water plant (a proprietary function) or at the police station ( a governmental function).

The Revised Code often uses the world Ashall@ when stating responsibilities and duties of officials. S.B. 350 and now S.B. 106 would not impose civil liability in those instances where a mandatory duty is imposed unless civil liability is expressly imposed by the statute.

Section 723.01, Revised Code, is revised (as it was in S.B. 350) to clearly indicate that Division (A) and (B) (3), of R.C. 2744.02 controls the liability or immunity of a municipal corporation.

S.B. 106 restores S.B. 350 provisions that the definition of a Apublic road@ excludes berms, shoulders, right-of-ways, and certain traffic control devices; thereby reducing the risk of liability to political sub-divisions.

S. B. 106 allows interlockatory appeals with respect to a court order that denies a political sub-division or employee thereof, the benefit of an alleged immunity from liability by designation of such orders as Afinal orders@. (Restores provision of S.B. 350).

An amendment to the current law would modify R.C. 2744.07 and require that the public employer indemnify its employees if the act or commission occurred (as opposed to Aalleged to have occurred@ while the employee was acting both in good faith and not manifestly outside the scope of employment or official responsibilities.

This memorandum outlines the major provisions of S.B. 106 that are of interest to municipalities.