Obamacare in Ohio: Outcome of Wednesday’s Supreme Court Argument Will Be Pivotal

Prescription drugsColumbus, OH – On Wednesday March 4, the U.S. Supreme Court will hear its latest challenge to the Affordable Care Act – – this time a challenge to how the President and the IRS are enforcing the law. If that challenge prevails, both the ACA’s employer mandate and tax credits to individuals will be forbidden in Ohio, because Ohio’s Health Care Freedom Amendment prohibits the state from establishing a state exchange.

Should Governor Kasich still move to establish a state based Obamacare exchange, the 1851 Center is prepared to take legal action to stop it.

The Lawsuit: King v. Burwell

The lawsuit, King v. Burwell, addresses one of the ACA’s cornerstones: the insurance exchanges created by Obamacare. More specifically, the questions revolves around the IRS’s interpretation of a provision of the law that authorizes tax credits for health insurance purchased through an exchange “established by the state.”

Section 1401 of the ACA offers health-insurance “tax credits” to certain taxpayers who enroll in a qualified health plan “through an Exchange established by the State.”

Pursuant to this Section, Obamacare creates “premium assistance,” taxes credits and subsidies, to offset the costs of health insurance premiums that all agree Obamacare causes. Essentially, these tax credits and subsidies were designed to mask the full extent of outlandish cost increases imposed on health insurance producers and consumers by the Act. However, they also comprise the bulk of the hundreds of billions of dollars in federal spending triggered by Obamacare.

When 36 states chose not to establish their own exchanges, the federal government stepped in and created federally run exchanges in those states. The IRS then extended the tax credits for insurance purchased through the federally run exchanges – an interpretation that directly violates the plain language of the law, and subjects employers in these states to the “employer mandate” – – a $3,000 penalty that is assessed each time one of its employees purchases subsidized health insurance through an exchange.

The challengers argue, quite reasonably, that the statute limits the tax credits and subsidies to state established Exchanges in a manner that is plain and unambiguous, and that the remainder of the ACA and its legislative history are fully consistent with those provisions. The Obama administration responds that the phrase “through an Exchange established by the State” includes federally established exchanges and, alternatively, that the statute is vague enough to allow the executive branch to decide whether (or not) to offer subsidies in federal exchanges.

The challengers have a high likelihood of prevailing, given the Administration’s weak arguments. If they do, insofar as the IRS has sought to provide tax credits for the purchase of health insurance in federally established Exchanges such as Ohio, its actions are contrary to law and must be set aside. This means subsidies for those using the ACA exchange would be unavailable to Ohioans, but also that Ohio employers would not be sanctioned.

A State Based Exchange: Forbidden in Ohio

On February 19, Governor Kasich indicated to Bloomberg that he was “open to” establishing an Ohio-based ACA exchange. Such an exchange would cost Ohioans millions, while spending billions to subsidize purchases of health insurance pursuant to the ACA, and imposing the otherwise-forbidden ACA employer mandate on Ohio employers.

However, with the overwhelming passage of Issue 3 in November of 2011, Ohioans created a likely-insurmountable legal hurdle to state officials implementing Obamacare in Ohio through a state-based ACA exchange.

As the 1851 Center explained in March of 2012, Ohio’s Health Care Freedom Amendment forbids the state from establishing a state-based ACA exchange. Under the Amendment, the state of Ohio may not (1) indirectly compel participation in a health care system; (2) prohibit the purchase or sale of health insurance; or (3) impose a penalty for the sale or purchase of health insurance.

Under implementation of an ACA exchange, the state would be voluntarily using state resources to attempt to do all three. For example:

  • Though establishing an exchange, Ohio would be voluntarily assuming responsibility for enforcing the individual mandate, volunteering to use state officials and resources to turn in those who may not have “minimum essential coverage” to the federal government as defined by HHS. This indirectly compels Ohioans to participate in ACA, in violation of Section (A) of the Health Care Freedom Amendment.
  • Though establishing an exchange, Ohio would be imposing the “employer mandate,” a penalty of up to $3,000 per employee that must otherwise be paid to the federal government by Ohio employers who do not provide government-approved health care insurance for their employees.

In November of 2012, Cato Institute health care policy expert Michael Cannon echoed the 1851 Center’s findings:

“operating an Obamacare exchange would violate the state’s constitution . . . In order to operate an exchange, Ohio employees would have to determine eligibility for ObamaCare’s “premium assistance tax credits.” Those tax credits trigger penalties against employers (under the employer mandate) and residents (under the individual mandate). In addition, Ohio employees would have to determine whether employers’ health benefits are “affordable.” A negative determination results in fines against the employer. These are key functions of an exchange. Ergo, if Ohio passes a law establishing an exchange, then that law would violate the state’s constitution by indirectly compelling employers and individual residents to participate in a health care system. That sort of law seems precisely what Section 21 exists to prevent.”

Case Western law professor Jonathan Adler concurred, responding to news that Governor Kasich may attempt a state-based exchange to salvage the ACA in Ohio by explaining “tax credit eligibility triggers employer mandate and slides more people to individual mandate penalty.”

This would also be true in, at minimum, all states with a Health Care Freedom Amendment or Act (including Alabama, Arizona, Georgia, Idaho, Indiana, Kansas, Louisiana, Missouri, Montana, Oklahoma, Tennessee, Utah, and Virginia).

Without State-Based Exchanges in Ohio and Other States: Collapse or Reform

Without state-based exchanges, Obamacare will be significantly more difficult to enforce, dramatically enhancing the probability that the Act will be “re-opened” to debate amendment or repeal.

In the interim, Ohioans who sign up through the federal Obamacare exchange would lose “premium assistance,” a taxpayer-funded subsidy/tax credit to individuals that masks the true increased costs of health insurance premiums imposed by Obamacare. Without tax credits to support the ACA’s inflated insurance costs, there may be some initial disarray for the roughly 234,000 Ohioans who have purchased subsidized health insurance through the federal exchange. (These are Ohioans who are not eligible for Medicaid, with incomes between 100 and 400 percent of the Federal Poverty Level.)

However, this federal spending will be blocked, and the clamor for repeal will be immediate if states refuse to establish exchanges. (This is because Americans would be threatened with experiencing the full effect of the cost increases imposed by Obamacare.)

Further, Ohio employers will be exempt from the damaging employer mandate.

According to 1851 Center Director Maurice Thompson, “Any state that creates an Obamacare exchange is ultimately voluntarily choosing to enforce Obamacare and its mandates and restrictions on freedom of choice, while simultaneously reducing the chance that Obamacare will repealed or rewritten.”

Thompson suggests that legal action would be appropriate to stop the exchange, should Governor Kasich move to establish one, and that the 1851 Center is prepared to take it.

Read the entire report: Does Ohio’s Health Care Freedom Amendment Prohibit it from Imposing an Obamacare Exchange?

 

March 4, 2015: The Plain Dealer: Obamacare case before Supreme Court could lead to chaos, advocates say

March 3, 2015: 610 WTVN: Maurice Thompson’s radio interview with Joel Riley [AUDIO]

March 3, 2015: WCBE 90.5 FM: Federal Court Case On ACA Subsidies Could Affect 235,000 Ohioans

March 3, 2015: Fierce Health Payer: Past amendments could prohibit states from establishing exchanges

March 2, 2015: National Journal: Those Obamacare Nullification Amendments Could Make a Big Comeback Post-SCOTUS

Ohio High Court Rebukes School District Tax Increase

Taxpayers cheated by Indian Hill School District’s “Inside Millage Move”, by raising taxes without public vote

school bus picking up kidsCincinnati – Indian Hill School District’s property tax increase without voter permission violated state law, according to unanimous ruling late yesterday from the Supreme Court of Ohio.

This decision rebuffs Ohio school districts’ efforts to take advantage of a legal loophole created in 1998, which appeared to allow such tax increases in limited circumstances, though not to collect tax revenue that the districts do not need or use, as they run considerable budget surpluses and stockpile cash reserves.

The 1851 Center for Constitutional Law asserted, on behalf of the taxpayers and homeowners of the Indian Hill School District, that the District violated state law in 2009 when it raised property taxes by 1.25 mills ($400 per year, on average, for Indian Hill households), without voter permission, while already, without the tax increase, running multi-million dollar budget surpluses and maintaining a free and clear cash reserve of over $25 million.

The case centered around Ohio Revised Code Section 5705.341, which provides “no tax rate shall be levied above that necessary to produce the revenue needed by the taxing district or political subdivision for the ensuing fiscal year,” and “Nothing . . . shall permit . . . the levying of any rate of taxation . . . unless such rate of taxation for the ensuing fiscal year is clearly required by a budget of the taxing district.”

The case also drew upon Section 2, Article XII of the Ohio Constitution, which forbids property taxation “in excess of one per cent of its true value in money for all state and local purposes,” except by approval of the voters.

Indian Hill raised taxes despite carrying an unencumbered surplus of over $25 million in its bank account at the time.

The Court’s decision, authored by Justice O’Neill, explains “far from defraying current operating expenses, the increased revenue from the outside mills padded the district’s surplus. To permit a tax increase that performs no function other than to increase the amount of budget surplus would deprive the ‘clearly required’ standard of all meaning.”

“The Court’s decision means that already-wealthy Ohio school districts cannot continue to use public budgeting gimmicks to raise property taxes without a vote. This decision protects taxpayers here and also in many other districts,” said Maurice Thompson, Executive Director of the 1851 Center for Constitutional Law.

“While running exorbitant budget surpluses and maintaining a thick bank account may echo fiscal responsibility to some, this means the school district is taking from taxpayers money that it does not need – – over-taxing them rather than allowing them to keep and use their own money for their families’ betterment.”

The 1851 Center will now litigate to recoup for the taxpayers the roughly six million dollars that Indian Hill School District wrongfully charged them between 2010 and 2014.

The Court’s Decision can be found HERE.

Oral Arguments from the case can be viewed HERE.

 


March 12, 2015: Cincinnati.com: Indian Hill Board stonewalls refund of inside millage tax

December 14, 2014: Sandusky Register: Court: Some schools’ inside millage moves could be illegal

December 4, 2014: Cincinnati.com: Court ruling could reduce property taxes in Indian Hill

Two Ohio Supreme Court Justices Rule for Top Donors Over 88 Percent of the Time

Justice French ruled for Constitutionally Limited Government in Zero of Eight Critical Cases, Justice Kennedy in Five of Eight

ohio supreme court judgesColumbus, OH – The 1851 Center for Constitutional Law today shared research previously prepared for various citizen groups demonstrating that (1) Ohio Supreme Court Justice Judith French ruled for constitutionally limited government on zero of the eight critical occasions examined, while Justice Sharon Kennedy has ruled so on five of those eight occasions; and (2) Justice French has ruled in favor of her top 20 campaign contributors, when they have appeared before her, 91 percent of the time, while Justice Kennedy has ruled so 88 percent of the time.

The findings are prepared in response to citizen inquiries that have arisen as citizens are attempting to educate themselves on judges prior to the election.

“The Ohio Constitution is more protective of rights than the federal constitution, but Ohio’s judges aren’t enforcing it as such,” said Maurice Thompson, Executive Director of the 1851 Center. “We shouldn’t have to go to federal court every time we are serious about enforcing limits on government, or afraid that we will face a politically-connected opposition; but our high court will only improve if Ohioans are sufficiently educated on it.”

Justice French was appointed by Governor Kasich to replace the retiring Justice Stratton in late 2012. A summary of the 1851 Center’s findings regarding her rulings for and against constitutionally limited government and her rulings’ alignment with her top campaign contributors, are as follows:

  • Justice French has ruled in a manner consistent with the protection of constitutional rights, advancement of liberty, and limiting of government in zero of the eight critical decisions identified.
  • Justice French has been highly unlikely to check abuse by state or local governments or powerful interest groups when given the opportunity, and this is consistent with her expressed philosophy of placing her personal views of judicial restraint and majority power above constitutional limits on government.
  • Top campaign contributors to Justice French appeared before her, directly as parties to the case, amicus curiae parties, or legal counsel for parties, on 43 occasions. Justice French ruled in favor of her top contributors on 39 of those occasions, or 91 percent of the time.
  • By comparison, fellow Republican Justice Pfeifer, who does not receive large campaign contributions, ruled in favor of Justice French’s top contributors in these same instances on only 21 of 41 occasions, or 51 percent of the time.
  • By comparison, Democrat Justice William O’Neill, who does not receive large campaign contributions, ruled in favor of Justice French’s top contributors in these same instances on only 26 of 43 occasions or 60 percent of the time.
  • Justice French ruled in favor of the law firms who made major contributions to her on 22 of the 24 occasions upon which they appeared before here, or 92 percent of the time.

Justice Kennedy defeated Justice Yvette McGee-Brown in late 2012. A summary of the 1851 Center’s findings regarding her rulings for and against constitutionally limited government and her rulings’ alignment with her top campaign contributors, are as follows:

  • Justice Kennedy ruled in a manner consistent with the protection of constitutional rights, advancement of liberty, and limiting of government in five of the eight critical cases identified.
  • Justice Kennedy has been highly likely to check abuse by local governments when given the opportunity.
  • Justice Kennedy has been unlikely to check abuse by the executive branch of state government and the powerful hospital lobby, when given the opportunity, and this somewhat differs from her expressed opposition to “government intrusion.”
  • Top campaign contributors to Justice Kennedy appeared before her, directly as parties to the case, amicus curiae parties, or legal counsel for parties, on 41 occasions. Justice Kennedy ruled in favor of her top contributors on 36 of those occasions, or 88 percent of the time.
  • By comparison, fellow Republican Justice Pfeifer, who does not receive large campaign contributions, ruled in favor of Justice Kennedy’s top contributors in these same instances on only 19 of 40 occasions, or 48 percent of the time.
  • By comparison, Democrat Justice William O’Neill, who does not receive large campaign contributions, ruled in favor of Justice Kennedy’s top contributors in these same instances on only 24 of 41 occasions or 59 percent of the time.
  • Justice Kennedy ruled in favor of law firms who made major contributions to her on 26 of the 30 occasions upon which they appeared before her, or 87 percent of the time.

As to issues, the 1851 Center’s findings demonstrate that when presented with the opportunity on critical cases of constitutional principle, Justice Kennedy supported religious liberty, free speech, property rights, government transparency, and political association and speech. In the same cases, Justice French opposed these principles.

Meanwhile both Justices, when presented with the opportunity, supported unilateral Affordable Care Act Medicaid Expansion by the Governor, supporting forced health care by state hospitals, refused to support parental rights to make health care decisions for their children, and supported citizen-taxpayer standing to enforce the structural limits on government.

As to the alignment “while we have observed what we view as some irregularities over the past few years, and expected to find a correlation between campaign contributions and case outcomes. We did not expect the correlation to be so stark,” added Thompson.

The 1851 Center analysis attempted to explain away this correlation by controlling for ideological alignment (i.e. “pro-business” views) and by comparing Justices French and Kennedy’s rulings with those of Justice Pfeifer (Republican) and O’Neill (Democrat), neither of whom accept significant campaign contributions. However, the analysis demonstrates that rate of rulings in favor of non-ideologically-aligned donors, such as law firms, are just as high. Meanwhile, Justices Pfeifer and O’Neill both vote for these same contributors significantly less frequently.

Thompson concluded “at this time, we don’t have an explanation for the high correlation; but we hope the Justices do. They should explain this rate to the public with something other than ‘we just call it as we see it.'”

Read The 1851 Center’s full research memorandum is available HERE.

Important Disclaimers: The 1851 Center for Constitutional Law does not support or oppose candidates, and nothing in this publication or elsewhere should be construed as an endorsement of or opposition to any candidate. We recognize that this research is released close to an election; however this is to collect the maximum number of data points, including very recent contributions to campaigns and decisions by the Ohio Supreme Court. We also recognize that we have not analyzed the records of the two Justices’ opponents; this is because we are institutionally committed to focusing on judicial incumbents with record that permit analysis – – neither challenger has a record as an appellate judge. We express no opinion on those merits of those opponents.

 

December 22, 2015: Cincinnati.com: Opinion: Red-light camera ruling a fail

Legal Centers to U.S. Supreme Court: Declare Ohio Precious Metals Dealers Licensing Scheme Unconstitutional

Act regulates business in response to constitutionally-protected advertising, and prohibits legitimate purchases of gold and silver, but Sixth Circuit bungled ruling

libertycoinsColumbus, OH – The 1851 Center for Constitutional Law and the Pacific Legal Foundation today petitioned the United States Supreme Court to stop enforcement of the “Ohio Precious Metals Dealers Act” against Ohio businesses because the Act imposes onerous regulations in response to advertising protected by the First Amendment.

The legal action is filed on behalf of Liberty Coins, a Delaware, Ohio coin dealer ordered by the Ohio Department of Commerce to cease all advertising indicating that it purchases gold and silver and all actual purchases of gold and silver, and threatened with a $10,000 fine and jail time if it does not comply.

The Supreme Court has repeatedly confirmed that First Amendment applies to “commercial speech,” which includes advertising. Nevertheless, the Ohio Department of Commerce in 2011 began vigorous enforcement of regulations prohibiting coin dealers from advertising without a license, and requiring a license if they do advertise (conditioned on a state finding of “good character and reputation”). Once licensed, state and local agents may search and seize any item or business record without a search warrant or finding of probable cause, and may do so on a daily basis.

In late 2012, Judge Michael Watson of the Columbus division of the Southern District of Ohio authored a 28-page decision enjoining the Act, explaining that “the Act only prohibits the unlicensed buying of precious metals when commercial speech is involved,” and emphasizing that “a broad injunction completely prohibiting enforcement of the licensing provision is warranted.”

The Court added that the Department of Commerce’s aggressive reading of the regulations was “nonsensical,” and that Ohio coin dealers and others “are unable to actually purchase precious metals without facing prosecution due to Defendants’ incorrect interpretation of the Act.”

However, a Sixth Circuit Court of Appeals panel of Democrat-appointees cursorily dismissed the view a “licensing statute” could be unconstitutional on any grounds, even if it in effect punishes and is triggered by speech protected by the United States Constitution.

The Circuit brushed aside the First Amendment implications of a regulation triggered by speech instead of conduct, on the grounds that the “PMDA is, first and foremost, a licensing statute,” further holding that states may always promulgate “economic regulations,” so long as the legislative purpose behind the regulations is to regulate economic activity, even if the plain language and practical effect of the enacted statute is to single out only those who speak.

The novel legal issue presented by the case centers around how Ohio has chosen to regulate precious metal dealers – – by defining a precious metal dealer as only those who buy gold or silver and then broadcast to the public that they do so.

While the Act provides “no person shall act as a precious metals dealer without first having obtained a license,” the Act define a “Precious metals dealer” to be “a person who is engaged in the business of purchasing articles made of or containing . . . precious metals or jewels of any description if, in any manner, including any form of advertisement or solicitation of customers, the person holds himself, herself, or itself out to the public as willing to purchase such articles.

Analyzing this language, the District Court held the Department of Commerce failed to show “how holding one’s self out as willing to purchase precious metals contributed to the evils the State seeks to prevent. Moreover, Defendants have not shown how requiring a license only for purchasers of precious metals who engage in commercial speech directly and materially advance those interests.”

But the Sixth Circuit panel on the case disagreed.

Liberty Coins’ Petition for Writ of Certiorari argues that the High Court should now take up the case because:

  • This case squarely presents the question of whether an occupational licensing requirement that onlyapplies when a person communicates a message to the public is subject to little or no review – as the court below held – or to the higher First Amendment scrutiny that applies to other laws that impose burdens based on speech.
  • The Sixth Circuit’s decision conflicts with many prior Supreme Court and Circuit Court decisions by establishing a new rule that when the “primary purpose” of a law is to “regulate the conduct” of a business, courts should review that law only through low scrutiny, even though the law’s burdens only apply if a person speaks.

The Petition seeks to restore the right of Ohio retail gold and silver coin dealers to be free from a licensing regime that punishes them on the basis of their speech, and subject them to unconstitutionally sweeping searches and seizures.

“This Act and its aggressive enforcement treats the many Ohio small businesses who participate in gold and silver markets as public utilities at best, and criminals at worst, irrespective of whether they have done harm,'” said Maurice Thompson, Executive Director of the 1851 Center.

“The state misguidedly seeks to advance its mission of ‘preventing theft and resale of precious metals’ through gag orders, warrantless searches, and criminalization of innocent small businesses. Fortunately, the First Amendment allows us to protect Ohioans’ rights to engage in truthful promotion of their businesses.”

“Speech alone is the trigger for Ohio’s licensing requirement,” explained Pacific Legal Foundation Principal Attorney Timothy Sandefur. “And that makes this regulatory scheme unconstitutional. Without a compelling interest that meets the highest standard of judicial scrutiny, government cannot restrict speech. It certainly can’t impose a licensing requirement on speech. And it can’t impose indirect limits, as the Ohio law does, by restricting speech in the guise of regulating business.”

The state’s heightened enforcement tactics, which effectively put many coin dealers out of business in response to political contributions from competing and better-organized pawnbrokers, come at a time of when an increasing number of Ohioans seek to use gold and silver to protect their savings against potential inflation due to federal government increases in the money supply.
 

Read Liberty Coins’ Petition for Writ of Certiorari HERE.

 


October 3, 2014: Morning Journal via Associated Press: Legal centers seek stop to Ohio metals dealers law

November 3, 2013: Columbus Dispatch: Gold shops await rule on fines, licensing

October 12, 2013: Cincinnati.com: Coin shop challenges Ohio law as free speech ban

December 7, 2012: Bloomberg Businessweek: Ohio gold, silver dealers’ law blocked by judge

December 7, 2012: Ohio Watchdog: OH: Judge blocks catch-22 in state law that threatened entire industry

November 16, 2012:WBNS-10TV: Scrap Metal Fight: A coin dealer is suing the state over scrap metal license requirements [VIDEO]

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]

Federal Court: Ohio Precious Metals Dealers Licensing Scheme Unconstitutional

Act regulates business in response to constitutionally-protected advertising, and prohibits legitimate purchases of gold and silver

Columbus, OH – A federal court late yesterday ruled that Ohio’s regulatory scheme governing those purchasing gold, silver, and other precious metals – the Precious Metals Dealers Act- violates the First Amendment.

The ruling, made by Judge Watson of the Columbus division of the Southern District of Ohio, paves the way for Ohio businesses, most prominently coin dealers, to resume purchases of items containing gold and silver content, and in particular, to resume advertising their interest in purchasing inventory consisting of precious metals, free from concern over confiscatory prosecution, fines and regulations.

The 1851 Center for Constitutional Law took up the coin dealers’ case and challenged the state law after the Ohio Department of Commerce threatened to shut down Liberty Coins, of Delaware, Ohio, if it refused to pay considerable fines and obtain a government license to advertise its business.

The lawsuit had sought recognition that the First Amendment applies to and protects “commercial speech,” such as coin dealers’ advertising, and that the Act’s prohibition of advertising by coin dealers was not a means of reducing gold and silver-related theft.

The lawsuit had also made claims asserting that requirements that business owners demonstrate that they have “good character,” “sufficient reputation,” “sufficient financial responsibility,” and “sufficient experience” prior to being permitted to run their businesses were unconstitutionally vague; and that the Act’s authorization of warrantless searches of business owners’ property and records at any time without notice violated their Fourth Amendment rights.

In his 28 page decision, Judge Watson, explaining that “the Act only prohibits the unlicensed buying of precious metals when commercial speech is involved,” emphasized that “a broad injunction completely prohibiting enforcement of the licensing provision is warranted.”

The order, an across-the-board rebuke to Ohio’s regulations and the cavalier enforcement tactics the Ohio Department of Commerce has against Ohio’s small businesses over the past year, concluded as follows:

  • The Department of Commerce failed to show “how holding one’s self out as willing to purchase precious metals contributed to the evils the State seeks to prevent. Moreover, Defendants have not shown how requiring a license only for purchasers of precious metals who engage in commercial speech directly and materially advance those interests.”
  • “[The state] has not shown that forcing those who engage in commercial speech to obtain a license is reasonable,” and “the restriction on commercial speech is more extensive than necessary.”
  • The Department of Commerce “incorrectly” asserts “that the law prevents fraud, money laundering, theft and terrorism by requiring those who wish to engage in the business of buying from the public gold, silver, and other precious metals to be licensed.”
  • “The breadth and number of exemptions undercuts the Defendants’ argument that the licensing scheme is narrowly tailored to protect against theft, fraud, or terrorism.”

The Court added that the Department of Commerce’s aggressive reading of the regulations was “nonsensical,” and that Ohio coin dealers and others “are unable to actually purchase precious metals without facing prosecution due to Defendants’ incorrect interpretation of the Act.”

“We are just trying to make it safe for small businesses to operate in Ohio – – a mission that we wish our state government would share, rather than thwart,” said Maurice Thompson, Executive Director of the 1851 Center. “This Act and those enforcing it treat small businesses who make gold and silver available as public utilities at best, and criminals at worst, irrespective of whether they have done harm.”

Heightened enforcement of the PMDA by the Department of Commerce, under the control of the Kasich Administration, comes in response to accelerated lobbying and financial contributions to candidates by the pawn brokers industry, which is exempt from the regulations, and a direct competitor of those who are subject to the Act. The enforcement, which would have put many coin dealers out of business, also comes at a time of rising precious metals prices, where an increasing number of Ohioans seek to use gold and silver to protect their savings against potential inflation caused by federal government increases in the money supply.

Thompson added “the state misguidedly seeks to advance its mission of ‘preventing theft and resale of precious metals’ through gag orders, warrantless searches, and criminalization of innocent small businesses. Fortunately, the First Amendment allows us to protect Ohioans’ rights to engage in truthful promotion of their businesses.”

Read the Court’s Order Granting Liberty Coins’ Motion for Preliminary Injunction HERE.


December 7, 2012: Bloomberg Businessweek: Ohio gold, silver dealers’ law blocked by judge

December 7, 2012: Ohio Watchdog: OH: Judge blocks catch-22 in state law that threatened entire industry

December 6, 2012: WYTV 33 News: Ohio gold, silver dealers’ law blocked by judge

Petitions Submitted to Place Repeal of Westerville School Levy Tax on November Ballot

Columbus, OH – Proponents today delivered over 5,100 signatures to the Franklin County Board of Elections to place an effective repeal of the March school levy tax increase on the November ballot. So long as 3,585 of these signatures are declared valid, the initiative would effectively repeal the 6.71 mil tax increase narrowly approved in March, after taxpayers defeated a similar measure at the November 2011 general election.

Proponents’ internal validation tests indicate that over 90 percent of collected signatures are valid – – an amount well in excess of the needed threshold.

The effort, spearheaded by Taxpayers for Westerville Schools and represented by the 1851 Center for Constitutional Law, marks the inaugural action of the 1851 Center in facilitating taxpayers’ use of a previously obscure section of the Ohio Revised Code to lower their school district tax burdens, while forcing Ohio school districts to control spending and reign in labor costs rather than raising taxes.

Inundated with interest, volunteer Westerville residents gathered the 5,100-plus signatures in just three months, despite virtually no financial resources.

“Westerville residents’ achievement today is an inspiring example for taxpayers around the state.” said 1851 Center Executive Director Maurice Thompson. “Disingenuous Ohio school districts choose political gamesmanship over fiscal responsibility, placing tax hikes on the ballot at low-turnout elections. Tax rollback projects like this are an essential tool to fight back against this gamesmanship — by subjecting the tax increase to the general election ballot, when those who aren’t ‘on-the-take’ vote.”

The March 51-49 percent vote for the tax increase came just four months after a 61-39 defeat at the November 2011 general election. This measure will appear on the November 2012 general election ballot.

“We are particularly pleased to begin this project in Westerville, the highest-taxed school district in central Ohio, and also the longtime home of our Governor,” added Thompson. “We hope that the Governor and other state officials take note of these local tax abuses and reform the policy statewide. Until that time, we will vigorously address this issue.”

The 1851 Center has called on state officials to reduce the number of times per year school districts may place tax increases on the ballot from three to one – – the general election held each November. Due in part to these special election tax increases, Ohioans’ local government tax burden is the sixth highest in the nation, according to the Ohio Department of Taxation.

Westerville taxpayers have proposed specific cuts that would alleviate the need for the March tax hike, noting that administrators enjoy luxurious benefits packages, the average teacher’s salary of over $65,000 (trending towards over $80,000 by 2014-15 at current spending rates) is amongst the highest in the state and significantly higher than salaries of average Westerville residents, and the district pays the salary of Westerville Education Association union officials to do union work that does not benefit the district or the taxpayers.

The 1851 Center’s guide on how taxpayers can roll back tax levies can be found here.

More information on Westerville School District finances and the tax repeal effort is available at www.TaxpayersForWestervilleSchools.com.

The Center has vowed to defend the initiative at no cost to taxpayers.

 


October 4, 2012: Media Trackers: Westerville City Schools Secretly Coordinated Opposition to Tax Cut Issue

September 7, 2012: NBC4i: Ohio Taxpayer Group Wants Chance At Ballot

September 7, 2012: ThisWeek: Westerville tax-repeal effort goes to Supreme Court

August 21, 2012: Columbus Dispatch: Effort to repeal Westerville school levy makes ballot

August 8, 2012: Columbus Dispatch: Effort to repeal Westerville schools levy gets signatures aplenty

Enforceability of Ohio Constitution at Stake in Standing Dispute over JobsOhio

1851 Center supports Progress Ohio’s standing to challenge the constitutionality of JobsOhio  

Columbus, OH – The 1851 Center for Constitutional Law today 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’s amicus brief argues 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 brief, which takes no position on the substantive issue at this stage – – 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 1851 Center’s Brief is a clarion call to all Ohioans to pay attention to Ohio’s judicial branch, which, in instances such as this, chips away at the state constitution through procedural artifice.”


August 10, 2012: The State of Ohio: Battleground Ohio Again [VIDEO]

August 1, 2012: Hudson Hub Times: Conservative group backs liberal advocates in JobsOhio appeal

July 31, 2012: LegalNewsline: Lawsuit over JobsOhio legislation moves to Ohio SC

July 30, 2012: WEWS NewsChannel 5: Libertarian legal center joins JobsOhio fight

July 30, 2012: Cleveland.com: Lawsuit challenging JobsOhio continues with appeal to Ohio Supreme Court

July 30, 2012: Ohio Votes: Political Opposites Join Forces In Court Fight [VIDEO]

July 31, 2012: LegalNewsline: Lawsuit over JobsOhio legislation moves to Ohio SC


Read the filed Amicus Brief here.

Federal Court Enjoins Shaker Heights from Blocking Message of Tax-Increase Opponents

shtuCleveland, OH – Yesterday a federal court enjoined the City of Shaker Heights from further harassment of Shaker Heights residents city officials silenced through threat of a frivolous trademark lawsuit. The threat had come in retaliation for the citizens’ opposition to the City of Shaker Heights’ attempt to increase income taxes on residents through an August 7 vote.

The Northern District of Ohio Judge Christopher Boyko ordered that the City “shall take no action which interferes in any way with Plaintiffs’ use of the Shaker Heights Taxpayers Union Logo. . .

This Order comes in response to legal action filed on behalf of the Shaker Heights Taxpayers Union (“SHTU”). This legal action included a demand for an immediate injunction prohibiting city officials from engaging in any further threats, intimidation, or retaliation in response to the taxpayers’ legitimate exercise of their constitutional rights

Shaker Heights resident Mark Zetzer formed the SHTU to advocate against the City’s placement of a personal income tax increase on the August 7 ballot, arguing that Shaker Heights taxes were already the highest in the state. In addition Mr. Zetzer designed for the group a logo that parodies the City of Shaker Heights logo by replacing the City logo’s leaves with dollar signs, to represent City officials’ use of taxation as a first-resort (see the logo below).

Even though federal courts have repeatedly confirmed that the First Amendment trumps trademark law in the field of political speech, just as Mr. Zetzer’s message was beginning to gain traction, the City of Shaker Heights sent Mr. Zetzer a “Demand to Cease and Desist,” threatening that “[f]ailure to stop [use of the SHTU logo] will result in the City taking legal action to protect its trademark, including a request for an award of damages.”

In response, SHTU had been forced to stop using the logo in its campaign.

“This case featured an appalling attempt by city officials to silence anyone who stands in the way of their access to more of Shaker Heights residents’ earnings,” said Maurice Thompson, Executive Director of the 1851 Center. “The Court’s Order preserves the rights of Ohioans to effectively criticize their local governments, particularly as they push for more taxes, and further acknowledges that political speech parodying one’s government cannot be abridged.”

Added Thompson, “Conducting frivolous legal activity on city time is not just unethical – – it’s also a waste of public funds. If the City simply abstained from paying government employees to engage in activities such as instituting official-appearing legal threats to silence opposing viewpoints in the heat of an election, there would likely be no need to impose additional taxes on Shaker Heights residents.”

The logos at issue in this case are below:

L: City of Shaker Heights logo; R: Shaker Heights Taxpayers Union logo

 


July 27, 2012: Cleveland.com: Judge says Shaker Heights can’t stop anti-tax group’s use of logo

 

The 1851 Center’s Complaint can be viewed here.

The Motion for a Preliminary Injunction is available here.

Legal Center: Shaker Heights Threats to Tax-Increase Opponents Unconstitutional

shtuCleveland, OH – The 1851 Center for Constitutional Law today filed suit in federal court on behalf of Shaker Heights residents whom city officials threaten to silence through threat of a frivolous trademark lawsuit. The threat comes in retaliation for the citizens’ opposition of the City of Shaker Heights’ attempt to increase income taxes on residents through an August 7 vote.

The legal action, filed on behalf of the Shaker Heights Taxpayers Union (“SHTU”), includes a demand for an immediate injunction prohibiting city officials from engaging in any further threats, intimidation, or retaliation in response to the taxpayers’ legitimate exercise of their constitutional rights.

Shaker Heights resident Mark Zetzer formed the SHTU to advocate against the City’s placement of a personal income tax increase on the August 7 ballot, arguing that Shaker Heights taxes were already the highest in the state. In addition Mr. Zetzer designed for the group a logo that parodies the City of Shaker Heights logo by replacing the City logo’s leaves with dollar signs, to represent City officials’ use of taxation as a first-resort (see the logo below).

Federal courts have repeatedly confirmed that the First Amendment trumps trademark law in the field of political speech. Nevertheless, just as Mr. Zetzer’s message was beginning to gain traction, the City of Shaker Heights sent Mr. Zetzer a “Demand to Cease and Desist,” threatening that “[f]ailure to stop [use of the SHTU logo] will result in the City taking legal action to protect its trademark, including a request for an award of damages.” In response, SHTU has been forced to stop using the logo in its campaign.

Despite the City’s claims, given the clarity of the law on this issue, the City’s trademark concerns are simply a pretext to silence the SHTU from hindering the City’s efforts to raise taxes on its citizens. The lawsuit seeks to restore the right of taxpayers to engage in these types of debates without fear of officious-sounding but frivolous threats and intimidation from their own government.

“This is an appalling attempt by city officials to silence anyone who stands in the way of their access to more of Shaker Heights residents’ earnings,” said Maurice Thompson, Executive Director of the 1851 Center. “These types of case are why we formed the 1851 Center: to prevent city official from bullying those trying to limit government, who they know don’t have the means to fight back on their own.”

Added Thompson, “the City was counting on the reality that an average citizen would not understand the frivolity of its threats, given the complexities of intellectual property law. This case will help ensure that other cities do not use official-appearing legal threats to masquerade their efforts to silence limited-government viewpoints in the heat of a local tax election.”

The logos at issue in this case are below:

L: City of Shaker Heights logo;  R: Shaker Heights Taxpayers Union logo

 

July 13, 2012: Cleveland.com: Federal judge to discuss potential court injunction against Shaker Heights by anti-tax increase group

July 13, 2012: Cleveland.com: Shaker Heights agrees to let Shaker Heights Taxpayers’ Union use city logo in its materials

 

The 1851 Center’s Complaint can be viewed here.

The 1851 Center’s can be viewed here.