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Ohio Court of Appeals Upholds Sanctions for Attorney’s Frivolous Conduct

On August 28, 2017, the Ohio Court of Appeals for the Eleventh District upheld a trial court’s order imposing frivolous conduct sanctions in the amount of $22,926.72 on a plaintiff’s attorney and his law firm in the case of Keith-Harper v. Lake Hosp. Sys., Inc., --- N.E.3d ----, 2017-Ohio-7361 (11th Dist. Lake).

The plaintiff, Linda Keith-Harper, filed a complaint asserting seven causes of action against Defendants, alleging that they had engaged in unlawful age discrimination, wrongful termination based on age discrimination, disability discrimination based on Keith-Harper's knee replacement, wrongful termination based on disability discrimination, unlawful FMLA retaliation, workers’ compensation retaliation, and intentional infliction of emotional distress.

After the Court of Common Pleas for Lake County granted summary judgment on all of Keith-Harper’s claims, Defendants moved for an order imposing sanctions under Ohio’s frivolous conduct statute, R.C. 2323.51. Unlike a typical motion for sanctions, which may argue that a party’s allegations were frivolous from the onset, Defendants argued that Keith-Harper’s claims were rendered frivolous by the evidence adduced during the discovery process. Despite this evidence, Defendants had to incur additional fees and costs to litigate the case even after it was clear that Keith-Harper’s claims lacked any objective merit.

Granting Defendants’ motion for sanctions, the trial court agreed that by the time discovery had closed, “it was clear that there was no evidence that the plaintiff had requested or taken FMLA […] that she was disabled or perceived as disabled, […] that she was terminated for claiming workers’ compensation benefits that ended ten months earlier,” or that “she was directly targeted because of her age,” as “[t]he evidence showing she was terminated for just cause [was] overwhelming.” Because Keith-Harper’s attorneys failed to withdraw these claims after it became clear that they were not viable, the trial court awarded Defendants $22,926.72 for legal fees and costs incurred following the close of discovery. This sanction was imposed on Keith-Harper’s individual attorney and his law firm.

On appeal, Keith-Harper’s attorneys argued, among other things, that their conduct was not “frivolous” as a matter of law and that even if it was, the trial court erred by imposing joint and several liability against their law firm.

Affirming the trial court’s decision in a divided opinion, the Eleventh District adopted a deferential standard of review and drew several important distinctions between R.C. 2323.51 and its more well-known counterpart, Civ. R. 11. As an initial matter, the Court of Appeals recognized that unlike Civ. R. 11, which requires a finding of subjective bad faith before sanctions can be imposed, R.C. 2323.51 judges frivolous conduct under an objective standard “without inquiry as to what the individual knew or believed.” Recognizing that the statute provides several grounds for determining the frivolity of a claim or defense, the Court of Appeals also held that where a trial court finds that claims or defenses are factually frivolous (as opposed to legally frivolous) its determination that frivolous conduct took place will be affirmed so long as that decision is supported by competent, credible evidence. A decision that a claim is legally frivolous, on the other hand, is reviewed de novo. If the trial court makes a finding of frivolous conduct and proceeds to order an award of monetary sanctions, that decision is reviewed for abuse of discretion. Because it found that the trial court’s detailed decision outlining the factual frivolity of Keith-Harper’s claims was supported by competent, credible evidence, the Court of Appeals affirmed the lower court’s finding of frivolous conduct. 

The Court of Appeals likewise rejected the argument that it was error to award sanctions under R.C. 2323.51 against a law firm. Citing to the statutory language that permits an award of sanctions against “a party, the party’s counsel of record, or both” the Court reasoned that unlike Civ. R. 11, which was drafted to impose responsibilities and sanctions on individual attorneys who have signed a pleading, R.C. 2323.51 was drafted more broadly to “afford an avenue of relief to a party adversely affected by frivolous conduct.” Acknowledging that several Ohio appellate courts have construed “counsel of record” to include an attorney’s firm as well as an individual lawyer, the Eleventh District affirmed the trial court’s decision to impose joint and several liability on Keith-Harper’s attorneys’ law firm.

The Eleventh District’s decision in Keith-Harper highlights an attorney’s obligation to reevaluate the merits of an asserted claim at each and every stage of litigation, and to pursue only those claims that have objective factual and legal merit. A party’s or her attorney’s failure to do so may result in a violation of R.C. 2323.51 and significant exposure to compensate an opponent for legal fees and costs.

Brennan, Manna & Diamond, LLC represented the Defendants in the trial and appellate courts, with BMD attorneys Christopher Congeni and Daniel Rudary briefing the case at the court of appeals and BMD attorney Daniel Rudary presenting oral argument in defense of the trial court’s sanctions award.

Changes to Medicare’s Physician Fee Schedule and Outpatient Prospective Payment System

Come the beginning of 2022, both the Medicare Physician Fee Schedule (“MPFS”) and Outpatient Prospective Payment System (“OPPS”) will look a little different. As a refresher, the MPFS lists the fees associated with reimbursement of services to providers at certain facilities, taking into account geography and costs. By contrast, OPPS sets reimbursement rates for hospitals and community mental health centers for outpatient services, which are determined in advance. A summary of some of the more pertinent changes to each rule will be outlined below.

CMS to Once Again Reprocess Outpatient Clinic Claims

The Hospital Outpatient Prospective Payment System (OPPS) Rule was passed in November 2018, which was intended to prevent the Centers for Medicare and Medicaid Services (CMS) from paying more for services rendered in outpatient settings than what they paid for the same services rendered in physician offices that are simply owned by hospitals or health systems.[1]

New Vaccine Requirement for Select CMS-Participating Facilities

On November 4, 2021, the Centers for Medicare and Medicaid (“CMS”) released a new rule requiring certain healthcare facilities to implement policies requiring employees to be vaccinated against COVID-19. It does not matter if a staff member does not perform patient treatment services, they must still be vaccinated if an employee of an applicable facility.

OSHA COVID-19 EMERGENCY TEMPORARY STANDARD (ETS) Vaccination, Testing, Recordkeeping, and Reporting

The Occupational Safety and Health Administration has issued its long-awaited COVID-19 Emergency Temporary Standard (ETS). Note that the ETS does not apply to employers covered under the Safer Federal Workforce Task Force COVID-19 Workplace Safety: Guidance for Federal Contractors or Subcontractors (see here), or to settings where employees provide healthcare services subject to OSHA’s ETS for the healthcare industry (see here).

Interesting Trends Revealed in 50-State Medicaid Budget Survey

Results of the KFF annual survey of state Medicaid directors reveal some fascinating trends in Medicaid service delivery and benefit coverage. Read on for a summary of the highlights we find most noteworthy. Background As a preliminary matter, many of the trends KFF identifies and that we highlight below are no doubt a result of the Covid-19 pandemic. The pandemic triggered a public health emergency and economic crisis that resulted in increased Medicaid enrollment, service offerings, and flexibility in service delivery, along with a heightened awareness of disparities in access to care and health outcomes.