The Ohio Supreme Court has ruled that a public policy organization, a state senator and a former state representative lack standing to challenge the constitutionality of JobsOhio, a non-profit economic development corporation established by the state.
The court, in a 5-2 decision Tuesday, held that ProgressOhio.org, Sen. Michael Skindell and former representative Dennis Murray were not the proper parties under the public-right doctrine to bring a lawsuit against the JobsOhio legislation.
In a suit that originated in Franklin County Common Pleas Court in 2011, the parties argued the law that establishes JobsOhio and funds its programs with state liquor profits, violates the Ohio Constitution.
The suit was dismissed by the court, which ruled Progress Ohio didn’t have standing - that is, a legal stake or interest in a dispute to bring the controversy before a court to obtain judicial relief.
The Tenth District Court of Appeals agreed.
In their appeal to the Supreme Court, the parties conceded they had no personal stake in the matter but did claim standing based on the public-right doctrine, the Declatory Judgment Act and their status as taxpayers.
In a 24-page opinion, the Supreme Court held the public-right doctrine doesn’t apply to lawsuits filed in common pleas courts. In addition, the court concluded the doctrine didn’t give the parties standing because they didn’t demonstrate an issue that is a threat to the public. They also didn’t invoke their right to sue as taxpayers or sue under the Declatory Judgment Act in the lower courts. Consequently, the Supreme Court determined they waived those claims.
Voting in the majority were Chief Justice Maureen O’Connor and justices Judith French, Judith Ann Lanzinger and Ninth District Court of Appeals Judge Beth Whitmore, sitting in place of Justice Terrance O’Donnell, who recused himself. Justice Sharon Kennedy concurred only in the judgment and justices Paul Pfeifer and William O’Neill dissented in separate opinions.
Writing for the majority, Justice French said the question of the constitutionality of JobsOhio can still be challenged.
“We do not hold… that no person could ever have standing to challenge JobsOhio,” she wrote. “A proper party – i.e.; one with legal standing - may unquestionably contest the constitutionality of JobsOhio. As to that proper party, the courthouse doors remain open.”
In his dissent, Justice Pfeifer contended the appellants did have standing, citing a case involving the Ohio Academy of Trial Lawyers.
“The issues the appellants raise concern the structure of government rather than individual rights,” he wrote. “The fact that those issues do not lead to an injury to an individual should not prevent this court from ensuring that the principles and requirements of those constitutional provisions are maintained. By doing so, we implicitly recognize the standing of our founders. This court bears a responsibility to today’s citizens and to the framers to answer the questions the appellants pose.”
Justice O’Neill also criticized the court’s decision to not address the issue.
“The governor and Ohio General Assembly may very well be right here. Maybe it is permissible to permit a private entity to spend hundreds of millions of taxpayer dollars without the annoyance of public audits and the state auditor asking an occasional question. Maybe this new-era form of governmental accountability does not violate Ohio’s constitution. But unless we examine the issue, the people of Ohio will never have an answer to that question. It is simply shameful that the court has refused to do its job.”
When the formation of JobsOhio was being discussed in the legislature, groups such as the American Civil Liberties Union criticized the proposal for its lack of transparency.
Ohio Auditor David Yost in 2013 subpoenaed records of JobsOhio. After conducting an audit of its operations, his office issued four citations for non-compliance and four recommendations for strengthening internal controls and addressing potential conflicts of interest.
The review, completed in November 2013, covered the period from July 5, 2011 to June 30, 2012.
State Rep. Chris Redfern, D – Catawba Island, said the decision leaves several questions about JobsOhio up in the air.
“The Supreme Court did not rule JobsOhio legal,” he said Wednesday. “This is a technicality. JobsOhio is funded with public dollars and it’s a private organization. The State of Ohio manages liquor proceeds. That’s always been a public activity until John Kasich was elected. Corporate welfare in this state is running amuck.”