Private Pipeline Companies May Not Immediately Seize Ohioans’ Properties

Rampant Eminent Domain Abuse Continues Throughout Rural Ohio; However, Ohioans Have Legal Defenses

farmColumbus, OH – The 1851 Center for Constitutional Law today moved to counter the aggressive legal actions taken by Texas Eastern Transmission, a private Texas pipeline corporation, against Ohioans Roger and Lana Barack of Belmont County, alongside hundreds of other Ohio landowners.

The Barack family’s opposition takes aim at abusive eminent domain practices frequently used by private out-of-state corporations to seize Ohioans property by force, and without legitimate compensation.

More specifically, the 1851 Center’s opposition asserts the following:

  • Recent federal court decisions reaffirm and revitalize the principle that Congress may not delegate its power, including the power to seize property, to purely private companies: taking of Ohioans property without sufficient government oversight is unconstitutional.
  • Government agencies must provide Ohio landowners with notice of any hearings that may result in government permission allowing the seizing of their properties. In this case, the Federal Energy Regulatory Commission (“FERC”) failed to notify Ohioans of the proceedings affecting their properties.
  • Federal approval of a pipeline route does not mean that private pipeline companies may immediately seize Ohioans private property: the Ohio Constitution prevents “quick takings” other than in the case of roads and emergencies. Even with federal approval, pipeline companies must abide by the Ohio Constitution.

“While we fully support energy development in eastern Ohio, that development does not preclude Ohioans’ property rights – – through an unholy alliance of government and big business, both state and federal statutes claim to authorize private pipeline companies to take Ohioans property. However, Ohioans should know that even in the case of federally-approved pipelines, they maintain important constitutional rights protecting their property: in many cases, private pipeline companies altogether lack the eminent domain authority they claim to have; and even where such authority may be legitimate, these companies may not immediately seize Ohioan’s properties,” explained Maurice Thompson, Executive Director of the 1851 Center.

“Simply asserting the proper defenses can force pipeline companies to choose a pipeline route that goes around objecting landowners properties, or for enterprising Ohioans, raise offers for their land by hundreds of thousands of dollars.”

Section 19, Article I of the Ohio Constitution protects property rights above and beyond the federal baseline protections, forbidding takings that are not for legitimate “public use,” and forbidding immediate takings, other than in limited circumstances.

Read the Landowners’ Opposition to the Pipeline Company’s “Motion for Immediate Possession” HERE.

 


January 23, 2015: Sandusky Register: Public events announced on proposed gas pipeline

January 15, 2015: Natural Gas Intel: Ohio Couple Fighting Eminent Domain For Tetco Project

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]

Sixth Circuit Oral Argument: Is Ohio’s “Precious Metals Dealer Act” Constitutional?

Court considers whether to protect Ohio business owners’ right to advertise and sustain invalidation of burdensome regulation of coin dealers

libertycoinsCincinnati, OH – The Sixth Circuit Court of Appeals heard oral arguments on the constitutionality of the Ohio Precious Metal Dealer Act, which imposes strict limits on precious metals purchasers and businesses in Ohio.

Through vigorous enforcement of the Act, the Ohio Department of Commerce had threatened to shut down many Ohio small businesses. However, the Act was enjoined in its entirety by a federal court in December of 2012.

The ruling, made by Judge Watson of the Columbus division of the Southern District of Ohio, paved 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 legal action was brought by the 1851 Center for Constitutional Law on behalf of Liberty Coins, a Delaware, Ohio coin dealer ordered by 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 1851 Center continues to defend Liberty Coins’ right to do business against Attorney General Mike DeWine’s appeal. And the case has since gained national attention, with the Washington D.C.-based Institute for Justice and Sacramento-based Pacific Legal Foundation weighing in with Amicus Briefs defending Liberty Coins and attacking the Act’s lawfulness.

“This Act and those enforcing it have treated small businesses who make gold and silver available as public utilities at best, and criminals at worst, irrespective of whether they have done harm,” according to Maurice Thompson, Executive Director of the 1851 Center.

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, and this case demonstrates promise for a powerful new method of enforcing constitutional limits on onerous state and federal regulations.”

The Supreme Court has repeatedly confirmed that First Amendment applies to “commercial speech,” which includes advertising. Nevertheless, Commerce, after vigorous lobbying and political contributions made by the pawnbrokers industry, which is a direct competitor of those who are subject to the Act, had begun vigorous enforcement of regulations prohibiting coin dealers from advertising without a license, and requiring a license and payment of steep fine if they had previously advertised (licenses are conditioned on a state finding of “good character and reputation”). Once licensed, state and local agents were empowered to search and seize any item or business record without a search warrant or finding of probable cause.


Listen to the archived oral argument, HERE.

Read the Appellate Briefs HERE.

Read the Amicus Briefs on behalf of Liberty Coins from the Institute for Justice HERE and Pacific Legal Foundation HERE.


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

Bill Authorizing Warrantless Searches of Ohioans’ Cell Phone Activity Derailed

Stalled in Committee after 1851 Testimony, Bill would permit sharing of
“any information” to law enforcement, if not amended

warrantlesscellColumbus, OH – The 1851 Center for Constitutional Law today took action that stalled passage of Senate Bill 5, legislation that, if enacted, would permit warrantless acquisition, by state and local law enforcement, of Ohioans’ travels and cell phone communications.

The fast-tracked Bill, which passed 32-1 in the Ohio Senate and was poised to be voted out of its House committee today, voted on by the entire House on June 19, and enacted into law within a matter of days, received almost no public or media scrutiny until the 1851 Center’s involvement today.

In his testimony before the House Committee on Transportation Public Safety and Homeland Security, 1851 Center Director Maurice Thompson explained the following:

  • The Bill authorizes wireless service providers to break their voluntarily-agreed-to contracts with Ohio customers, to whom they’ve promised privacy, and strips Ohioans of their right to enforce these contracts, or sue for damages (Cell phone carriers are granted absolute immunity for sharing information with law enforcement).
  • The Bill is broader than the controversial federal NSA program, in that it authorizes searches not related to foreign communications or terrorism, including activity related to petty crime such as driving infractions, or no crime at all.
  • While the Bill’s initial requirements of an “emergency” are well-defined, later division of the Bill place no limits on local law enforcement’s authority to acquire cell phone records of any Ohioan for any reason.
  • Cell phone companies have considerable incentive to share this information with Ohio police, to whom they can sell this information without liability (under the Bill) at up to $2,200 per search.

“We were shocked to learn that this Bill had overwhelmingly passed the Senate with such speed, and that there was previously no opposition,” said Maurice Thompson, Executive Director of the 1851 Center. “Ohioans should be free from warrantless searches of their phone records except in the gravest of emergencies, if at all, and they should be free to contract with carriers that will not sell their information. This Bill would violate those constitutional principles, accomplishing the very thing the Fourth Amendment was written to guard against. That is why we have taken this action.”

After an hour of testimony by Thompson today, which sometimes included tense exchanges with state representatives, the House Committee agreed to table the Bill and field the 1851 Center’s proposed amendment – – which require a search warrants before any non-emergency acquisition of cell phone information may occur – – before taking further action on the Bill. The next Committee meeting on the matter is not yet scheduled.

Upon review of 1851 testimony, several Senators who voted for the Bill have indicated that the Bill was misleading, and that their support, at the behest of Senate leadership, was too hasty.


Read The 1851 Center’s testimony on proposed Senate Bill 5 HERE.


June 19, 2013: WBNS-10TV: Kelsey’s Law On Hold In Ohio After Cell Phone Privacy Issues Raised
June 20, 2013: Sandusky Register: Ohio lawmakers hot for snooping power

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]

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

Legal Center to High Court: Ohio PAC Laws Violate First Amendment

1851 Center asks Ohio Supreme Court to review Ohio Political Action Committee regulations on behalf of Geauga County Blogger

blogger-150x150Columbus, OH – The 1851 Center for Constitutional Law today applied to the Supreme Court of Ohio for jurisdiction over a case challenging the nation’s strictest Political Action Committee regulations.

The legal action is filed on behalf of Edmund Corsi, a Cleveland-area blogger who faces prosecution after blogging about state and local political issues, authoring a pamphlet critical of local politicians, and hosting an informal political discussion group. The state contends that Ohio’s PAC laws required Mr. Corsi to first register with the state and hire a treasurer, and then disclose his home address on his pamphlet and blog, and that by failing to do so, Corsi is subject to criminal penalties and civil fines. Mr. Corsi was referred for prosecution by one of the politicians he criticized – – Geauga County Republican Party chairman Edward Ryder.

The United States Supreme Court has repeatedly confirmed that political speech, even when through group association, in pamphlets or on the internet, is afforded the greatest constitutional protection.

In fact, the Court has already once struck down Ohio’s Political Action Committee regulation, in McIntyre v. Ohio Elections Commission in 1995. There, the Court chastised Ohio courts and the OEC for upholding the regulations after state officials attempted to prosecute a senior citizen for failing to include a “disclaimer” on her homemade flyer advocating against a Westerville property tax increase. Nevertheless, the Ohio Elections Commission maintains that the re-written regulations still require groups of two or more Ohioans who communicate political thoughts to first register as a Political Action Committee, and thereby submit to reporting, disclaimer, and disclosure requirements when communicating.

This case will mark the Ohio Supreme Court’s first opportunity to analyze the re-written PAC regulations, as well as the Court’s first opportunity to consider the effect of the U.S. Supreme Court’s landmark Citizens United decision on Ohio’s campaign finance regulations. There, of potential importance to Mr. Corsi’s case, the Court explained that “the First Amendment does not permit laws that force speakers to retain a campaign finance attorney * * * before discussing the most salient points of our day” (At Mr. Corsi’s hearng, the OEC Chairman advised Mr. Corsi to engage a campaign finance attorney if he wished to continue blogging about state and local public policies).

The 1851 Center’s Motion for Jurisdiction asserts the following:

  • Ohio’s PAC regulations unconstitutionally regulate small groups of citizens that spend little or even no money on politics, and do not coordinate with political candidates or campaigns, thereby extending beyond the entire purpose of campaign finance regulations.
  • The costs of complying with the PAC regulations, which includes reporting and disclaimer requirements, administrative burdens, the hiring of a treasurer, and the loss of privacy and anonymity of those who speak out by effectively requiring the disclose of the author’s name and home address on government filing, has the effect of silencing protected speech.
  • The regulations are unconstitutionally vague and overbroad, because they permit the Ohio Elections Commission members to guess at the “primary or major purpose” of the group, without considering whether they have spent money on politics.
  • The OEC improperly overanalyzes Facebook and blogs posts to involuntarily commit a group of citizens as a PAC (federal law prohibits consideration of “internet activities” when determining federal PAC status).

“Ohio’s PAC regulations have long been considered the most oppressive in the nation,” said Maurice Thompson, Executive Director of the 1851 Center. “It would be wise for our Court to hold that the First Amendment does not allow agency bureaucrats and political opponents to use PAC regulations to silence the speech of those who criticize government, using the loss of privacy and expensive reporting requirements of PAC regulations as leverage to intimidate and threaten those expressing differing views, as has been done here.”

Thompson added, “While many Americans fret over government permitting speech by ‘super-PACs,’ they should be more concerned about shocking amount of everyday grass-roots political speech that Ohio is forcing into PAC status – from lawn signs to Facebook pages – and thus essentially prohibiting, at the very same time.”

The case is particularly significant for opponents of local tax levies and “tea party” groups, many of whom are likely to be characterized as Political Action Committees, if the Ohio Election Commission’s ruling is not overturned.

Ohio’s regulations are notable because they are the nation’s only PAC regulations lacking what is commonly referred to as a “monetary trigger”: Ohioans can be forced to register as PACs even if they neither expect to or actually give money to or take money from political candidates or campaigns, and otherwise spend no money on politics.

Read the Geauga Constitutional Council’s Motion for Jurisdiction HERE.

1851 Center Applauds Kasich Agreement on Obamacare Exchange

flagstethoscope-300x200Columbus, OH – The 1851 Center for Constitutional Law today registered its approval, on behalf of conservative and libertarian leaders throughout Ohio, of the Kasich Administration’s agreement to refuse to implement a “state-run” Obamacare exchange.

The Administration’s agreement is significant for several reasons:

  • The agreement averts litigation that would have pitted Section 21, Article I of the Ohio Constitution, the 1851 Center for Constitutional Law, and grassroots backers of the Ohio Health Care Freedom Amendment against the administration (Division (A) of the Health Care Freedom Amendment prohibits the “employer mandate” that a state exchange would have attempted to impose).
  • The agreement means that Ohio will not impose the “employer mandate,” a penalty of up to $3,000 per employee that must be otherwise paid to the federal government by Ohio employers who do not provide government-approved health care insurance for their employees.
  • The agreement means that Ohio will not provide Obamacare “premium assistance,” a taxpayer-funded subsidy to individuals that masks the true increased costs of health insurance premiums imposed by Obamacare (the Administration estimates that Ohioans’ health insurance premiums may increase by as much as 85 percent).
  • The agreement means that Ohio will not assist the federal government in enforcing Obamacare’s “individual mandate.”
  • The agreement means that Obamacare will be significantly more difficult to enforce, dramatically enhancing the probability that the Act will be “re-opened” to debate, amendment or repeal.

While the issue appears esoteric, the impact of the Administration’s decision cannot be underestimated. The Act’s “employer mandate” taxes employers up to $3,000 per employee if they fail to offer required health benefits. But that tax applies only if employers receive tax credits or subsidies to purchase a health plan through a state-run insurance exchange.

The federal government might create exchanges in states that decline to creat e state-run exchanges, but it cannot offer credits through its own exchanges. And where there can be no credits, there is nothing to trigger that $3,000 tax on employers. The Obama Administration appears intent on using the Internal Revenue Service to impose the employer mandate, but there is no legal authority to support doing so, and the regulation attempting to do so is unlikely to be upheld.

Further, it is highly likely that Obamacare will collapse without the employer mandate and tax credits, just as it would have without the individual mandate.

In addition to inviting Obamacare into Ohioans’ lives, the Kasich Administration acknowledges that a state-run exchange would cost about $43 million annually, versus about $1.6 million to participate in the federal exchange.

“We are pleased that the Kasich Administration heeded the clear effect of the Health Care Freedom Amendment (passed in 2011), which prohibited Ohio from enacting a state based Obamacare exchange,” said Maurice Thompson, Executive Director of the 1851 Center. “We can now turn our attention away from the Kasich Administration, and begin to prepare litigation that ensures that Ohio employers will not be subjected to the $3,000 per employee fine, and that Obamacare ultimately collapses under the weight of its own legal infirmities.”

Read the 1851 Center’s explanation of why a state-run Obamacare exchange is bad policy, and violates the Ohio Constitution, here.


November 16, 2012: WKSU NPR: Kasich rejects health-insurance exchanges

November 16, 2012: Ohio Liberty Coalition: Governor Kasich confirms that creation of Ohio’s Obamacare exchange will be left to the feds

November 19, 2012: WYSO Ohio Public Radio: Kasich Tells Feds Ohio Won’t Set Up Its Own Health Care Exchange

November 19, 2012: Insurance News Net: Ohio: No State Health Care Exchange

November 20, 2012: Ohio Watchdog: OH: Step 2 — Sue IRS over Obamacare rule

November 21, 2012: Watchdog.com: VA: NFIB, Cuccinelli weigh Obamacare exchange costs; could Virginia get a pass?

November 23, 2012: Heartlander: Kasich Decides Against Obamacare Implementation

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