Archives for 2013

High Court Will Determine Ohioans Right to Challenge JobsOhio

1851 Center argues that state taxpayers maintain standing to challenge the constitutionality of Corporate Welfare

Columbus, OH – The Supreme Court of Ohio heard arguments on January 23 to determine the extent to which Ohioans may take legal action to force state government to comply with constitutional spending, indebtedness, and corporate welfare constraints.

The 1851 Center for Constitutional Law has spearheaded the litigation, briefing and arguing the merits of the position that the Ohio Constitution demands broad access to the courts for taxpayers seeking to enforce the Ohio Constitution’s structural restraints on government. The Center had originally submitted to the Ohio Supreme Court a “friend of the court” brief asserting that Progress Ohio and other left-wing challengers must be found to have taxpayer and “public interest” standing to challenge the constitutionality of Governor Kasich’s JobsOhio legislation.

The 1851 Center asserts that if Ohio’s high court gives a pass to lower court rulings that Progress Ohio does not possess standing in this case, the Court will essentially bar all Ohioans from enforcing the Ohio Constitution’s stringent spending, debt, and “anti-corporate-welfare” provisions, effectively rending these provisions unenforceable.

The JobsOhio legislation sets up a special public-private corporation to invest public funds in select private corporations without transparency. The challengers contend (1) these features violate the Ohio Constitution’s prohibitions on corporate welfare and state spending and indebtedness (contained in Articles 8 and 13); and (2) the General Assembly has unconstitutionally attempted to insulate JobsOhio from judicial scrutiny by including a provision that essentially prohibits any legal actions from being brought to challenge it.

Lower courts refused to consider these serious constitutional claims, flippantly concluding that Progress Ohio has no standing (the right to sue in Court) because it does not have a sufficiently “personal stake” in enforcement of the state constitution; and further because enforcement of the constitution’s spending, debt, and corporate welfare limits are not a sufficiently important public interest to warrant an exemption from this personal stake requirement.

The 1851 Center’s initial brief, which takes no position on the substantive issue – – the constitutionality of JobsOhio – – asserts the following:

  • The Ohio Constitution demands that citizens and taxpayers maintain standing to enforce limits on tax, spending, and indebtedness legislation.
  • The lower courts in this case erred in relying on federal standing cases, which are centered on Article III of the federal constitution, because the language of the Ohio Constitution deliberately rejects such barriers to standing in Ohio, and contains no jurisdictional prohibition on taxpayers and citizens bringing public interest actions.
  • Enforcing well-defined constitutional limits on state spending, indebtedness, and governmental conferral of special corporate privilege is “of great importance and interest to the public.”
  • Ohioans’ stake in enforcement of their constitution is sufficiently personal to maintain standing to enforce constitutional limits on state government’s spending, indebtedness, and provision of special corporate privileges.
  • If Ohioans are required to have a “personal stake” in such actions beyond their role as citizens and taxpayers, as the lower courts require in this case, then no Ohioan will have the capacity to enforce these general spending, debt and corporate welfare limits, and Courts will have rendered those provisions effectively unenforceable.

“While we may not agree with Progress Ohio’s politics, we certainly believe that they, like all Ohioans, must have standing to defend the Ohio Constitution in court, if that document is to remain enforceable,” said Maurice Thompson, Executive Director of the 1851 Center for Constitutional Law. “By requiring a ‘personal stake’ in a matter upon which all Ohioans are harmed relatively equally, such as state spending, indebtedness, and corporate welfare, Ohio courts are pulling the rug out from under these key constitutional limitations on government, and placing their own preference for abstaining from the hard work of enforcing the constitution above them. Such decisions cannot stand, if these important limits on government are to be enforceable going forward.”

Continued Thompson, “The Ohio Supreme Court’s decision in this case needs to acknowledge that when courts strip Ohioans’ of the right to enforce constitutional limits on government in court, they essentially redact those constitutional limits through procedural artifice. Ohio judges should enforce, not redact, the Ohio Constitution”

Read the 1851 Center’s initial Brief in this case HERE.

November 7, 2013: Columbus Dispatch: Supreme Court to decide who has the right to sue JobsOhio

November 6, 2013: WKSU NPR 89.7: Ohio Supreme Court hears first round of arguments in JobsOhio [AUDIO]

November 6, 2013: NBC 4: Foes Of Ohio Job-Creation Board Seek Right To Sue [VIDEO]

March 15, 2013: Ohio Watchdog: Court rejects basis for democracy in JobsOhio case

March 11, 2013: WBNS-10TV: Ohio Auditor Asks To See The Books For JobsOhio [VIDEO]

March 8, 2013: The Plain Dealer: Auditor’s authority to check JobsOhio books sparks dispute with Gov. John Kasich

February 26, 2013: Ohio Christian Alliance: The Important Issue of Judicial Standing with Maurice Thompson of the 1851 Law Center [AUDIO]

February 17, 2013: Dayton Daily News: ‘Activist’ Kasich getting mixed reviews

February 5, 2013: The Lima News: Editorial: JobsOhio delays irk Kasich

February 3, 2013: The Repository: Genesis of proposal doesn’t bode well for coming debate

January 31, 2013: Columbus Dispatch: Kasich says critics will answer to God

January 31, 2013: Media Trackers Ohio: Governor Kasich Blasts Conservative, Liberal Foes of JobsOhio as “Nihilists”

January 31, 2013: Columbus Business First: Kasich: JobsOhio foes threaten ‘wrecking’ state’s economy

January 31, 2013: Cincinnati.com: Kasich blasts supporters of JobsOhio lawsuit

January 23, 2013: Houston Chronicle: High court to decide group’s right to sue JobsOhio

January 23, 2013: Columbus Dispatch: State justices to assess legality of JobsOhio suit

Eminent Domain Abuse Continuing Along Ohio Pipeline Route

1851 Center stops abuse in Licking County, offers free assistance to property owners threatened with taking of property by private pipeline corporation

farmColumbus, OH – The 1851 Center for Constitutional Law today condemned a private pipeline corporation’s continued assertion of legal authority to take Ohioans’ private property for its own benefit, and threatened litigation, should the corporation not discontinue. In addition, the Center (1) made public its analysis demonstrating a lack of such authority; (2) disclosed that the corporation has immediately backed down from its threats once confronted with 1851 analysis; and (3) offered free legal representation to all owners threatened with a taking of their private property.

Enterprise Liquid Pipelines, a Texas-based corporation amongst the world’s largest pipeline companies, to construct the Appalachia to Texas (“ATEX”) Pipeline across the state, claims that it — by itself and without government approval — can take Ohioans’ homes and land pursuant to an arcane Ohio statute. Enterprise is relying on Ohio Revised Code Section 1723.01, which at first blush appears to permit certain private pipeline companies to “appropriate so much land. . . as is deemed necessary. . . for the laying down of pipes.”

In a November 27, 2012 formal statutory notice to farmer Dave Bonifant, Enterprise threatened “the property you own . . . is within the proposed route of the pipeline,” “Enterprise will exercise its eminent domain authority to appropriate your property,” and “Enterprise will exercise its eminent domain authority through a court proceeding if you and it are unable to reach an agreement.” In the same letter, Enterprise claimed that the fair market value of Mr. Bonifant’s property was just “$5,500.”

In its December 17, 2012 response on behalf of Mr. Bonifant and several others, the 1851 Center exhaustively outlines why the Ohio Constitution denies appropriation authority to the pipeline project.

The 1851 Center’s legal memorandum includes the following analysis:

  • R.C. 1723.01 does not apply to ethane pipelines. While R.C. 1723.01 authorizes the use of eminent domain, in some cases “for transporting natural or artificial gas, petroleum, coal or its derivatives, water, or electricity, through tubing, pipes, or conduits,” etc., the ATEX pipeline does not transport any of these. Rather, it transports ethane, which Enterprise describes as a “liquid,” that is “derived from the natural gas extraction process.”
  • ELP, through the ATEX, is not a “public utility. Due to Senate Bill 315’s amendments to R.C. 4905 in June of 2012, ELP is clearly not a “public utility.”
  • The Ohio Constitution requires that any taking of property be for “public use. The Ohio Supreme Court has explained that “even under * * * a deferential standard * * * public use is not established as a matter of law whenever the legislative body acts.” Instead, “defining the parameters of the power of eminent domain is a judicial function, and [Ohio courts] remain free to define the proper limits of the doctrine.”
  • Economic benefits to private interests are not “public uses.” In Norwood v. Horney, the Supreme Court of Ohio recently affirmed private uses for private gain are not public uses, explaining “we have never found economic benefits alone to be a sufficient public use for a valid taking;” [t]o justify the exercise of eminent domain solely on the basis of the fact that the use of that property by a private entity seeking its own profit might contribute to the economy’s health is to render impotent our constitutional limitations on the government’s power of eminent domain;” “economic development by itself is not a sufficient public use to satisfy a taking;” and “[w]e hold that an economic or financial benefit alone is insufficient to satisfy the public-use requirement of Section 19, Article I. In light of that holding, “any taking based solely on financial gain is void as a matter of law.” Thus, the economic benefits of the ATEX Pipeline alone would not appear to justify appropriation of private property.
  • The public will not possess or otherwise use the ATEX Pipeline.In Pontiac Improvement Co. v. Board of Com’rs of Cleveland Metropolitan Park Dst., the Supreme Court of Ohio indicated that the use must always be a public use, and the land or the interest therein must be taken by the public. Where private property is taken against the will of the owner under the power of eminent domain, it is a prerequisite that possession, occupation, and enjoyment of the property by the public, or by public agencies, is sought and is necessary;” and “‘[p]ublic use means the same as use by the public.” The ATEX, however, will not be possessed or used by the public, but will instead be privately owned, operated, and possessed, solely for the benefit of Enterprise and several large natural gas producers.
  • Taking property to advance the ATEX Pipeline is not “necessary.”In addition to being for a “public use,” the Ohio Constitution requires that takings be “necessary.”Similar pipelines are being built in Ohio without the use of eminent domain. As the Supreme Court of Ohio explained in Cooper v. Williams, “[i]t is only this great and common benefit to all the people alike that creates a necessity authorizing and justifying the seizure.”

In response to this analysis, Enterprise has refrained from following through with the threatened legal action against Licking County property owners. Instead, Enterprise responded by first offering Mr. Bonifant a six-figure dollar amount for his “$5,500” property before altering the route to avoid Mr. Bonifant’s property altogether, as he had consistently requested.

However, Enterprise continues to use the threat of eminent domain to gain leverage over Ohioans along the ATEX route.

“Ultimately, any Ohio statute attempting to convey eminent domain authority to a purely private corporation should be repealed. The entire purpose of a constitution is to prevent government from taking private property from the politically weak and transferring it to well-connected special interests. Yet that his precisely what this statute enables,” explained 1851 Center Executive Director Maurice Thompson. “The abuse along the ATEX is a prime example of what can happen to Ohio property owners when such a statute remains on the books.”

“And while we fully support this pipeline project, and the continued development of oil and gas reserves in eastern Ohio,” continued Thompson, “the very thing that makes private enterprise possible is respect for private property rights – – the Ohio Constitution does not enable private parties to take Ohioans homes and land, simply to improve their own profit margins.”

The 1851 Center draws a distinction between takings for pipelines facilitating home heating or energy independence and pipelines for purely private commercial interests. While public utilities may exercise eminent domain to provide service to Ohioans homes, and certain oil and gas pipelines may even possess eminent domain authority, the ATEX is set to haul Ethane — a chemical byproduct of fracking later used to manufacture consumer plastics — across the state. ELP intends to save money by constructing a pipeline rather than channeling the ethane to their Texas-based facilities by truck or rail. The pipeline remains submerged through the entire state, provides no service to Ohioans, and maintains the same legal status as would a pipeline for milk, bottled water, or chocolate.

“At minimum, Enterprise is using the false threat of eminent domain to intimidate Ohio property owners into accepting below-market settlements for their land,” added Thompson. “Ohioans should be aware of this ploy.”

Compounding the matter, in a March 28, 2012 letter to property owners, Enterprise claimed to have eminent domain authority by virtue of its status “as a public utility.” However, Senate Bill 315, enacted in June of 2012, clarified that such operators are clearly not public utilities. Enterprise has not corrected itself and nevertheless continued to threaten homeowners who may have been misled as to Enterprise’s status.

Meanwhile, many eminent domain attorneys hired by property owners have incentives to work in implicit cooperation with the pipeline: a typical attorneys fees agreement to negotiate a pipeline taking provides that the attorney is only paid if the client eventually sells his or her property to the pipeline company. Accordingly, many attorneys summarily advise their clients that Enterprise does indeed maintain eminent domain authority, and that they have no choice but to sell.

The ATEX is set to begin in Jefferson County, Ohio, along the Ohio River, and after crossing the state south of Columbus, exit Ohio through Butler County.

The 1851 Center is offering free representation to homeowners who object to the taking of their private property by Enterprise.

Read the 1851 Center’s full legal memorandum to Enterprise Liquid Pipelines HERE.

April 1, 2013: Farm and Dairy: Licking County landowner fights pipeline and appears to have won

February 2, 2013: The Buckeye Lake Beacon: Help offered to pipeline opponents

January 23, 2013: Ohio Watchdog: Ohio lawyer offers free aid to stop pipeline land seizures

Ohio Constitution Prohibits Legislators from Enacting State Insurance Mandates

Legal center advises Ohio legislators that mandating health treatments and benefits violates Ohio’s Health Care Freedom Amendment

administrativelyColumbus, OH – The 1851 Center for Constitutional Law today emphasized to Ohio’s state senators and representatives that the Ohio Health Care Freedom Amendment, added to Ohio’s Bill of Rights in late 2011, prohibits the state from mandating that Ohioans health insurance purchases include new previously-un-mandated benefits and services. The 1851 Center is the public interest law firm that drafted the Amendment and represents its advocates and sponsors.

The 1851 Center legal memorandum (“A Policymaker’s Guide to Following the Health Care Freedom Amendment“) comes in response to recent news of the Kasich Administration’s purported executive action attempting to mandate that all Ohioans purchase autism-related coverage. The memorandum observes that while the Governor’s action — simply a letter to the Obama Administration recommending that it impose autism coverage on Ohioans — may not be a forbidden “law or rule,” any state legislation will indeed violate the Amendment.

Specifically, the memorandum explains that any state-based insurance mandate is highly likely to violate all three substantive provisions of the Amendment, while also transgressing its spirit and purpose:

  • Most mandates will compel participation in, through purchase of coverage for, a “health care system,” as that phrase is broadly defined in the Amendment. (Division (A) of Section 21, Article I).
  • Mandates necessarily prohibit the purchase of insurance coverage without the newly-mandated coverage. (Division (B) of Section 21, Article I).
  • Mandates impermissibly sanction those who sell or purchase private health care insurance without also purchasing the newly-mandated coverage. (Division (C) of Section 21, Article I).

“State-based health insurance mandates are one of the primary drivers of the increased cost of health insurance premiums in Ohio,” said Maurice Thompson, Executive Director of the 1851 Center. “ We drafted the Health Care Freedom Amendment keenly aware of this problem, and with the full intention of stopping this practice, while further ensuring that the State of Ohio does not compound the challenges presented by Obamacare’s health care mandates and penalties.”

The memorandum further notes that the official “arguments for” the Amendment, approved by the Ohio Secretary of State and which appeared on Ohioans’ ballots, specified that the Amendment prohibited state government from forcing Ohioans “to pay more to upgrade your existing health insurance to meet government requirements,” and would “[p]rohibit government from forcing you into government insurance or medical treatment you don’t want.”

Finally, the memorandum observes that “[i]f the purpose behind the mandate is to provide access for those who cannot afford certain types of health treatments or products, then the mandate is a poorly-adapted policy solution,” because mandates conceal state spending and constitute a hidden tax, impose a one-size-fits all system in a world of varying health care needs, do not provide benefits on the basis of need, and impose greater hardships on small business and individuals than others.

Added Thompson, “although many of Ohio’s elected leaders opposed the federal health care mandate and supported our Amendment, six individual health insurance mandates were introduced during Ohio’s last legislative session. As the legislature begins a new session, it is our hope that clarifying the application of the Health Care Freedom Amendment to state mandates may avert unconstitutional legislation and subsequent litigation.”

Read “A Policymaker’s Guide to Following the Health Care Freedom Amendment” HERE.

Learn more about the Health Care Freedom Amendment HERE.

Listen to Maurice Thompson discuss the trouble with state health insurance mandates

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January 26, 2013: Toledo Watch: Autism coverage plan may violate Ohio Constitution’s newest amendment

January 14, 2013: Brian Thomas Morning Show on 55KRC Radio:

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January 10, 2013: Heartland.org: Without State Exchange, Ohio Small Businesses Have Standing to Sue IRS

January 9, 2013: NBC4i: Gov. Kasich Signs Directive Mandating Coverage For Autism [VIDEO]