[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Delphi Automotive Sys., L.L.C. v. Ohio Dept. of Job & Family Servs., Slip Opinion No. 2020-
Ohio-2793.]




                                        NOTICE
     This slip opinion is subject to formal revision before it is published in an
     advance sheet of the Ohio Official Reports. Readers are requested to
     promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
     South Front Street, Columbus, Ohio 43215, of any typographical or other
     formal errors in the opinion, in order that corrections may be made before
     the opinion is published.



                         SLIP OPINION NO. 2020-OHIO-2793
       DELPHI AUTOMOTIVE SYSTEMS, L.L.C., APPELLANT, v. DIR., OHIO
            DEPARTMENT OF JOB AND FAMILY SERVICES, APPELLEE.
  [Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as Delphi Automotive Sys., L.L.C. v. Ohio Dept. of Job & Family
                     Servs., Slip Opinion No. 2020-Ohio-2793.]
Unemployment-contribution rate—The language in R.C. 4141.24(G)(1) requires
        concurrent ownership, management, or control of both employers at the
        time that the business or trade is transferred—Court of appeals’ judgment
        reversed and trial court’s judgment reinstated.
     (No. 2017-0553—Submitted January 29, 2020—Decided May 7, 2020.)
              APPEAL from the Court of Appeals for Franklin County,
                           No. 14AP-971, 2017-Ohio-809.
                                  ________________
        DEWINE, J.
        {¶ 1} This case deals with the transfer of a business and the manner in which
the new business’s “unemployment tax” will be calculated. Ohio employers pay
                              SUPREME COURT OF OHIO




an “unemployment tax” to support the state’s workers’ compensation system; this
tax is partly based upon an employer’s “experience rating,” which is derived from
the amount of unemployment benefits that have been paid to the employer’s former
employees. The question in this case is whether the new business will receive the
prior business’s “experience rating.”
        {¶ 2} For the answer, we look to a statute that mandates that a new employer
will receive the prior employer’s experience rating if “at the time of the transfer,
both employers are under substantially common ownership, management, or
control.” R.C. 4141.24(G)(1). Here, the new employer did not share common
ownership, management, or control with the old employer on the date of the
transfer, but it did hire the old employer’s management team not long thereafter.
The court of appeals concluded that the new employer would receive the prior
employer’s experience rating. It reached this result by construing the phrase “at the
time of the transfer” broadly to include a multiweek-transition period during which
various aspects of the business were shifted from the old employer to the new
employer.
        {¶ 3} We disagree. Under a plain reading of the statute, “at the time of the
transfer” refers to the discrete point in time at which the legal transfer or acquisition
occurs. Because both employers were not under substantially the same ownership,
management, or control at the point in time at which the transfer occurred, the new
employer is not subject to the prior employer’s experience rating. We reverse the
judgment of the court of appeals.
                                The statutory scheme
        {¶ 4} Ohio employers are required to pay into the state’s unemployment-
compensation fund. See R.C. 4141.09; see also R.C. 4141.23 and 4141.01(L). The
director of job and family services maintains a separate account for each employer’s
contributions and determines the rate at which the employer must make payments
into that account. R.C. 4141.24 and 4141.25. The employer receives a credit



                                           2
                               January Term, 2020




against its federal unemployment-tax liability for its state payments.
26 U.S.C. 3302(a).
       {¶ 5} An employer’s annual unemployment-contribution rate is based in
part on the amount of unemployment-compensation benefits paid to its former
employees; this is referred to as an experience rating. R.C. 4141.25(A). Employers
who lay off high numbers of employees will therefore typically have a higher
experience rating and pay higher taxes into the unemployment fund. See Kearns,
State Implementation of the SUTA Dumping Prevention Act of 2004, 11 The State
and Local Tax Lawyer, 105, 109 (2006). Employers who do not have sufficient
experience on which to base their tax rate are assigned a standard new-employer
rate. R.C. 4141.25(A).
       {¶ 6} In the past, a tax-evasion practice emerged in which some employers
artificially reduced their experience rating by shifting their employees to a new or
different corporate entity. This practice became known as State Unemployment
Tax Act (“SUTA”) dumping.          These dumping schemes typically involved
transferring payroll to a newly formed corporation subject to the new-employer tax
rate or to a shell company that had earned a more favorable experience rating. See
Kearns, State Implementation of the SUTA Dumping Prevention Act of 2004 at 111.
For instance, an employer might escape its poor experience rating and the resulting
higher tax rate by setting up a shell company, operating the shell company for
several years with low turnover so that it can earn a good experience rating, and
then transferring payroll to the shell company to take advantage of the lower tax
rate. SUTA Dumping Prevention Act of 2004: Hearing Before the Subcommittee
on Human Resources of the House Committee on Ways and Means, 109th Cong.
1st Sess. (2005) (testimony of Mason Bishop, United States Dept. of Labor).
       {¶ 7} In 2004, Congress passed legislation in an attempt to curb the
problem. SUTA Dumping Prevention Act of 2004, Pub.L. No. 108-295, 118 Stat.
1090 (2004). Specifically, the SUTA Dumping Prevention Act required states to



                                         3
                               SUPREME COURT OF OHIO




ensure that when an employer transfers a portion of its trade or business to another
employer and both employers are under the same ownership and management, the
acquiring employer inherits the business’s experience rating along with its assets.
See 42 U.S.C. 503(k)(1).
       {¶ 8} The     General     Assembly    amended      Ohio’s    unemployment-
compensation statutes to bring them into compliance with the new federal SUTA-
dumping law. 2005 Am.S.B. No. 81, 151 Ohio Laws Part I, 171, 198-199. In so
doing, it enacted the statute that is at issue in this case, R.C. 4141.24(G)(1) (“the
mandatory-transfer provision”).     That provision provides that an entity that
qualifies as an “employer” under the statute will take a prior employer’s experience
rating if “at the time of the transfer, both employers are under substantially common
ownership, management, or control.”
             The transfer of assets from Old Delphi to New Delphi
       {¶ 9} The business transfer here arose from the 2005 bankruptcy of the
Delphi Corporation, a multinational automotive-parts manufacturer. As part of the
reorganization plan, two hedge funds, Elliot Associates, L.P., and Silver Point
Capital, L.P. (“the hedge funds”), worked out a deal to acquire certain assets of
Delphi Corporation from one of Delphi Corporation’s subsidiaries, Delphi
Automotive Systems Services, L.L.C. (“Old Delphi”), which had operations in
Ohio. The hedge funds set up a new entity, Delphi Automotive Systems, L.L.C.
(“New Delphi”), to facilitate the transaction. On October 6, 2009, a portion of Old
Delphi’s Ohio assets were transferred to New Delphi.
       {¶ 10} In June 2011, the Ohio Department of Job and Family Services (“the
state”), notified New Delphi that it would be assigned Old Delphi’s experience
rating for the years 2009 through 2011 under the mandatory-transfer provision.
After unsuccessfully asking the state to reconsider its decision, New Delphi
requested a hearing before the Ohio Unemployment Compensation Review




                                         4
                               January Term, 2020




Commission (“the commission”). Mark Rozycki, New Delphi’s director of tax
administration, was the only witness at the hearing.
       {¶ 11} Rozycki testified that prior to the October 6, 2009 asset transfer,
New Delphi did not have any employees in Ohio, and Old Delphi and New Delphi
did not share any common ownership, management, or control. Old Delphi was
still a wholly owned subsidiary of Delphi Corporation, while New Delphi was
owned, managed, and controlled entirely by the hedge funds. As of October 6, no
one in charge of New Delphi had ever had any management authority at Old Delphi,
and vice versa.
       {¶ 12} From the date of the transfer on October 6 until October 23, New
Delphi was under the control of representatives of the two hedge funds. New
Delphi named a board of directors that did not include any former directors of Old
Delphi. On the date of the transfer, New Delphi had issued a press release
declaring, “[Old Delphi’s] President and CEO and the current leadership will
continue to manage the company’s global operations.” New Delphi did not,
however, hire Old Delphi’s leadership team at that time. Rather, New Delphi made
offers of employment for the executives to accept or reject. During this transition
period, these executives assumed some responsibilities at New Delphi and were
paid for their services, but all operational decisions had to be approved by the
hedge-fund representatives. On October 23, New Delphi’s board officially hired
Old Delphi’s president and chief-executive officer, treasurer, general counsel, and
secretary to positions similar to those they had at Old Delphi. At that point, the
hedge-fund representatives relinquished control of New Delphi. In all, New Delphi
hired roughly two-thirds of Old Delphi’s Ohio employees.
       {¶ 13} New Delphi contended that it was not subject to Old Delphi’s
experience rating because, at the time of the transfer, it was neither an “employer”
as defined by the statute nor did it share “substantially common ownership,




                                         5
                               SUPREME COURT OF OHIO




management, or control” with Old Delphi. The commission disagreed and upheld
the decision to assign Old Delphi’s experience rating to New Delphi.
        {¶ 14} New Delphi appealed to the Franklin County Court of Common
Pleas. The state defended the commission’s decision, asserting that although Old
Delphi’s management executives were not formally hired by New Delphi until 17
days after the transfer of the assets, they began working for New Delphi in
substantially the same roles immediately following the transfer. The state further
argued that even if there was “technically a break in ownership, management, or
control” during that interim period, the mandatory-transfer provision applied
because Old Delphi’s executives took control of New Delphi as of October 23,
2009.
        {¶ 15} The common pleas court reversed the commission.                  The court
determined that although New Delphi ultimately took on the same management
structure as Old Delphi, there was no evidence showing that the companies were
under substantially the same ownership, management, or control at the time of the
transfer on October 6. The court explained that the statutory phrase “at the time of
the transfer” meant “at the time of the actual transfer,” not pretransfer or post-
transfer. The court further concluded that New Delphi did not succeed to Old
Delphi’s experience rating for an additional reason: New Delphi did not have any
Ohio employees until after the asset transfer had occurred and thus could not have
met the statute’s definition of “employer” at the time of the transfer. See R.C.
4141.01(A)(1)(a).
        {¶ 16} This time the state appealed, and the Tenth District reversed,
concluding that the common pleas court improperly constricted the meaning of “at
the time of the transfer” to the “exact legal instant of transfer.” 2017-Ohio-809,
¶ 19. The court of appeals reasoned, “The appropriate understanding of the phrase
‘at the time of the transfer’ is the ‘period’ of the transfer * * *, not just an arbitrarily
determined singular date that is perhaps set forth as a legal effective date in



                                             6
                                 January Term, 2020




company or asset transfer documents.” Id. at ¶ 18. “Applying this legal principle
to a common sense and perhaps more easily understandable situation,” it
elaborated, “ ‘the time of the American Revolution’ encompasses all the events of
the American Revolution, not only the moment the last signature dried on the
Declaration of Independence.” Id. On this basis, the court of appeals held that the
trial court erroneously construed the statute to require simultaneous “ownership,
management, or control” of both companies at the time of the legal asset transfer.
The court also concluded that the common pleas court improperly found that at the
time of the transfer, New Delphi was not an employer under the statute.
       {¶ 17} New Delphi appealed, and we accepted jurisdiction on two
propositions of law. 151 Ohio St.3d 1452, 2017-Ohio-8842, 87 N.E.3d 221. The
first proposition challenges the trial court’s construction of the term employer under
R.C. 4141.01(A)(1)(a). The second asserts that “the time of the transfer” under
R.C. 4141.24(G)(1) “means the point at which the trade or business transfers to the
transferee, not an indefinite period of undefined length subsequent thereto.”
       {¶ 18} We first take up New Delphi’s second proposition of law. Because
our resolution of that proposition in New Delphi’s favor resolves the case, we do
not reach New Delphi’s first proposition of law.
                            “At the time of the transfer”
       {¶ 19} This case turns on the statutory meaning of the phrase “at the time
of the transfer.” Because context is critical, we return to the language of the statute:


               If an employer transfers its trade or business, or a portion
       thereof, to another employer and, at the time of the transfer, both
       employers      are    under    substantially    common       ownership,
       management, or control, then the unemployment experience
       attributable to the transferred trade or business, or portion thereof,
       shall be transferred to the employer to whom the business is so



                                           7
                             SUPREME COURT OF OHIO




       transferred.    The director shall recalculate the rates of both
       employers and those rates shall be effective immediately upon the
       date of the transfer of the trade or business.


(Emphasis added.) R.C. 4141.24(G)(1).
       {¶ 20} The state asserts that the “time of the transfer” encompasses the
entire time frame necessary to complete all phases of the contemplated business
conversion, which could be a weeks- or months-long process. In this view, because
the management group that controlled Old Delphi at the beginning of the transition
period ended up controlling New Delphi at the end of the transition period, the two
entities were under the same management “at the time of the transfer.” New Delphi,
on the other hand, contends that the provision contemplates concurrent, shared
control of both employers when the legal transfer of assets is effectuated. We have
little difficulty concluding that the plain language of the statute supports New
Delphi’s reading.
       {¶ 21} In reaching a contrary conclusion, the court of appeals relied upon a
dictionary definition of “time” as “ ‘[a] particular period indicated or characterized
in some way, either explicitly (usu. with of) or by anaphoric reference (as at the
time, etc.).’ ” (Boldface added in Delphi.) 2017-Ohio-809 at ¶ 17, citing Oxford
English Dictionary (online Ed.Sept. 2016). But the same dictionary relied upon by
the court of appeals offers numerous other definitions, including “the moment or
point of time at which something happens.”              Oxford English Dictionary,
https://www.oed.com/viewdictionaryentry/Entry/202100 (accessed Apr. 9, 2020)
[https://perma.cc/GY2M-73LR]. Similarly, Webster’s Third New International
Dictionary offers multiple definitions of “time,” including “a period during which
something * * * exists,” “a point or period when something occurs : the moment of
an event,” and “a definite moment, hour, day or year as indicated or fixed by a clock
or calendar.” Webster’s Third New International Dictionary 2394 (2002). The



                                          8
                                January Term, 2020




point is, each side can point to dictionary definitions to support its preferred
reading. To decide which reading is correct, we need to look at how the word is
used within the context of the statutory text. Great Lakes Bar Control, Inc. v. Testa,
156 Ohio St.3d 199, 2018-Ohio-5207, 124 N.E.3d 803, ¶ 8-9; Scalia & Garner,
Reading Law: The Interpretation of Legal Texts 56 (2012) (“words are given
meaning by their context”).
       {¶ 22} In adopting an expansive understanding of the statutory phrase, the
court of appeals found it significant that when we use phrases like “at the time of
the American Revolution,” we are referring to a period—or span—of time. But in
that context, that makes sense. We don’t think of the American Revolution as a
discrete event that happened at one moment in time; rather, most people think about
the American Revolution as encompassing a multiyear stretch roughly from the
signing of the Declaration of Independence to the signing of the Treaty of Paris.
       {¶ 23} In other contexts, however, when we use the phrase “at the time of,”
it is clear that we are speaking of a discrete moment in time. For example, one
might say, “At the time of my scheduled court appearance, I was stuck in traffic.”
In that context, no one would think that the speaker was referring to a span of hours
or days or weeks but rather to the exact moment that he was supposed to be in court.
“At the time of the American Revolution” may mean a period of time spanning a
number of years, but if we were to say, “Thomas Jefferson was napping at the time
of John Hancock’s signing of the Declaration of Independence,” we would almost
certainly be referring to a precise point in time on August 2, 1776. Thus, to
understand the meaning of the phrase “at the time of,” we need to understand the
surrounding words and the purpose for which the phrase is used.
       {¶ 24} At issue here is “at the time of the transfer.” Importantly, we are
dealing with a phrase from a statute, a legal text. And in the legal context, there is
a precise time at which the transfer of a business occurs. This is made clear by the
second sentence in the mandatory-transfer provision, which states that the



                                          9
                              SUPREME COURT OF OHIO




applicable tax rate shall be effective “immediately upon the date of the transfer of
the trade or business.” R.C. 4141.24(G)(1). By mandating that the tax rate be
applied “immediately upon the date of the transfer,” id., the legislature plainly
indicated that it understood transfers of business ownership to occur at a precise
time, rather than over a period of weeks. Were we to conclude otherwise and adopt
the court of appeals’ conclusion that the business was transferred over a multiday
period, it would be impossible to apply the statute’s requirement that the tax be
effective “upon the date of transfer,” id.
       {¶ 25} The state’s own administrative rules reflect the idea that there is a
definite date of transfer. See, e.g., Ohio Adm.Code 4141-17-05(D) (providing that
the transferee is liable for unemployment-compensation benefits paid “after the
effective date of the transfer”); Ohio Adm.Code 4141-17-05(E) (stating that the
contribution rates for the transferor and transferee “shall be effective the date of the
transfer”). Indeed, without such an understanding, the scheme would be almost
impossible to administer: who could know what tax is owed when and by whom
and who is responsible for other legal obligations, without some clear demarcation
of when the transfer of the business occurred?
       {¶ 26} Further support for New Delphi’s reading of the statute is found in
the statute’s mandate that the prior owner’s tax rate be imposed if “at the time of
the transfer, both employers are under substantially common ownership,
management, or control.” (Emphasis added.) R.C. 4141.24(G)(1). The use of the
present tense indicates that the common ownership, management, or control must
be concurrent—in other words, that both employers simultaneously are under the
same ownership, management, or control. See, e.g., Continental Hydraulics, Inc.
v. Dept. of Emp. & Economic Dev., 832 N.W.2d 298, 301 (C.A.Minn.2013) (“Use
of the present tense suggests a temporal requirement—that the common
management or control must be concurrent”).




                                             10
                                January Term, 2020




       {¶ 27} The evidence is undisputed that at the time of the transfer (October
6, 2009), Old Delphi was a wholly owned subsidiary of Delphi Corporation, while
New Delphi was owned, managed, and controlled entirely by the hedge funds.
When the transfer occurred, the two entities did not share any common ownership,
management, or control. Thus, by its plain terms, the mandatory-transfer provision
of R.C. 4141.24(G)(1) does not apply. The court of appeals erred in concluding
otherwise.
                                    Conclusion
       {¶ 28} We adopt New Delphi’s second proposition of law and hold that the
language in R.C. 4141.24(G)(1) requires concurrent ownership, management, or
control of both employers at the time that the business or trade is transferred. As
our resolution of New Delphi’s second proposition of law resolves the case, we
decline to address its first proposition of law. We reverse the decision of the Tenth
District Court of Appeals and reinstate the judgment of the Franklin County Court
of Common Pleas.
                                                                  Judgment reversed
                                                and trial court’s judgment reinstated.
       O’CONNOR, C.J., and KENNEDY, CARR, FISCHER, DONNELLY, and
STEWART, JJ., concur.
       FISCHER, J., concurs, with an opinion.
       DONNA J. CARR, J., of the Ninth District Court of Appeals, sitting for
FRENCH, J.
                               _________________
       FISCHER, J., concurring.
       {¶ 29} I fully and respectfully agree with the opinion of the court. I write
separately, however, to point out what I see as another basis for the court’s
conclusion today: common sense. After all, “[t]he rules of legal interpretation are




                                         11
                            SUPREME COURT OF OHIO




rules of common sense, adopted by the courts in the construction of laws.”
(Emphasis sic.) The Federalist No. 83 at 496 (Rossiter Ed.1961).
       {¶ 30} The law before us, R.C. 4141.24(G)(1), says that it applies only
when “at the time of the transfer, both employers are under substantially common
ownership, management, or control.”
       {¶ 31} Appellee, the Ohio Department of Job and Family Services, argues
that this law applies to appellant, Delphi Automotive Systems, L.L.C. (“New
Delphi”), based on New Delphi’s acquisition of certain assets from Old Delphi.
However, New Delphi acquired the assets that allegedly triggered the application
of R.C. 4141.24(G)(1) via the bankruptcy process. Given that fact and the record
in this case, common sense tells us that R.C. 4141.24(G)(1) does not apply here.
       {¶ 32} As a part of Old Delphi’s trip through the bankruptcy system, Old
Delphi reached an agreement with its creditors, including New Delphi, under which
the creditors would take the distressed company’s assets free and clear. That
agreement was memorialized in the form of a document titled “Master Disposition
Agreement.” Importantly, that agreement tells us that the transfer took place at a
discrete moment in time—the closing—and that New Delphi and Old Delphi were
not under “common ownership, management, or control,” R.C. 4141.24(G)(1), at
that time.
       {¶ 33} If there were any lingering doubts, the United States Bankruptcy
Court for the Southern District of New York confirmed these realities when it
reviewed the Master Disposition Agreement and approved the sale of Old Delphi’s
assets. In re Delphi Corp., Bankr.S.D.N.Y. No. 05-4481, 2009-WL-2482146 (July
30, 2009). In doing so, the bankruptcy court specifically found that the deal took
place at an arm’s length, meaning that none of the entities involved were affiliated
with each other in any way or controlled by the same directors, officers, or
managers. Id. at *7. That court also acknowledged that New Delphi was not “a
mere continuation” of Old Delphi, id. at *9, and that there was “no continuity of



                                        12
                               January Term, 2020




ownership or enterprise between any of the Purchasing Entities and the Debtors.”
(Emphasis added). Id.
       {¶ 34} The record in this case makes it abundantly clear then that at the
discrete moment in time when the transfer at issue occurred, New Delphi and Old
Delphi were not under “common ownership, management, or control,” R.C.
4141.24(G)(1).
       {¶ 35} Thus, in addition to the reasons stated in the majority opinion,
common sense dictates the conclusion that R.C. 4141.24(G)(1) is inapplicable here.
Therefore, I respectfully concur.
                               _________________
       Vorys, Sater, Seymour & Pease, L.L.P., Michael J. Ball, Daniel E. Shuey,
and Jonathan R. Vaughn, for appellant.
       Dave Yost, Attorney General, Michael J. Hendershot, Chief Deputy
Solicitor, Benjamin M. Flowers, Diane Richards Brey, and Stephen P. Carney,
Deputy Solicitors, and Eric A. Baum Jr., Assistant Attorney General, for appellee.
                               _________________




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