Columbus – The 1851 Center for Constitutional Law, a nonpartisan public interest law firm, yesterday notified Gahanna city officials it will file a court action if the city moves forward with a proposed $375,000 high-risk venture capital loan fund. The legal center will pursue the case on behalf of Gahanna taxpayers in the event the city council approves the proposed ordinance.

Gahanna City Council recently proposed an ordinance permitting the mayor to contract with the Economic and Community Development Institute (ECDI) for the creation of a venture capital loan fund. The fund would issue high-interest and interest-only loans to local businesses and individuals considered high-risk by conventional lenders.

1851 Center Executive Director Maurice Thompson advised Gahanna City Council against this constitutionally prohibited plan during Tuesday evening’s council meeting. After Thompson’s presentation, council members decided to postpone a vote on the ordinance by two weeks while they review the consequences of the impending legal challenge.

“Gahanna’s proposed ordinance is crafted to assist purely private interests, while placing public money that rightfully belongs to Gahanna residents and taxpayers very much at risk,” said Thompson. “The Ohio Constitution strictly forbids this type of reckless and irresponsible fiscal policy.”

Specifically, the Ohio Constitution (Section 6, Article VII) prohibits the city from “raising money for or loaning its credit to any private company, corporation or association.” According to Ohio Supreme Court precedent, this constitutional provision is intended to protect taxpayers from the risks associated with the failure of a private project.

Gahanna’s loan fund purports to:

• Use tax dollars to fund private enterprise;
• Issue loans to individuals who lack conventional collateral or pose a high risk and may have been turned down by conventional lenders;
• Issue loans at high interest rates of up to 12 percent; and
• Allow loans to be repaid on an interest-only basis.

In addition, the proposed ordinance would allow the city to recover funds from defaulted loans by seizing an individual’s personal property, including “vehicles, personal items, antiques, collectibles jewelry, or livestock.”

“The city would set up a system where it issues high interest loans to people who cannot afford to pay them back, and then attempt to confiscate personal assets –including homes – in the event of a default,” said Thompson. “This risky investment of taxpayer money in private enterprise is precisely what the Ohio Constitution was designed to prevent in 1851, after a rash of defaults upon government loans to railroad and canal companies.”

The proposed ordinance is the second time Gahanna city officials have run afoul of the Ohio Constitution through risking economic endeavors. In 1984, the Ohio Supreme Court rebuked Gahanna’s attempt to engage in a “joint enterprise” with private businesses, noting that the city’s loans to private entities amounted to an unconstitutional “pledge of tax revenue” to private business.

The 1851 Center for Constitutional Law is non-profit, non-partisan legal center dedicated to protecting the constitutional rights of Ohioans from government abuse. The 1851 Center litigates constitutional issues related to property rights, voting rights, regulation, taxation, and search and seizures. More information about the 1851 Center is available at http://www.ohioconstitution.org.

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For 70 years, the U.S. Supreme Court has read the Commerce Clause broadly to authorize Congress to address our most pressing national economic concerns. In fact, during George Washington’s first term as President, under the Second Militia Act of 1792, Congress explicitly required many Americans to make an economic purchase: of a gun, ammunition, gunpowder and a knapsack to be properly prepared for military service.

The problem here is that the Second Militia Act was not passed pursuant to the Commerce Clause, as any first-year law student would tell you, but pursuant to Congress’ express power to organize, arm and discipline the militia (which at the time consisted of all free, able-bodied males between 18 and 45 years of age).  The fact remains that Congress has never imposed an individual mandate on American citizens pursuant to the Commerce Clause in its history.  Otherwise, the Attorney General would have chosen a better example than a 218 year old statute passed pursuant to an entirely different provision of the Constitution.  If this is the best example of what the Ohio Attorney General’s Office has to offer in support of its position, then the other states are well on their way to overturning Obamacare.

The Attorney General based his decision on his purported review of the statute and his experience with federal constitutional law.  However, on August 2, 2010, the U.S. District Court for the Eastern District of Virginia issued the first nationwide opinion on the matter.  The Court questioned whether Congress had the power to regulate and tax a citizen’s decision to not participate in interstate commerce (here, a citizen’s decision to not purchase health insurance).

The Court held that

[w]hile this case raises a host of complex constitutional issues, all seem to distill the single question of whether or not Congress has the power to regulate—and tax—a citizen’s decision not to participate in interstate commerce.  Neither the U.S. Supreme Court nor any circuit court of appeals has squarely addressed this issue.  No reported case from any appellate court has extended the Commerce Clause or Tax Clause to include the regulation of a person’s decision not to purchase a product, notwithstanding its effect on interstate commerce.  Given the presence of some authority arguably supporting the theory underlying each side’s position, this Court cannot conclude at this stage that the Complaint fails to state a cause of action.

The Court’s holding suggests that the state lawsuits challenging the federal healthcare law (at least as to the individual mandate) have legal merit, are not frivolous, advance a plausible claim with an arguable legal basis, and are therefore entitled to a hearing on the merits. 

Perhaps Attorney General Cordray should rethink his position.

Thursday, August 5, 2010

A non-profit legal advocacy firm is asking the Ohio Elections Commission to dismiss a complaint from a county elections board that contends a blogger violated campaign finance laws with postings that, among other things, target “RINOs” – Republicans in Name Only.

The 1851 Center for Constitutional Law characterized a filing from the Geauga County Board of Elections against Edmund Corsi as “an apparent retaliatory action against an outspoken critic.”

Attorney Maurice Thompson, representing Mr. Corsi, said a law dealing with disclaimers on political publications for or against candidates, which the board cited in its complaint, is unconstitutional as applied to the activities of the blogger.

Mr. Thompson said the “Geauga Constitutional Council” is only the name of a website, and that Mr. Corsi’s name cannot be found on it or on any pamphlets circulated on its behalf.

“(In) fact, Mr. Corsi uses GCC as a pseudonym to effectively criticize his government and avoid retaliation,” the attorney told the OEC in a memo Wednesday.

Mr. Corsi’s blog has criticized several government and political officials, among them Edward Ryder. Mr. Ryder is chairman of the Geauga County Republican Party, and is a member of the Board of Elections.

Central to the dispute is a political “most unwanted list” of persons who are referred to as RINOs, including former Rep. Matt Dolan (R-Cleveland) and Judge Colleen O’Toole of the 11th District Court of Appeals.

State law prohibits a candidate, campaign committee, political party “or other entity,” with certain exceptions, of issuing “a form of political publication for or against a candidate” without including the name and address of those responsible.

Mr. Thompson argues in the OEC memo that the elections board improperly applied the disclaimer statute to Mr. Corsi’s activities, and infringed upon his First Amendment right to criticize the government.

“Today’s independent printers and pamphleteers are independent bloggers, who undeniably enhance the quantity of core political speech,” Mr. Thompson said.

“Application of (disclaimer law) disclosure requirements to this class undermines the principles underlying the freedom of the press, alongside Ohio’s broad protection of the publishing of sentiments, and accordingly, is patently unconstitutional,” the attorney said.

Mr. Thompson said that unless the OEC rules for Mr. Corsi, the disclaimer law would be used as “a political weapon to silence opposition, and thereby chill core political speech” that the First Amendment protects.

“Should independent bloggers in Ohio be subject to registration, political disclosure laws, and fines simply because they discuss Ohio politics, and are critical of certain politicians? The Constitution says otherwise,” Mr. Thompson said.

He said the state law violates a federal right to anonymous political speech, places an impermissible prior restraint on such speech, and applies an overbroad regulation and prohibition on political speech that is not express advocacy.

Although the case is currently scheduled for an Aug. 19 meeting of the OEC, both Mr. Thompson and the Geauga County Board of Elections have asked for a continuance.

COLUMBUS – In an apparent retaliatory action against an outspoken critic, the Geauga County Board of Elections charged independent blogger Ed Corsi with violating campaign finance laws. The elections board forwarded a complaint to the Ohio Elections Commission (OEC), where Corsi faces fines of up to $1,000 a day.

Corsi’s blog, http://www.geaugaconstitutionalcouncil.org, is critical of local government and political officials, including Geauga County Board of Elections Member Edward Ryder. Specifically, Corsi publishes a politically “most unwanted list” critical of several officials he refers to as “RINOs” (Republicans in Name Only). Ryder is chairman of the Geauga County Republican Party.

The 1851 Center for Constitutional Law and the Rutherford Institute, non-profit legal advocacy firms, today filed arguments with the OEC on behalf of Corsi. The legal organizations argue the elections board improperly and unconstitutionally applied campaign finance law to Corsi’s activities. Further, the board’s complaint infringes upon Corsi’s First Amendment right to criticize his government.

“This case has the potential to severely limit free speech in Ohio,” said 1851 Center Executive Director Maurice Thompson. “Should independent bloggers in Ohio be subject to registration, political disclosure laws, and fines simply because they discuss Ohio politics, and are critical of certain politicians? The Constitution says otherwise.”

The elections board based the complaint on O.R.C. 3517.20(A)(2). Thompson believes its action overreaches the application of the law and violates the freedom of alternative media, such as independent political bloggers.

“When applied to Corsi’s activities, the law violates the First Amendment right to anonymous political speech,” said Thompson. “It places an impermissible prior restraint on core political speech. And, it applies an overbroad regulation and/or prohibition on political speech that is not express advocacy.”

Corsi’s website and his blogger pseudonym Geauga Constitutional Council (GCC) are not registered political organizations. They do not coordinate with political campaigns. And, Corsi personally pays for all costs associated with the website and subsequent printed material.

A copy of the filing is available here.

The 1851 Center for Constitutional Law is non-profit, non-partisan legal center dedicated to protecting the constitutional rights of Ohioans from government abuse. The center litigates constitutional issues related to property rights, voting rights, regulation, taxation, and search and seizures.

The Rutherford Institute is a civil liberties organization that provides free legal services to people whose constitutional rights have been threatened or violated. More on the Institute can be found at http://www.rutherford.org.

COLUMBUS, Ohio — Some critics on Tuesday said that the city’s controversial red light camera program is fundamentally flawed and could be challenged in court.

The city said that the red light camera program is about safety, but 10 Investigates has discovered the camera system that helps spot red light violators may be based on a shaky law.

The cameras catch drivers breaking the law by running red lights. They also catch those who turn on red without stopping. The city’s system is also snaring some innocent drivers, 10 Investigates’ Paul Aker reported.

The city sent Lance Smith a $95 ticket for turning right on a red light. The city’s documents showed Columbus sent more than 15,000 similar tickets between January and April.

Smith said he was not guilty because he stopped.

“I was very upset, I couldn’t believe it,” Smith said.

After reviewing the camera’s tape, a hearing officer agreed and said Smith did not break the law.

According to the law the city enacted to start its red light camera program, it is illegal to move past the stop bar whenever there is a steady red light.

The law does not make exceptions for right-hand turns, Aker reported.

“I think it’s faulty, that system is faulty,” Smith said.

Critics of the law agreed.

Ohio law states it is OK to turn right on red, unless signs are posted that prohibit right turns.

There are no such signs at intersections with the red light cameras, Aker reported.

Columbus’ 1851 Center for Constitutional Law, a Libertarian-oriented constitutional watchdog, said the law is unconstitutional and is prepared to fight it in court.

“There is a viable challenge,” said the center’s spokesman, Maurice Thompson. “We’ll support that attorney with legal research and legal briefing and make sure that the people of Ohio are ultimately able to limit their government and to keep a little bit of their own money in their pocket.”

Public safety officials said the red light cameras are legal, but agreed that the laws surrounding them need some work.

In CPS v. Conners, Judge Robert P. Ruehlman ruled CPS’s policy of prohibiting already sold and unused public school building from being used as private or charter schools violated state law. The 1851 Center litigated the case on behalf of the Theodore Roosevelt School, a Cincinnati charter school, and its owner Dr. Roger Conners, who was sued by Cincinnati Public Schools on the eve of the school’s August opening.

Dr. Conners purchased an unused school building located in Cincinnati’s Fairmount neighborhood, where all CPS schools are in academic emergency, and 80 percent of families are of minority status and live in poverty.

CPS sued to enforce a deed restriction prohibiting the use of previously-taxpayer-owned school buildings for use by a charter or private school. The 1851 Center asserted such a restriction is void by Ohio’s public policy in favor of school choice, and cheats taxpayers of sales revenue from the buildings. The court agreed.

In his ruling, Judge Ruehlman called CPS’s deed restrictions “anti-competitive.” The judge asserted CPS was merely attempting to suppress competition from charter and other alternative schools, and thwart school choice for the parents and children of Cincinnati.

On July 6, Judge Ruehlman denied CPS’s desperate last-ditch effort to derail Theodore Roosevelt School’s opening, denying CPS’ Motion to Stay. This clears the way for the school to open in August, and area families have already enrolled over 200 children. The school will employ approximately 40 people.

A Public Records Request by the 1851 Center reveals that CPS has already paid its hand-picked law firm over $32,000 in Cincinnati taxpayers’ money for the case, at an average rate of approximately $200 per hour, and at times as much as $256 per hour.

This is quite a sum, considering that Dr. Conners only paid $30,000 for the school building, the 1851 Center offered CPS an opportunity to settle beforehand, the amount does not include the fees to be paid for the pending appeal, and of course, CPS lost.

Read the news release here.

Read the Cincinnati Enquirer’s coverage of the issue here.

Review CPS’ outrageous attorneys fees here.

Public districts can no longer stop competitors from moving in to old buildings

BY KIMBALL PERRY • Cincinnati Enquirer • June 1, 2010

CINCINNATI — For the first time, a Hamilton County judge has allowed an exclusive exception to property deed restrictions that could help thwart attempts by public school districts to block school children — and the public money that accompanies them — from going to charter schools across the country.

Common Pleas Court Judge Robert Ruehlman ruled last week the Cincinnati Public School district cannot prevent Roger Conners from opening a charter school at the old Roosevelt School at 1550 Tremont Street after he bought the building from the district. That ruling came even though the deed on the building carried a clause — that Conners knew about — prohibiting the building from ever again being used for a school.

“There has never been a court in Ohio or the country that has decided to void a deed restriction … as it relates to charter schools,” said Scott Phillips, attorney for Cincinnati Public Schools.

The ruling is ominous for school districts across the state, especially those in major metropolitan areas which no longer can use similar deed restrictions to try to keep charter schools from opening, Maurice Thompson, Conners’ attorney, said Friday.

That’s because the issue largely is about money.

“It’s done to suppress the growth of charter schools in Cincinnati,” said Thompson, director of the 1851 Center for Constitutional Law, a private, nonprofit public policy law firm with a goal of preventing government abuses.

Each student who leaves Cincinnati Public Schools for a charter school takes with him or her about $5,700 in public education money to the new school.

Thompson noted about 7,000 Cincinnati students attend charter schools, taking with them about $40 million in state money that previously went to the public schools.

Conners and others bought the building — one of nine the district auctioned off last year because they were dilapidated — for $30,000. His group noted at the time the building would be used for commercial purposes.

Shortly after the sale was complete, Conners told the public school district he planned to open a charter school — publicly financed, privately operated schools that operate independently of and compete with traditional districts — in the building.

Cincinnati Public Schools sued.

Conners argued, and Ruehlman agreed, the district’s deed restrictions violated public policy.

Thompson said it was akin to selling your house and putting a clause in the deed noting the house can’t be sold to a person of a specific race.

“Cincinnati (school district) can’t enforce this restriction, now or in the future,” Thompson said.

Other school districts have tried similar deed restrictions to limit the growth of charter schools and their drain of the public money, Thompson said. Ruehlman’s ruling, he added, ends that.

“This is actually a big issue across the state,” Thompson said, “because they are all losing money to charter schools.”

Phillips noted the “public policy exception” cited by the judge is “rarely used” and shouldn’t have been in this case. It is “highly likely” the district will appeal Ruehlman’s decision, Phillips said Friday.

Conners’ school, the Theodore Roosevelt School, has 12 classrooms and will be for kindergarten through 12th grade. It will focus on an individualized technology-based program.

Already, it has 45 students enrolled and plans to have 150 by the time school opens in mid-August, Thompson said. It has 35 employees, including 18 teachers.

Conners has spent about $100,000 to renovate the unused building and win a zoning change that allows for the building to become — again — a school.

Columbus – Cincinnati Public Schools’ (CPS) policy of prohibiting the sale of unused available public school buildings to charter schools and private schools violates state law, yesterday ruled Hamilton County Common Pleas Court Judge Robert P. Ruehlman. The judge issued the ruling immediately from the bench.

The case was won by the 1851 Center for Constitutional Law on behalf of the Theodore Roosevelt School, a Cincinnati charter school CPS sued to block from opening. The school building was unused and located in the Fairmount neighborhood, where all CPS schools are in academic emergency, and 80 percent of families are of minority status, and live in poverty.

CPS attempted to enforce a deed restriction prohibiting the use of school buildings previously owned by CPS for use by a charter or private school. The 1851 Center asserted such a restriction is void by Ohio’s public policy in favor of school choice, and cheats taxpayers of sales revenue from the buildings. The court agreed.

In his ruling, Judge Ruehlman called CPS’s deed restrictions anti-competitive and acknowledged that CPS was merely attempting to suppress competition from charter and other alternative schools, and thwart school choice for the parents and children of Cincinnati.

“The court’s decision is a landmark ruling in favor of school choice in Ohio and against adversarial school districts who attempt to block alternative schools’ right to exist,” said 1851 Center Executive Director Maurice Thompson. “School districts across the state are now on notice that Ohio law clearly and specifically protects the rights of alternative schools. And serious financial penalties could befall districts who attempt to squelch the rights of these schools.”

The ruling halts CPS’s restrictive practice and opens the district to the loss of hundreds of millions of dollars in funding from the Ohio School Facilities Commission (OSFC). Last week, OSFC member State Rep. Kris Jordan moved to stop state facilities funding to CPS because of its purported violations. Jordan, prompted by the 1851 Center’s legal action against CPS, informed the commission the school district forfeited its statutory right to project funding because of repeated violations of state charter schools provisions. The court’s ruling bolsters Jordan’s assertion. Jordan’s letter to the commission is available here.

“Over $46 million in state revenue has been directed away from Cincinnati Public Schools, and to charter schools, as over 7,000 students have left the Cincinnati Public School System for charters,” said Thompson. “Deed restrictions like the one struck down were devised to stop new charter and private schools from opening in Cincinnati, so CPS could retain students and state funds.”

The court’s ruling affirms:

• A contract term that violates public policy is void;
• A contract term that hinders the purpose of a statute is void;
• CPS’s deed restriction is void due to Ohio’s public policy in favor of transferring taxpayer-owned school buildings to community schools;
• CPS’s deed restriction is void because it is in derogation of a statewide public policy in favor of effectuating parental choice and educational opportunity through community schools; and
• Although the deed restriction is void, the conveyance must remain valid.

The 1851 Center’s filings in the case are available here and here.

The 1851 Center for Constitutional Law is non-profit, non-partisan legal center dedicated to protecting the constitutional rights of Ohioans from government abuse. The 1851 Center litigates constitutional issues related to property rights, voting rights, regulation, taxation, and search and seizures.

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Columbus – State Representative Kris Jordan, a member of the Ohio School Facilities Commission, yesterday notified commission director Richard Murray that Cincinnati Public Schools (CPS) has forfeited its statutory right to project funding because of repeated violations of state charter schools provisions.

Rep. Jordan’s action is a direct result of the 1851 Center for Constitutional Law’s ongoing litigation against CPS regarding its unfair treatment of charter schools. CPS has prohibited charter schools from purchasing buildings previously owned by the school district, a violation of state law.

“I strongly believe that violations have occurred, and, once again, I urge OSFC to follow the law and withhold CPS-related project funding until these matters are resolved,” wrote Rep. Jordan in a letter to commission director Richard Murray. As a result of the violation, CPS potentially stands to lose hundreds of millions of dollars in state funding. According to CPS’s facilities master plan, posted on its website, the state is contributing about 23 percent of the cost of an ongoing $1 billion school construction project.

“CPS has shown little regard for the laws put in place to protect charter schools from antagonistic school districts,” said Maurice Thompson, executive director of the 1851 Center. “The law clearly stipulates that CPS should lose its facilities funding as a result. Defunding by the School Facilities Commission would send a strong message to school districts unwilling to co-existing with charter schools.”

The 1851 Center is pro bono defending the Theodore Roosevelt School, a Cincinnati charter school CPS is trying to close. CPS is attempting to enforce a deed restriction prohibiting anyone from using any school building ever owned by CPS for a charter or private school. The 1851 Center asserts that such a restriction is void by Ohio’s public policy in favor of school choice, and cheats taxpayers of sales revenue from the buildings.

A copy of Rep. Jordan’s letter is available here.

The 1851 Center’s court filings in the case are available here.

The 1851 Center for Constitutional Law is non-profit, non-partisan legal center dedicated to protecting the constitutional rights of Ohioans from government abuse. The 1851 Center litigates constitutional issues related to property rights, voting rights, regulation, taxation, and search and seizures.

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