Federal Court Can't Hear a 'balyint' Type Claim

Refusal To Pay Workers Comp Arises Under

By Sonny N. Shetht An employer could not remove an employees workers compensation claim which alleged a refusal to pay benefits to federal court, the U.S. District Court for the Northern District of Ohio recently ruled in a case of apparent first impression.

The employer argued that the employees claim did not arise under the Ohio workers compensation laws because it was funded on common law and has not been codified.

But the District Court disagreed, remanding the case back to state court.

Because the wrongful action alleged in a Balyint claim is the intentional and wrongful termination of workers compensation payments themselves, and is not a retaliatory discharge, demotion, or some other discrete activity in the workplace, a Balyint claim must be construed as one that arises under Ohios workers compensation laws, regardless of whether a retaliatory discharge claim would be so construed, Judge Kathleen McDonald O'Malley wrote.

The 8-page decision is Hines v. Marriott International, Inc., Lawyers Weekly No. 002-100-03.

First Impression

Cleveland attorney W. Craig Bashein, who represents the plaintiff, told Lawyers Weekly the decision is significant for practitioners.

Regarding any additional or any other Balyint actions brought in the Northern District of Ohio, there's now a very good argument that those cases cannot be removed to federal court, Bashein said. This is certainly a case of first impression, at least in the Northern District, and I think its a case, based upon its reasoning, that would be followed throughout the district.

Bashein further added that by way of this decision, not only are Balyint actions in the future subject to the confines of state court and not subject to removal, but also, clearly this case stands for the proposition that retaliatory discharge claims would also be appropriately kept in state court and not subject to removal.

Counsel for the defendant could not be reached for comment before deadline.

Hurt On The Job

Plaintiff Barbara Hines, a citizen of Ohio, was injured while working for defendant Marriott International, Inc., a citizen of Delaware and Maryland. After plaintiff filed a claim with the Ohio Bureau of Workers Compensation (OBWC), the defendant paid the plaintiff temporary, total disability benefits for roughly two years before ending all payments. The defendant was a self-insured employer for purposes of workers compensation.

As a result, the plaintiff filed a motion for an emergency hearing with the OBWC challenging the termination of benefits. The hearing officer ruled in favor of the plaintiff, and ordered the defendant to continue making payments. Abiding by the order, the defendant resumed paying temporary disability benefits to the plaintiff, but this only lasted for two months before the defendant again refused to make payments.

The plaintiff eventually filed a claim with the Ohio Court of Common Pleas, alleging intentional and wrongful termination of workers compensation payments to an injured employee. Such a claim is otherwise known as a Balyint claim a claim rooted in tort for the intentional and wrongful termination of workers compensation benefits to injured employees.

Based on diversity of citizenship, however, the defendant removed the case to the U.S. District Court for the Northern District of Ohio.

Arising Under

O'Malley began her analysis of whether the federal court had jurisdiction over the plaintiffs claim by addressing the split in authority surrounding the issue.

Under 28 U.S.C. 1332, the federal court has authority to exercise diversity jurisdiction. But O'Malley noted that a civil action in any State court arising under the workmen's compensation laws of such State may not be removed to any district court of the United States, according to 1445(c).

The critical question for O'Malley thus came whether the plaintiffs claim arises under the workmen's compensation laws such that it cannot be removed.

The Sixth Circuit, however, did not provide O'Malley with much guidance.

In sum, existing Sixth Circuit case law does not make clear which side of the split in authority this Court should follow, O'Malley explained.

Looking outside the Sixth Circuit, O'Malley cited a case in which the court held causes of action that are statutorily created are generally held to arise under for purposes of 1445(c), but for those that have been judicially created removal is proper.

But a district court in Tennessee, rejected the distinction between statutorily and judicially-created remedies for retaliation connected with seeking workers compensation benefits, O'Malley noted.

O'Malley then observed that in most of the cases that examine whether a common law claim arises under workers compensation laws, the claim asserted is one for retaliatory discharge, or in other words, the plaintiff alleges she was terminated in retaliation for having filed a claim for workers compensation benefits.

She further added that, in this type of claim, the retaliatory activity has a nexus to is instigated by the workers compensation claim, but the retaliatory activity does not directly involve workers compensation benefits.

However, as O'Malley pointed out, in this case, the refusal to pay workers compensation benefits does not merely have a nexus to the claim, it is the claim.

As such, [the plaintiffs] claim is not simply related to Ohios workmen's compensation laws, it arises under those laws, within the meaning of 1445(c) O'Malley wrote.

In the end, O'Malley was ultimately persuaded that remand was appropriate in this case even if the dichotomy between statutory and common law workers compensation retaliation claims are jurisdictionally meaningful in some contexts.

[The plaintiffs] claim is too integrally related to her workers compensation claims to be deemed independent of the state statutory scheme governing such claims, held O'Malley.

Not only are Balyint actions in the future subject to the confines of state court and not subject to removal, but also, clearly this case stands for the proposition that retaliatory discharge claims would also be appropriately kept in state court and not subject to removal.

Cleveland attorney W. Craig Bashein