Summary
In Ohio Academy of Trial Lawyers v. Dept. of Ins. (1983), 4 Ohio St.3d 201, 4 OBR 519, 448 N.E.2d 141, we held that a letter from an attorney-examiner indicating that a hearing was unnecessary did not constitute a final order of an agency issued pursuant to an adjudication as required by R.C. 119.12.
Summary of this case from Bd. of Retardation v. Professionals GuildOpinion
No. 82-598
Decided May 4, 1983.
Administrative law — Insurance — Allegations of unfair or deceptive acts in advertisements — R.C. Chapter 3901 — Letter from attorney-examiner not an agency final order pursuant to adjudication, when — R.C. 119.01 and 119.12, construed.
O.Jur 3d Administrative Law §§ 59, 123.
A letter from an attorney-examiner indicating that the need for a hearing requested pursuant to R.C. 3901.22(A) "is deemed moot" does not constitute a final order of an agency issued pursuant to an adjudication as required by R.C. 119.12 and as defined in R.C. 119.01.
APPEAL from the Court of Appeals for Franklin County.
Appellants, the Ohio Academy of Trial Lawyers, Ernest Coachman, Jr., and Vonda Spearman, instituted this cause in November 1978, by making a written application to the Superintendent of Insurance, pursuant to R.C. 3901.22(A), requesting a hearing for a determination of whether certain insurance companies had committed an "unfair or deceptive act" in violation of R.C. 3901.20 and as defined in R.C. 3901.21(B).
Specifically, the appellants contended that Aetna Life Casualty Company, Crum Forster Insurance Companies, Harleysville Insurance Company and St. Paul Fire Marine Insurance Company had placed certain advertisements, that appeared in numerous nationally circulated publications, which contained untruths, as well as unfair and deceptive statements about, and characterizations of, this state's constitutionally mandated judicial system for the resolution of personal injury actions; and which improperly sought to influence prospective jurors in cases contrary to law and basic constitutional rights. As a general motif, these advertisements sought to induce smaller recoveries in personal injury and product liability suits by characterizing litigation as a lottery, a "Liability Jackpot" game of chance, or like "Christmas morning" where gifts are received instead of justice; by claiming that attorneys and medical experts received a disproportionate share of the damages awarded; and by relating that huge awards against insurance companies were merely passed on to the consumer, i.e., the potential juror, by higher premiums.
Included were Business Week, Forbes, Newsweek, Psychology Today, Reader's Digest, the New York Times, the Wall Street Journal, the Washington Post, and Time.
One such advertisement shows a family of four huddled in front of their television set watching "Liability Jackpot." Beneath this picture appears this language in pertinent part:
"`AND NOW, THE BIG WINNERS IN TODAY'S LAWSUITS * * *'
"Is this where we're headed? At least 205 Americans have now won damage suits worth a million dollars or more.
"In 1962 there was one; the next year, two; and as recently as 1969, only three. But by 1976 the number of million dollar plus awards ballooned to 43. The stakes have gone up.
"Were these awards justified by real losses and clear fault? Or were they grand prizes in a lucrative game of chance — America's dis-tort-ed tort law system? * * *
"If there were no losers in this game, we might dismiss it as harmless fun, like a lottery. But every payer of liability insurance premiums is a loser. And indirectly all of us lose, as the soaring costs of settlements and insurance force up the prices of the products and services we use.
"We've reached the point where a person was actually awarded well over a million dollars for `traumatic neurosis' resulting from a false arrest for shoplifting.
"Justified claims should be fairly compensated. But it's time to look at state laws that permit excessive and unwarranted awards. California has done so with a citizens' commission created to help bring balance back to the system. We urge other states to follow.
"Insurers, lawyers, judges — all of us share some blame for this mess. But it is you, the public, who can best begin to clean it up — by making your views known to your elected representatives. Don't underestimate your own influence. Use it, as we are trying to use ours." (Footnotes omitted.)
Appellants also sought, inter alia, a "cease and desist" order prohibiting the named insurance companies, their agents and their advertising companies from publishing these advertisements.
Thereafter, the appellee, Department of Insurance, contacted each of the aforementioned insurance companies and requested a response from them concerning the appellants' allegations. Subsequently, an attorney-examiner for the appellee sent a correspondence, dated March 28, 1979, to the appellants' counsel. It read in relevant part:
"The Department has completed the preliminary investigation necessary to determine whether the Superintendent will grant the * * * Application for Hearing. All information obtained through this investigation indicated that the advertising listed in said Application for Hearing was no longer being printed. Since the relief affordable under Division (B) of Section 3901.22 would be a cease and desist order from the Superintendent of Insurance and since the companies have already stopped publication of the listed advertisements, the need for the requested hearing is deemed moot." Carbon copies of this letter were sent to Robert L. Ratchford, Deputy Director, and Robert H. Katz, Warden.
On April 11, 1979, the appellants filed a notice of appeal "under the authority of Section 119.12 of the Ohio Revised Code from the final order entered by the State of Ohio Department of Insurance on March 28, 1979" with both the Department of Insurance and the Franklin County Court of Common Pleas. A concomitant praecipe was filed requesting that the appellee comply with the record requirements of R.C. 119.12.
After sundry proceedings, not particularly relevant to this opinion, the trial court found that the denial of an R.C. 3901.22 hearing was a quasi-judicial proceeding, reviewable on appeal pursuant to R.C. 119.12. It also concluded that the denial of the appellants' application for a hearing was an adjudication that was not supported by "reliable, probative, and substantial evidence" and not in accordance with law. Finally, the trial court ordered the appellee to issue a cease and desist order against the insurance companies to ensure that additional advertisements would not be forthcoming.
The court of appeals reversed, holding that the letter from the attorney-examiner was not a final appealable order, and therefore, since the trial court had no jurisdiction over the appeal, it erred in issuing the cease and desist order.
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Mr. Don C. Iler, for appellants.
Mr. Anthony J. Celebrezze, Jr., attorney general, Mr. Thomas W. Hess and Mr. Roger P. Sugarman, for appellee.
Messrs. Graham, Dutro Nemeth and Mr. James L. Graham, urging affirmance for amici curiae, American Insurance Assn. et al.
R.C. 119.12 provides in pertinent part:
"Any party adversely affected by any order of an agency issued pursuant to an adjudication denying an applicant admission to an examination, or denying the issuance or renewal of a license, registration of a licensee, or revoking or suspending a license, may appeal from the order of the agency to the court of common pleas * * *.
"Any party adversely affected by any order of an agency issued pursuant to any other adjudication may appeal to the court of common pleas of Franklin County, except that appeals from orders of the fire marshal, issued under Chapter 3737 of the Revised Code, may be to the court of common pleas of the county in which the building of the aggrieved person is located." (Emphasis added.)
"Adjudication" is defined in R.C. 119.01(D) as "* * * the determination by the highest or ultimate authority of an agency of the rights, duties, privileges, benefits, or legal relationships of a specified person * * *"; "person" includes "person, firm, corporation, association or partnership" (R.C. 119.01[F]).
Quite clearly, the Superintendent of Insurance is such "highest or ultimate authority." R.C. 3901.011. The touchstone of the appellants' cause, therefore, as the court of appeals noted, is whether the letter from the attorney-examiner is an order of the Superintendent of Insurance. We concur with the court of appeals, and hold that it is not.
There is nothing in the record to indicate that the Superintendent adopted, affirmed, modified, ratified or even considered the attorney-examiner's conclusion that "the need for the requested hearing is deemed moot." In fact, the letter would tend to indicate that the Superintendent was not even sent a carbon copy thereof. There being nothing to indicate that the appellants' application was denied pursuant to a determination by the Superintendent of Insurance, there was no order from which an appeal pursuant to R.C. 119.12 could be instituted. Thus, the propriety of the trial court's "cease and desist order" is moot.
This is not to say that such action on the part of the Superintendent would necessitate a contrary result, or that the type of action enumerated is exhaustive.
For the foregoing reasons, the judgment of the court of appeals is affirmed.
Judgment affirmed.
SWEENEY, A.C.J., KEEFE, LOCHER and HOLMES, JJ., concur.
C. BROWN and J.P. CELEBREZZE, JJ., dissent.
SWEENEY, J., sitting for CELEBREZZE, C.J.
KEEFE, J., of the First Appellate District, sitting for W. BROWN, J.
WILSON, J., of the Second Appellate District, sitting for SWEENEY, J.
On November 30, 1978, appellants filed a formal application for a hearing and other relief with the Ohio Department of Insurance, pursuant to R.C. 3901.22, claiming that four insurance companies had published blatantly untrue, deceptive and misleading advertisements. On March 28, 1979, the Department of Insurance responded with a letter to appellants' counsel deeming "the need for the requested hearing * * * moot." Today, this court deems appellants' appeal from that finding not a final order of the Department of Insurance because the letter was signed by an attorney-examiner, not the Superintendent himself. Because I disagree with this absurd conclusion, I dissent.
To say that the decision to deny the application for a hearing was not that of the Superintendent is to ignore the express wording of the correspondence. The letter at issue signed by the attorney-examiner clearly indicates it was, in fact, a final order made and approved by the Superintendent of Insurance. It stated:
" The Department has completed the preliminary investigation necessary to determine whether the Superintendent will grant the above-named application for Hearing * * * [s]ince the relief affordable under Division (B) of Section 3901.22 would be a cease and desist order from the Superintendent of Insurance and since the companies have already stopped publication of the listed advertisement, the need for the requested hearing is deemed moot." (Emphasis added.)
The above letter clearly represented the official policy of the department, as developed by an attorney working in the legal enforcement section, and as reported to her department head and to the deputy director of the department. Nothing in the record indicates that any further action was contemplated on appellants' request, or that the presence of a document signed by the hand of the Superintendent was essential to the finality of the finding of mootness. It is apparent that the letter, by its explicit language, was a final order of the Superintendent pursuant to an adjudication, so that an appeal under RC. 119.12 was proper. While this court holds that this was not a final order of an agency, it does not venture to identify exactly what it is.
This court should not be naive concerning the mode of operation of the Ohio Department of Insurance. In recent years, that department has demonstrated remarkable dexterity in avoiding the performance of its statutory duties. See, e.g., State, ex rel. Life of Maryland, Inc., v. Katz (1983), 4 Ohio St.3d 140, 142 (dissenting opinion by Justice Clifford F. Brown).
Since I would find that a final appealable order is before the court, the next question becomes whether the named insurance companies can be said to have committed an "unfair or deceptive act" such that a cease-and-desist order was appropriate.
In my view, the court of common pleas exceeded its authority in ordering the Department of Insurance to enter a cease and desist order before the department had an opportunity to rule on the "unfair or deceptive" content of the advertisements in question. However, like the court of common pleas, I would conclude that the department's finding of mootness was not supported by reliable, probative and substantial evidence, was not in accordance with law, and should have been reversed. The bare assertion by the named insurance companies that they would refrain from such advertisements in the future, given to the Department of Insurance by telephone and correspondence, does not moot a claim of deceptive advertising. Moreover, R.C. 3901.22 authorizes the Superintendent to deny an application for a hearing only if the application is made in bad faith or there are no grounds establishing that the applicant is aggrieved. No one argues that either of these conditions pertains to this case. Given grounds for a hearing, I would find the Superintendent has a mandatory duty under R.C. 3901.22 to hold a hearing to determine whether the advertising campaign in question violated Ohio law.
J.P. CELEBREZZE, J., concurs in the foregoing dissenting opinion.