This family business, which also has a production facility in Indiana, is a strong competitor in the dairy industry, despite competition from Texas-based Dean Foods, which has acquired several smaller dairies, and Cincinnati's Kroger Co. Smith Dairy, which makes three brands -- Smith's dairy products, Moovers single-serve milk and Ruggles ice cream -- acquired New Philadelphia-based Goshen Dairy in early 2002 and the traditional ice cream business from Canton's Superior Dairy in January 2005. The company is expanding its 35-degree refrigerated warehouse by 34,000 square feet to provide for consistent product rotation and minimal out-of-stocks.
"We're tight on space, and that's limiting production efficiencies and ability to serve customers quite as well as we want to," Schmid says. "It'll allow us to have bigger inventories and to take care of volume a little better. It should (also) help speed up how fast we can load up trucks and get them through the system. Just by having more room to work around, we should be able do things faster."
The expansion project, which began last October, is targeted for completion in July. As of press time, it was costing the company a little more than $6 million and "hasn't been going on long enough to be off-budget yet," Schmid says.
Smart Business spoke with Schmid about the company's expansion, its community impact and milk as the new lifestyle beverage.
As the president of Smith Dairy, what steps are you taking to manage the company during this expansion project?
I just have a lot of good people who are helping to make things happen. Fortunately, we have a lot of really good leaders and other people who are working and committed to serving customers.
There are a few people who are spending a whole lot of time on the new project but for many people, it's not much of an interruption. There's a contractor overseeing (the project), and we have somebody internally who is working close to full time with the contractor to keep things going.
How do you expect your company's expansion to affect the Orville economy?
It's helping us be stronger for the future. If we're stronger, that helps the Orrville economy -- just being able to serve the changing needs of the customers, meeting the changing competition and things of that nature. This will help us take on other challenges in the future. So in that way, it's going to be positive for Orrville and Wayne County, and it should help us make us stronger.
The competition has gotten more intense because over the last five years or so, there have been a lot of acquisitions in the dairy industry by Dean Foods. Where we used to compete with a whole lot of independent dairies, we're now competing with one big dairy plus a few independents.They can do things in some ways better than we can, and this will help us compete in other ways because that segment has changed.
Our customer base is changing. Big supermarket chains are getting bigger, which means there's always a real change in the supermarket business, and not only in supermarket but retail business as well as food service. Food service distributors are getting better, and we're working hard at serving them better, too.
There's just constant change in the things your customers want and need, and this will get more products packed differently. We should be able to work with them better.
What is the biggest lesson that you've learned during this expansion project?
Something we knew beforehand. We wanted to start it two months earlier so that we'd be out of the mud now and under roof. But right now, the construction project is going slowly because the monsoon season we've had for the last two months has just made the contractors push mud around, and it's just hard for them to work in there.
They're making progress but they will have to work twice as hard (to complete the project by July.)
We've learned that China has made a big impact on the U.S. in many ways. The growth happening in China has made the cost of steel in the U.S. more expensive. If anything's challenged our budget, it's the steel.
If we could have built a year ago or two years ago, the steel would have been probably half as expensive. I shouldn't say 'half' because I don't know what it would have been but there's a huge increase in steel.
As the third generation to manage Smith Dairy, how do you balance your company's traditional values and the modern innovation it takes to compete?
(A Smith Dairy tradition is to) give the customer the best, not only in products but in service. Those concepts are still there. Having the commitment to quality is still there. Just the way of doing it keeps changing. Many years ago, til now, there's just a huge change in quality and service and the demands of customers and keeping that focus on the customer.
We've seen customers for a while saying, 'Cut back on service to give us a better price,' and now (they're saying), 'We want better service but we don't want to pay more.' The good end product is a combination of the quality of that gallon of milk or pound of cottage cheese or half-gallon of ice cream, plus it's the service that you provide to the customer, be it a food service place or the retailer.
They like being delivered on time; they like getting all of what they wanted; they like us to do more of the work and them to do less.
America's milk processors have been running an aggressive advertising campaign. How has that affected your company's sales?
It's at least positive news about drinking milk. There's been a lot of negative news. It's easy to take shots at milk but there's some good news on milk and dairy products that says a lot of skim milk and 1-percent reduced-fat milk in your diet is actually good for losing weight.
The research has shown that there's some truth to that, and so that's good. We have had some promotions or campaigns built around that concept. The one slogan is '24/24', and that's 24 ounces of milk in 24 hours helps the diet. We've done some things with that, and we've really seen some increases in the skim milk and low fat milk sales.
It's good news, and we just have to work hard as an industry to communicate that well to the population.
HOW TO REACH: Smith Dairy Products Co., (800) 776-7076 or www.smithdairy.com
The error comes from a lack of proper forecasting and budgeting of cash flows, says Mark Bober, partner at Akron-based Bober, Markey, Fedorovich & Co. He says the investment in working capital in a typical business varies between 15 percent to 60 percent of sales.
"If you have an investment of 30 percent in working capital, then, if you grow your sales by 15 percent, not all of that increase in sales over a gross profit margin is going to fall to the bottom line," Bober says. "It's going to fall to the bottom line in terms of profit but not in terms of cash flow because that portion of it is going to be tied up in working capital."
As the borrower, the business owner is responsible for presenting the lender with financial information that reflects the true and correct results of operation and the financial position of the business; and in some credit agreements, the business owner must report receivables and inventory numbers on a daily, weekly or monthly basis.
"Then that would be the basis for how much they advance on the loan," Bober says.
Banks often give a line of credit based upon a company's accounts receivable and inventory on the working capital line of credit. Bober says the lender is typically going to advance at between 80 percent and 85 percent of a business's eligible accounts receivable and between 50 percent and 60 percent of a business's eligible inventory.
Bober suggests business owner ask themselves the following questions to determine whether they have opportunities to accelerate cash flows and manage their working capital more properly.
* What type of efforts are being made to speed up the collection of receivables?
* Does the business send out monthly statements to customers, showing what they owe?
* Does it make collection calls to customers?
* If there are discrepancies between what is billed and what the customer thinks should have been billed, are those calls investigated and resolved on a timely basis?
And for those who want to expand their credit line, Bober suggests the following steps.
* Budget and forecast. Bober says having a business plan in place that includes budgeting and forecasting gives the lender a good picture of how the business is going to be operated into the future.
* Consider management. "(Banks) are lending to a business but they're also lending to an individual," he says. "The credibility of the individual becomes a very important factor in the eyes of the lender."
* Review the payables. If vendors are expecting payment within 30 days and the average aging on payables is out 90 days, it's going to be a problem for business owners trying to expand their line of credit or renew the line of credit. "That is going to be an indication to the lender that the business may be undercapitalized, and it may be a situation that's just going to continue to get worse," Bober says. " ... (Lenders) don't want to be funding losses unless there's a path to profitability and to repaying their debt."
* Have reliable and timely financial reporting. "Depending on the way your loan agreement is structured, you may have to get an accounting firm involved (because) it may require compiled, reviewed or audited financial statements," Bober says.
* Make sure there are no surprises. The lender wants to know what's going on in the business as soon as the business owner knows. "(The lender is a) business partner ... in the sense that they're not an equity partner, but they're helping you fund your business growth," Bober says.
HOW TO REACH:
Bober, Markey, Fedorovich & Co., (330) 762-9785 or www.bobermarkey.com
Throughout this transformation of the Akron-based cutting tool manufacturer, management wanted to establish and maintain regular communication with employees. To do that, in addition to planning a companywide offsite meeting, management began posting information on a daily basis.
"What (the employees) want to know is not some abstract number that may mean something to an accountant, but, 'What does that mean to what's going on in my particular area?' I don't know that it's possible to overcommunicate," Simpson says.
Timing is everything, and Manchester got an influx of orders toward fourth quarter 2003.
"Ironically now, here we are, a year-and-a-half later, and decisions that we're making now seem almost more difficult to make now because then, there was no question what had to be done," Simpson says. " ... You come to the realization that there are a lot of things that are outside of your control, all the more reason to focus on those things that are within your grasp and make sure you can control as much of your own destiny as you can ,and then try to turn that into something positive."
HOW TO REACH: Manchester Tool Co., (330) 644-8853 or www.manchestertools.com
If a company becomes a better logistics provider and puts more focus on customer service, he says, the company will grow the top line as an added benefit.
"The supply chain is going to be only as strong as its weakest link," he says. "If ... you don't get good service from your motor carriers delivering product to your customers, the customer doesn't care how well you manufacture the product. They don't care how cheap you're able to buy the components to make that product, and they don't care if your packaging is pretty.
"All they know is they get poor transportation service, and they can't get the product on the shelves to sell to their customers."
The same scenario can occur on the other end of the supply chain. If a company's transportation carriers are quick and efficient, but it can't make the product for several weeks because the components aren't available or the manufacturing process is slow, "What good is it to have fast carriers if you already screwed up the process in-house?" DuBiel says.
Having an efficient supply chain not only makes sense, it saves money. DuBiel says for typical companies, an additional $20 in incremental sales would be needed to have the same impact as $1 in supply chain savings. Many companies have tapped out their markets, and their top line has flattened out.
"If you can't grow the marketplace, (a company) can certainly cut the bottom line through efficiency and cost-cutting measures, and not your typical slash-and-burn," he says. " ... (Businesses) can streamline processes, take the resources people have and ... shift those resources to more strategic deliverables."
Decision-makers should take a strategic approach to accelerate cost reductions, improve cash flow and mitigate risk. This includes building strong relationships with customers, suppliers and service providers.
"Forecasting is probably the single biggest problem we see with small- to mid-cap companies," DuBiel says. "Poor forecasting leads to poor sales performance. It leads to inefficient inventory levels, and inventory dollars equate to pre-cash flow."
Because there is usually less bureaucracy and politics in small- and mid-cap companies, DuBiel says they should play up that strength, which allows them to be more maneuverable and agile.
"(In larger companies,) each department within a company is responsible for their own operating budget, so they may not do something that may be more attractive to the company if their individual budget is affected negatively or unfavorably, so they never seem to get out of their own way," he says. " ... In small companies, typically people march to the tune of corporate results as opposed to departmental results."
It's also necessary for companies to research their competitors.
"That's part of understanding and getting a good relationship with your customer," DuBiel says. "They'll tell you if somebody's doing a better job than you are and why they are."
It's more important now than ever for companies to develop effective supply chains.
"Competition is more intense than ever. Good operating companies have taken the initiative to reduce their costs," DuBiel says. "Mass merchandisers like Wal-Mart Target and Kmart have beat the prices down as far as the prices can be beaten down. They now are sourcing from offshore points like China and India ... so they're actually cutting out the middle-man in some cases. That should be a huge concern for small to mid-market companies."
HOW TO REACH:
SupplyChainEdge, (440) 937-5151 or www.supplychain-edge.com
Oops, they did it again
With more than 25 years in the consumer goods and service industries, SupplyChainEdge senior partner John DuBiel Jr. shares the top supply chain mistakes that companies make.
* Outsourcing offshore before understanding the total cost of ownership. "I can buy something cheaper in China by 10 cents for this item," DuBiel says. "However, by the time I load in the transportation fees, duty payments, fees at seaport terminals, brokerage fees and inland-to-transportation costs, the cost of ownership may be higher than sourcing the product from someone who's geographically close to the facility."
DuBiel recommends doing a total cost of ownership study to determine how it relates to cash flow. "In today's environment with small and mid-cap companies, cash is king."
* Focusing on transactional costs, not total value. "A rate may look cheaper on paper ,but if you can't get that service at that rate, what good is it, really? We believe in the value proposition as opposed to the transactional proposition, which is, cheaper is better. Cheaper is not necessarily better," he says.
* Monitoring events as opposed to measuring events. DuBiel believes that if you can't measure it, you can't manage it. "Monitoring would be more intuitive; measurement would be more data-driven," he says.
* Considering the necessary evils as permanent fixtures. DuBiel's company "has a field day" in client mailrooms. "Small and mid-market companies have a huge expense in the area of overnight and air freight envelopes and documents," he says. "If they understood the ground service schedules, they would think twice about expediting via air."
She is also the founder and managing partner/CPA of S&A Consulting Group LLP, and her husband, Nipendra "Nip," is the firm's founder, chairman and CEO. In addition to their business, the Singhs are dedicated to creating and participating in projects that advance and generate economic development in the Greater Cleveland area.
Rita gives educational seminars and presentations to women's groups, and encourages women to lead a respectful, honorable life to achieve balance between family, business, volunteer and social goals.
"Being a mentor, to me, is not only sharing my knowledge but also learning from those who I mentor. When I work with my employees or other women business owners, I not only tell them of my past experiences but also like to learn from their success and failures," she says. "Mentor is the 'guru' who not only shows the path but also, in reality, walks with you."
When S&A Consulting won the COSE Business Plan Challenge competition, the Singhs donated a portion of their winnings to the Women Business Owners Foundation of National Association of Women Business Owners (NAWBO) so women business owners with financial hardship could get free membership in the association.
Rita helped teach business skills to women from Russia, mentors college women and hosts a free luncheon series at which she discusses business strategies. Nip volunteers with the Investment Casting Institute and serves as past president of Lake Geauga Center and as a past trustee and volunteer of the India Community Association.
S&A supports 16 professional trade association memberships and organizations, 12 professional women's organizations and 11 chamber of commerce memberships.
"In order to be successful in a meaningful way, one must participate, share and give back to the community on an ongoing basis, as an individual and collectively as a company," Rita says. "We have encouraged this at all levels of our company with employees and associates. ... What you give comes back to us. Give the best, and the best will happen to you."
HOW TO REACH: S&A Consulting Group LLP, (216) 593-0050, www.sa-consultinggroup.com.
After the purchase, he changed the company's focus -- from a flower shop that happened to sell and rent video equipment -- to a major national player on the technology scene, specializing in audio, visual, computer animation, lighting and event production.
Wheeler landed an eight-year contract staging magician David Copperfield's arena productions nationwide, and Hughie's moved from a 900-square-foot facility to a 15,000-square-foot warehouse to a 90,000-square-foot office and warehouse. Other high-visibility contracts included programs at the Nautica Stage, Johnson & Johnson trade shows and the acquisition of a Columbus audio-visual company, which took Hughie's into new markets.
As the company grew, Wheeler became more involved in nonprofit organizations that needed his expertise. In addition to monetary donations, Hughie's often performs pro-bono work in staging and managing events. Among the company's favored agencies are the Greater Cleveland Peace Officers Memorial Society (GCPOMS), the Cornerstone of Hope and the Cleveland Advertising Association (CAA).
* GCPOMS was formed in 1985 to honor peace officers who give their lives in the performance of service. Hughie's provides sound systems, a camera crew and an outdoor video screen for its annual May parade and memorial service. The society hosted a service in May 2002 to honor officers killed on 9/11, and Hughie's donated more than $30,000 in equipment and services for the ceremony and concert the following day.
* The Cornerstone of Hope, which hopes to build a center in Cuyahoga County, helps children, teens, adults, spouses and families grieving the loss of a loved one. When Cornerstone was planning its first gala fund-raiser earlier this year, Hughie's donated more than $20,000 worth of equipment and service for a live performance by recording artist Lou Christie. Hughie's has also sponsored Cornerstone's annual charity golf outing and donated more than $10,000 worth of staging, lighting and sound for a summer fund-raiser.
* Hughie's provides office and warehouse space for the CAA's annual judging weekend to nominate the best in Cleveland advertising and donates more than $20,000 worth of goods and services to the Addy Awards ceremony. Hughie's also sponsors CAA's outing, donates equipment for CAA's monthly luncheon meetings and donates items to CAA's annual auction, which raises scholarship money. HOW TO REACH: Hughie's Audio-Visual and Computer, (800) 449-4115 or www.hughies.com. >
Focusing on education through recreation, K&M launched a line of plush birds implanted with sound chips that played a generic bird call.
"The birds had been selling in the market for at least six months before (the National Audubon Society) saw them and got interested in licensing them," says Manjit Dhillon, director of marketing for Wild Republic. "They approached us in the summer of 2001 with a proposal, and from there on, the line just grew wings."
Audubon suggested K&M contact the Cornell Lab of Ornithology in Ithaca, N.Y., about authentic bird calls, and the generic calls in the toy birds were replaced with actual bird songs recorded by Cornell. The Audubon Birds have earned a following among children who collect them and adult birdwatchers who use the authentic sounds to attract birds to their backyards.
"Once we partnered, we just went on creating more and more birds," says Dhillon. " ... In terms of developing new birds, it's Audubon, Cornell and K&M; the three of us sit down and discuss what's out in the market and what is selling."
The Audubon Birds also are licensed in the United Kingdom with the Royal Society for the Protection of Birds.
"It's very educational, and we've even had teachers buying the birds from us because they use it as an educational tool in the classroom," Dhillon says. "That's how we try to integrate the fun values of a toy and bring education into it."
The company recently signed an international licensing agreement with the Natural History Museum (NHM) in London for its new Dinosauria line, which presents dinosaur species from different continents in their truest form as reflected by the latest research.
"NHM has worked with us to ensure that they are well-represented scientifically and factually," Dhillon says. "NHM is well-respected. They are known for their dinosaur exhibits worldwide, so to say this is an NHM-licensed line is very prestigious."
K&M also has a long-running partnership with the American Zoo and Aquarium Association (AZA) that began in 1997. The AZA called upon manufacturers for a bid for its plush business, and K&M won because its plush toys represented animals in the most realistic way.
"Our partnerships, especially with Audubon and Cornell, have not only given us enormous visibility, it has also resulted in tremendous sales because of the solidity of the program, good word-of-mouth in the industry -- inviting other such proposals -- and given the respective product lines a lot of credibility," she says.
Although many companies have approached K&M about forming partnerships, Dhillon says the company has strict partnership criteria.
"Does the licensor involved bring a true sense of integrity to our company with respect to the products or services they wish to market?" she says. "Does the mission of the licensor involved tie in with our beliefs and values?"
In the United States, K&M products are sold in more than 500 zoos, museums and aquariums and in more than 10,000 specialty toy, gift and nature stores. The company has more 90 employees in the United States and 500 employees worldwide.
"This is a matter of pride for us. It's an honor that these organizations respect our work," Dhillon says. "They see value in what we've done, and they actually approached us to build a strong partnership. We have a very good relationship with all of our licensing partners." HOW TO REACH: K&M International Inc., (330) 425-2550 or (800) 800-9678, www.kmtoys.com or www.wildrepublic.com
Web of intrigue
Developed by an outside firm and directed in-house, the Web site of Wild Republic has animal sounds, games and kid appeal. Manjit Dhillon, K&M's marketing director, says successful Web sites reflect a company's personality and bring it closer to the consumer.
"It's much easier to reach the kids through Web sites than it is to reach them through advertising," Dhillon says. "This is one way you can directly reach out to your target user -- not to your target buyer, the buyer would be a parent -- but the target user is a child."
Dhillon shares three essentials that turn Web sites into powerful marketing tools.
* Focus on the core business. "You can communicate that through your Web site so your site has a very cohesive look about it, which gets translated as a brand personality into the consumer's hands," Dhillon says.
* Make a plan for the site. Will it feature products? Change your brand perception? Be used solely for business? "Our focus is ... reaching out to the child and trying to have the kid interact with our brand as much as possible and want more, which is why we have things like games, cartoons and some educational stuff like the Audubon Birds," Dhillon says. "Focusing on the purpose of the Web site is very important; otherwise, it can be all over the place."
* Identify a user age range. Originally designed for young children, Wild Republic's site now entertains older kids. "If an older brother visits the Wild Republic Web site and does fun things, then (the younger child) wants to visit that Web site also," Dhillon says.
The licensed and accredited ACC helps children and young adults with disabilities lead independent and productive lives. The agency also weaves therapy, education, recreation and family support services together to meet the needs of the entire family. The centers are located in Highland Hills and Lakewood, with Camp Cheerful and therapy services focused in Strongsville.
Set on five acres, the new 36,000-square-foot Breen Family Center features a barrier-free camp pavilion surrounded by wheelchair-accessible mulched trails; treatment facilities with video monitoring technology, which allows therapies to be recorded for progress reports and family training sessions; and a resource center to help families learn more about supporting children with disabilities.
Among the ACC team members, Nobili is known for embracing change in good times and in challenging ones, and effectively balancing ACC's mission with for-profit business principles. When she arrived at ACC 10 years ago, she instituted a decision-making process that continues today. Any program development, program change or solution to a program issue must pass a mission and fiscal compatibility screening.
The ACC team analyzes the issues and presents the information to management; employees understand the fiscal aspect is critical to sustaining the agency's programs and its mission into the future.
Nobili's management techniques have also impacted the development, expectations, retention and participation of the agency's board of trustees. Through clear expectations, relationship-building and frequent and concise communication, ACC has a supportive, active and dedicated board that enables the agency to better meet its fiscal challenges. HOW TO REACH: Achievement Centers for Children, (216) 292-9700 or www.achievementcenters.org
Foremen at the Longwood Apartments on Cleveland's near East Side acted as mentors to PAR employees and taught them basic construction techniques so Marous Brothers staff could determine where their skills could best be worked into the construction company's apprentice program.
As a supplement to union training, Marous Brothers' Total Quality Management Program has been implemented to instruct apprentices on the proper ways to complete specific tasks, gain a better understanding of their jobs and learn trade secrets from supervisors or experienced journeymen to make them better tradespeople and more valuable as Marous Brothers employees.
Understanding the value of cooperative education, Marous Brothers has hired 18 college students from throughout Ohio as office and field personnel.
Occasionally, a project requires the services of a construction manager. Marous Brothers Construction has accepted this challenge from two local organizations:
* Hard Hatted Women needed construction management assistance to convert an existing office/warehouse building in Cleveland to house its new Pre-Apprentice Training Facility. The upgrades and improvements are estimated at $65,000.
All labor on the project is being donated by various construction trades and local union apprentice committees, and local companies are donating all material. Marous Brother' in-kind donation to this project is $6,000.
* The Willoughby Fine Arts Association asked Marous Brothers to oversee the construction of a 20-by-20 stage that would be strong enough to support a theatrical performance or concert. Marous Brothers' site, concrete, carpentry and landscape divisions and other companies donated labor and material.
The staff, faculty, board, students and patrons were so pleased with the results, Marous Brothers staff members were invited to be guests of honor at a concert and dedication of the outdoor stage in July. The company's in-kind donation to this project was $9,100.
Chip, Ken and Scott also believe the legacy that you leave behind isn't always made of bricks and mortar. Marous Brothers' management and staff are committed to their communities and partner with organizations that improve the lives of individuals and the condition of the world at large. In 2003 and 2004 combined, they gave nearly $24,000 in charitable donations and $68,000 in sponsorships.
HOW TO REACH: Marous Brothers Construction Inc., (440) 951-3904 or www.marousbrothers.com
Moyer has led several initiatives in his time on the court, including the adoption of strict contribution limits for judicial campaigns and changing the rules that govern attorney and judicial conduct and more strictly enforcing them.
During his State of the Judiciary address in September, Moyer announced that Ohio will join a consortium with California and Maryland to establish regional educational centers to prepare judges to adjudicate high-profile cases involving the life sciences, genetics, biomedicine, biotechnology and the neurosciences.
"It's impossible to train every judge in the country on science, so the regional centers will train a core group of judges who can then either assist a sitting judge who has the case in which the controlling issue may be an issue of biomedicine, or could have the case assigned to that research judge to try," he says.
Moyer, who at press time was campaigning for a fourth six-year term on the court, received his law degree from The Ohio State University and spent several years in private practice before serving as Gov. James A. Rhodes' executive assistant.
He served as judge of the Tenth District Court of Appeals from 1979 to 1986 and was elected to his first term as chief justice on Nov. 4, 1986.
Smart Business spoke with Moyer about educating judges, frivolous lawsuits and tort reform.
How will the consortium with California and Maryland to establish regional education centers help Ohio's biomedicine and biotechnology firms?
The project is not directed at helping them directly, although I would guess that we will, as the program develops and we search for faculty, draw upon some of the persons who are involved in biomedicine and biotechnology. ... Most judges, of course, are not trained in bioscience or biomedicine, and the judges are the gatekeepers in determining what evidence juries or the fact-finders are going to hear.
Oftentimes, the judges simply don't know what is credible science and what is not credible science. The program will provide judges with knowledge about science, and therefore, hopefully produce a better result in the courts, based upon credible science rather than science that is not credible.
Tort reform is the buzzword among business owners. How do you define 'tort reform'?
I have to be very careful because the General Assembly is considering a fairly comprehensive bill that is designated as tort reform by some, and it's likely that if that legislation is adopted, there could be challenges to it, or parts of it. Those challenges would likely find their way to the Supreme Court.
The term, tort reform, is applied to any number of measures that some people see as making it more difficult either to file a claim against someone or to recover against an entity by placing caps on punitive damages. There are a number of other provisions of the tort reform legislation, as I understand, directed at ultimately trying to make a better climate in Ohio for business, and that's what I understand tort reform to be directed at.
To sit on the medical side, of course, there was a bill passed last year directed at medical malpractice suits, which, among other things, does put caps on punitive damages and the pain and suffering element. That's in response to the very high premiums that many doctors across Ohio are having to pay for their malpractice insurance -- premiums that seem to increase substantially every year.
I would think that that legislation will also find its way to the Supreme Court.
Do you think frivolous lawsuits are clogging the Ohio courts?
We have a very open and accessible court system in our country. People can file any suit they want, and it's up to the judges to dismiss those suits and cases that have no merit. I can't quantify how many frivolous lawsuits there are but one of the sort-of hallmarks of the American legal system is our providing consistency and predictability in the law.
I feel very strongly that the law, as announced by the Supreme Court, usually should change incrementally and very slowly, should develop rather than change radically, making very abrupt changes, because that creates an uncertainty that makes it difficult for trial judges to know what is a frivolous lawsuit. The Supreme Court has sanctioned persons who have filed appeals in the Supreme Court that are determined to be frivolous. We've ordered the losing party to pay the costs of the winning party.
A frivolous lawsuit would be either of two forms: One is a lawsuit that simply has no merit, either legally or factually. The other can be a lawsuit, such as a lawsuit that is filed against several doctors, for example, and perhaps a hospital, where there may be someone at fault but there are four or five persons who are added as defendants who had nothing to do with the alleged malpractice. And that's an area in which we can find ... the frivolous adding of parties to lawsuits that might otherwise have some validity.
But generally, it's a lawsuit that's just based on whether there are no facts to support the allegation, or the law is very clear that the person has no chance of winning. HOW TO REACH: Ohio Supreme Court, (614) 387-9250, www.sconet.state.oh.us