Court: $100 Per Day Fines for Yard Signs Unconstitutional

Ohio city’s ban on political yard signs except directly before and after elections violates free speech, property rights

Toledo, OH – A federal court Wednesday prohibited an Ohio city from fining citizens who display political yard signs for longer than 67 days.

The ruling, made by Judge Jeffrey J. Helmick of the Northern District of Ohio, forbids the City from enforcing local zoning ordinances to stifle free speech. The Court’s Order stops the City from determining which signs are “political,” limiting the display of “political” yard signs on private property to periods of time just before or after an election, or imposing fines on citizens who display such signs.

The ruling comes in response to a First Amendment lawsuit filed by the 1851 Center for Constitutional Law on August 15, 2017 on behalf of independent Perrysburg City Council candidate Charles “Chip” Pfleghaar and other Perrysburg citizens seeking to display their discontent with Perrysburg’s elected officials.

The 1851 Center’s lawsuit asserts that prohibiting signs on private property – or limiting the display of such signs to just two months of the year – simply because the signs reference politicians, government, or public policy issues, violates the First Amendment to the United States Constitution and Section 11, Article I of the Ohio Constitution.

In late July the City’s zoning inspector ordered Mr. Pleghaar to remove two relatively-modest signs advocating for his own election to city council or face fines of up to $100 per day for each day he displayed the signs in his yard.

The City cited its own local ordinance prohibiting signs with political messages except directly before and after elections, which it had previously cited to order citizens to remove Donald Trump and Hillary Clinton signs, as well as signs advocating for lower property taxes. In support of the ordinance, the City claims it prohibits political signs “to enhance the physical appearance of the City . . . to create an appearance that is attractive . . . and to improve traffic safety.”

“Ohioans should remain free to use their private property however they would like, so long as they abstain from inflicting harm on others. This of course includes displaying yard signs criticizing incumbent politicians, advocating for lower taxes, or advertising a business. When Ohio cities attempt to regulate signs on private property, they both abridge our free speech and violate our property rights at the same time,” explains Maurice Thompson, Executive Director of the 1851 Center.

“Yard signs are an efficient way for a homeowner to criticize public officials and identify where he or she stands on an issue. These signs are particularly important to political outsiders with lower name identification and less-established donor and political networks, and likely the ultimate example of outsider-driven grass-roots politics, as the average homeowner lacks access to media outlets or the capacity to make large donations to candidates or issues.”

Read the Homeowners’ Complaint HERE

Read the Homeowners’ Motion for Preliminary Injunction HERE

Read the Court’s Order HERE

Federal Court Approves Class Action on Ohio City’s Illegal Home Inspections

Legal Center: Fees that City’s homeowners were forced to pay to fund unconstitutional “point of sale” inspections must now be returned

Cleveland, OH – A federal court late Friday certified a class action lawsuit against the City of Bedford, Ohio, explaining that all homeowners who were forced to endure government searches as a precondition to the sale of their homes are entitled to demand refunds of illegal “Point of Sale” inspection fees.

This ruling paves the way for the return of inspections fees to all affected homeowners, rather than just those who filed the lawsuit.

The Order, made by Judge Benita Pearson of the Northern District of Ohio, confirms class action lawsuits may be maintained against city governments who extort their citizens and businesses in a widespread manner, such as through violating their Fourth Amendment rights through sweeping city-wide home inspection requirements.

Specifically, Judge Pearson certified classes of all individuals or businesses that have been subject to the inspections and paid inspection fees to the City of Bedford in conjunction with the inspections, explaining that “Citizens are entitled to “return of Point of Sale and Rental Inspection fees illegal paid to [the City of Bedford].”

“Class action litigation is an excellent method for average citizens to even the playing field when fighting back against their corrupt and otherwise indifferent local governments. This ruling confirms that Ohio cities must be held just as responsible to their citizens as big corporations are to their customers,” said Maurice Thompson, Executive Director of the 1851 Center.

In May of 2016, the 1851 Center for Constitutional Law moved to immediately enjoin Ohio cities, and the Cities of Bedford and Oakwood in particular, from enforcing “point of sale” and “presale” programs that require citizens to endure and pass arbitrary and warrantless government inspections before they could sell their homes to even the most informed and willing buyers.

In each case, the Cities had threatened to criminally prosecute and even imprison homeowners who sold their homes without first submitting to and passing city inspections. In Bedford, the City also claimed the power to block home sales on account of “architectural style and detail,” “color,” and lack of “orderly appearance.”

Within days of the 1851 Center’s lawsuits, each city rescinded its policies. However each has refused to return illegal inspection fees.

Such municipal ordinances, in addition to restricting Ohioans’ property rights, subject homeowners to open-ended warrantless searches of every interior and exterior space of a home, violating the Fourth Amendment to the United States Constitution and Section 14, Article I of the Ohio Constitution.

“Local governments do not have unlimited authority to force entry into Ohioans’ homes or businesses. To the contrary ‘houses’ are one of the types of property specifically mentioned by the Fourth Amendment; and Ohioans have every moral and constitutional entitlement to exclude others, even government agents, from their property,” adds Thompson. “The right to own property in Ohio has little value if local governments can continuously chip away at one’s right to actually make use of that property, requiring government permission slips for basic arrangements such as the sale of one’s home to a willing buyer.”

The legal action against Bedford is filed on behalf of area landlord Ken Pund, who is forbidden from selling to his daughter a home that he owns and she already resides in, and John Diezic who was prohibited from selling his Bedford home due to minor cracks in the asphalt of his driveway.

Read the Court’s Order HERE

Read the Property Owners’ Motion for Preliminary Injunction HERE

Check out Maurice Thompson discussing the case against Ohio governments’ forced home inspections below:

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This lawsuit is brought in partnership with the Ohio Real Estate Investors Association (“OREIA”), the Finney Law Firm in Cincinnati, and the law firm of Berns, Ockner & Greenberger in Cleveland.

Lower Your Local Tax Bill This Summer

1851 Center teaches citizens how to use local initiatives to place tax cut proposals on the ballot

Are you tired of do-nothing politicians but still looking to make a difference in government?

Have you recently opened an envelope with an unacceptably-large property tax bill? Or just paid an unreasonable amount of local income taxes?

Unbeknownst to many, Ohio law invites civic-minded Ohioans to initiate relatively simple petition drives to place tax cut proposals on the ballot.

In A Citizen’s Guide to Reducing Your Local Tax Burden, the 1851 Center for Constitutional Law provides citizens with detailed, practical, and clear advice on how to lower their school district property or income taxes, as well as city, village, and township taxes, through a little known state statute.

By collecting just a few hundred valid signatures, over-taxed Ohioans can certify ballot issues to cut or repeal sky-rocketing local property or income taxes.

And there has never been a better time for such efforts:

  • Ohioans have never been more entitled to tax relief. Local property and income taxes in Ohio have sharply increased during the Kasich Administration. Some estimate that Ohioans local tax burdens have increased by an average of 40 percent since Kasich took office.
  • Ohioans are now subject to the ninth highest combined state and local tax burden in the nation, and the highest amongst all Midwestern states.
  • There’s no indication that state or local politicians will do anything to curb this continuous cycle of levy elections and tax hikes. But local initiatives are a means by which citizens can circumvent unhelpful public officials and take matters into their own hands.

The 1851 Center provides free legal assistance to those interested in placing a tax relief proposal on their local ballot this fall.

You may not be able to influence what goes on in Washington D.C., or even Columbus. But through a local petition drive, you can directly influence your tax rate. And you don’t need to be a lobbyist or donate to a political campaign to do it.

You have a right to keep more of the money you’ve earned. And by passing a local tax cut, more of your hard-earned dollars can be diverted away from waste and devoted to you and your family’s health, education, safety, and general well-being.

Read A Citizen’s Guide to Reducing Your Local Tax Burden HERE.

Ohio School District Forced to Return $5.5 Million in Illegal Taxes to Taxpayers

Indian Hill Board of Education raised taxes without a vote, refused to refund money

school bus picking up kidsCincinnati, OH – After a five-plus year legal battle concluded with an Ohio Court denying all of its objections, the Indian Hill Exempted Village School District Board of Education late yesterday finally conceded that it must return the $5.5 million that it illegally assessed taxpayers after raising taxes without a public vote in 2010.

The 1851 Center for Constitutional Law’s victory on behalf of a certified class of all school district property taxpayers comes nearly one year after the 1851 Center prevailed in striking down the tax increase before the Ohio Supreme Court. After the Court’s unanimous December 2014 decision, the school district still refused to return the funds, requiring the Center to file a class action lawsuit in January of 2015.

In affirming that Ohio taxpayers maintain a constitutional right to recover unlawfully-imposed taxes, Judge Martin of the Hamilton County Court of Common Pleas denied the Board’s Motion for Summary Judgment, rejecting the Board’s position that it was not required to return any of the funds, or that in the alternative, it was required to return $2 million at most.

Indian Hill School District property taxpayers can expect a refund check by March 1, 2016. Amounts are expected to be approximately $1,000 for the average taxpayer, and much greater for many others.

“The outcome of this case reflects the principles that property taxes cannot be increased without a vote by citizens, unlawfully-collected taxes must be returned to those taxpayers from whom they were taken, and government must pay interest to taxpayers when it has kept their funds for many years, as here,” said Maurice Thompson, Executive Director of the 1851 Center for Constitutional Law.

“These results should dissuade other school districts from attempting to unlawfully raise taxes. Nevertheless, Ohioans should have a hard look at their school board members, who, absent scrutiny, could quite literally be getting away with theft, as would have otherwise happened here.”

Due to the class-action status of the case, the Court of Common Pleas will hold several hearings over the coming months to finalize the case, including addressing the administrative complexities of issuing pro rata refunds not just to current homeowners in the district, but to those that owned homes during the period of illegal taxation.

Rather than settling the matter in January, the Board diverted nearly $200,000 from funds earmarked for the education of school district children to pay attorneys fees of $400 per hour. Unable to find Cincinnati law firms willing to defend its practices, the Board opted to hire a firm consisting of Washington D.C. lobbyists and Cleveland lawyers.

The Board and its lawyers argued that it was entitled to keep the taxpayers’ money because each and every taxpayer did not file an individual protest letter with each and every property tax payment, and further argued that perhaps it could have legally raised taxes, albeit to a lesser extent, in the absence of the unlawful tax increase that it chose.

The 1851 Center countered by explaining that state and federal Due Process Clauses have been held to require the return of unlawfully-charged taxes. The Court took little time in flatly rejecting the firm’s arguments and siding with the 1851 Center.

“Judge Martin should be commended for scrutinizing and seeing through the Board’s outlandish arguments rather than just reflexively siding with government – – the Court deserves credit for doing justice for Ohio taxpayers,” added Thompson.

Read more about the underlying Ohio Supreme Court Case HERE

Read the 1851 Center’s Class-Action Filings HERE

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

IRS Targeting of 1851 Center in May of 2010 Demonstrates Broader Corruption

IRS harassment was not limited to “tea party” organizations, and began earlier than many believe

IRSreleaseimageAColumbus, OH – The 1851 Center for Constitutional Law today emphasized that Internal Revenue Service harassment of groups advocating for limited government extends as far back as early 2010, and includes organizations exclusively dedicated to protecting constitutional rights, including the 1851 Center.

In its May 20, 2010 response to the 1851 Center’s application for tax-exempt status, the IRS demands that, in order to receive approval of its application, the 1851 Center must: “Please explain in detail your organization’s involvement with the Tea Party.

The 1851 Center explained that it provides legal representation to Ohioans whose constitutional rights have been aggrieved, including tea party organizations and members, and ultimately received tax exempt status. However, this instance is significant because it reveals infractions beyond what even the Inspector General for Tax Administration’s May 14 Report reveals:

 

  • While the Report focuses on 501(c)(4) political and/or lobbying organizations, the 1851 Center applied for status as an educational and/or civil public charity under Section 501(c)(3) (the 1851 Center is a public interest law firm that litigates civil rights cases without engaging in politics).
  • While the Report indicates that “[t]he Determinations Unit developed and used inappropriate criteria to identify applications from organizations with the words Tea Party in their names,” the 1851 Center made no reference to “tea party,” nor “patriot” or “9-12,” in is application, much less in its name.
  • IRS harassment of liberty-oriented groups, and intent to root out “tea party” activities, even through non-tea party sources such as 1851, has been in full force for a minimum of three years.

 

In its IRS filings, the 1851 Center indicated that its mission was “to defend constitutional rights and human rights through legal action.” The Center supplied no information that would have indicated any particular relationship with any particular tea-party organization.

“As with demands made of other organizations, the IRS demand to the 1851 Center was at minimum, irrelevant, and appears to have been calculated to do political opposition research on organizations opposing the President’s policies through, ironically, doing nothing more than enforcing the United States and Ohio constitutions.” said Maurice Thompson, Executive Director of the 1851 Center. “Investigators must acknowledge that the breadth of this scandal extends to not just ‘tea party’ groups, but to conservative and libertarian think tanks and public interest law firms across the nation.”

The 1851 Center has been a steadfast opponent of the Patient Protection and Affordable Care Act since March of 2010, having initiated the Ohio Health Care Freedom Amendment, service as amicus counsel on the lawsuits opposing the individual mandate, and counseling against a state-based Obamacare exchange and more recently against Medicaid expansion.

Read the IRS Demand Letter to the 1851 Center HERE.

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

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