Sixth Circuit Blog

More on Eminent Domain and Norwood vs. Horney

Our thanks to Jason Harrow of Scotusblog for pointing out Ilya Somin's op-ed piece in Legal Times regarding the status of eminent domain after Kelo and the Ohio Supreme Court's recent decision in Norwood vs. Horney.

Gamble Succeeds as Ohio Supreme Court Unanimously Holds Part of Ohio's Eminent Domain Statute Unconstitutional

Carl and Joy Gamble finally succeeded in stopping the City of Norwood from bulldozing their home to pave the way for a $125 million shopping and office complex, as they and two other homeowners prevailed in their constitutional challenge to a municipality's use of eminent domain to aid a private developer.

In Norwood v. Horney, 2006-Ohio-3799, decided yesterday, the Ohio Supreme Court unanimously reversed the Hamilton County Court of Appeals, 161 Ohio App.3d 316, 2005-Ohio-2448, and held that:

1.   The taking of private property under the eminent domain powers of local government is constitutional pursuant to Article I, section 19, of the Ohio Constitution so long as the property is taken for "public use," but the mere fact that the appropriation would provide an economic benefit to the municipal government and the community does not, standing alone, satisfy the constitutional requirement or justify the exercise of eminent domain;

2.    Applying heightened scrutiny to review statutes or ordinances regulating the use of a local government's eminent domain powers, the use of the term "deteriorating area" in the City of Norwood's ordinance as the standard for when private property may be appropriated through eminent domain was unconstitutional on two grounds:  (i) it is overly vague and thus void under the "void-for-vagueness" doctrine, and (ii) it inherently relies on speculation about the future condition of the property to be taken rather than its condition at the time of the appropriation;  and

3.    A provision in Ohio's eminent domain statute, R.C. 163.19, prohibiting courts from enjoining the appropriation of private property after the local government has deposited compensation for the property with the court is unconstitutional as violative of the separation-of-powers doctrine.

The Ohio Supreme Court thus chartered the opposite course from that taken by the United States Supreme Court last year in its controversial decision in Kelo v. New London, 125 S. Ct. 2655 (2005).

The Cincinnati Enquirer reports that yesterday's decision "comes days before a task force is scheduled to recommend sweeping changes in eminent domain law to the Ohio General Assembly."  Laws limiting the use of eminent domain have been enacted in 26 states since the Kelo decision a year ago, and constitutional amendments to restrict eminent domain are on the ballots this fall in six states -- Florida, Georgia, Louisiana, Michigan, New Hampshire and South Carolina.

Ohio Supreme Court Holds Retired Judges May Not Preside Over Jury Trials, Even by Agreement Among the Parties

On July 12, the Ohio Supreme Court issued its opinion in a widely-followed case involving the referral of cases or submission of issues to retired judges by stipulating parties pursuant to Section 2701.10 of the Ohio Revised Code.  Justice Terrence O'Donnell's opinion for the 6-1 majority in State ex rel. Russo, Judge vs. McDonnell, Judge, at 2006-Ohio-3459, holds that the statutory authority for cases referred or issues submitted to retired judges requires that all such matters be heard and determined by the judge -- meaning that the retired judge is not authorized to preside over a jury trial, even with the consent of the parties.

In 1984, the Ohio General Assembly enacted R.C. 2701.10 to authorize the reference of litigation to a form of alternate dispute resolution commonly known as "private judging" or "rent-a-judge" by the consent of the parties.  R.C. 2701.10(B)(1) provides that "[t]he parties to any civil action or proceeding pending in any court of common pleas . . . unanimously may choose to have the action or proceeding in its entirety referred for adjudication, or to have any specific issue or question of fact or law in the action or proceeding submitted for determination, to a [voluntarily retired] judge of their choosing . . . "  As used in the statute and Gov.Jud.R. VI, a "voluntarily retired judge" means "any person who was elected to and served on an Ohio court without being defeated in an election for new or continued service on that court."  Upon filing the parties' written agreement, the judge assigned to the case "shall order the referral or submission in accordance with the agreement."  R.C. 2701.10(B)(2).  Then, upon the entry of the order of referral or submission, the chosen retired judge "shall have all of the powers, duties and authority of an active judge of the court . . ."  R.C. 2701.10(C).

Russo involved two consolidated actions seeking extraordinary writs against sitting judges of the Common Pleas Court in Cuyahoga County, Ohio.  Judge Nancy M. Russo was the judge assigned to a pending medical malpractice action styled Peffer v. Cleveland Clinic Foundation.  The parties filed their written agreement to refer the case in its entirety for a jury trial before a retired judge, but Judge Russo refused to make the referral.  Stepping into the dispute at the request of the parties, the court's administrative judge ruled that the filing of the agreement stripped Judge Russo of the authority to preside further, and ordered the case referred to the agreed-upon retired judge for jury trial.  The Court of Appeals for Cuyahoga County subsequently granted a writ of prohibition to prevent Judge Russo from exercising jurisdiction or issuing further orders in the case.

In the second underlying case, Austin v. MetroHealth Medical Center, the Common Pleas Judge assigned to the case, John D. Sutula, refused to refer the case to a retired judge for a jury trial because he believed the statute did not authorize jury trials.  On petition for an alternative writ of mandamus to compel Judge Sutula to refer the case, the Court of Appeals for Cuyahoga County at first granted the writ but then dismissed the petition on the ground it found no authority in the statute or rule permitting a retired judge to conduct a jury trial.  See State ex rel. MetroHealth Medical Center v. Sutula, 2005-Ohio-6243, par. 8, 10.

The Supreme Court in Russo premised its decision on four bases.  First, the Court held that, in construing the statute and determining the paramount consideration of legislative intent, the plain language of R.C. 2701.10(B)(1) provides that the parties and the retired judge must agree that the referred matter shall be "tried, determined, and adjudicated by that retired judge."  Moreover, R.C. 2701.10(D) provides that a "retired judge to whom a referral is made under this section shall try all of the issues on the action or proceeding, shall prepare relevant findings of fact and conclusions of law, and shall enter a judgment in the action or proceeding in the same manner as if he were an active judge of the court."

Second, in light of the fact the General Assembly omitted any mention of jury trials in the statute, the Court relied on the principle of expression unius est exclusio alterius -- "the expression of one thing implies the exclusion of another."

Third, when in the past the General Assembly intended for cases to be tried by jury, it has specifically indicated its intent with appropriate express language to that end.  The Court refused to use the guise of statutory construction to, in effect, add words to the statute that are not present in the text.

Finally, the Court rejected the argument that the statute cannot abrogate sub silentio the right to jury trial preserved by Article I, section 5, of the Ohio Constitution.  The Court noted that, since the right to trial by jury may be waived by the parties, the parties who enter into an agreement to refer a case or issues to a private judge under R.C. 2701.10 "manifestly waive their right to a jury trial" as with other alternative-dispute-resolution techniques.

Alone in dissent, Justice Pfeifer observed that R.C. 2701.10 does not directly prohibit private judges from using juries.  In light of the fact that, once a case is referred by the parties' agreement, the private judge is statutorily empowered to exercise "all of the powers, duties and authority of an active judge of the court in which the action or proceeding is pending," Justice Pfeifer noted that the powers, duties and authority of an active judge include the ability to use Civil Rule 39(C).  Civil Rule 39(C) provides that "[i]n all actions not triable of right by a jury (1) the court upon motion or on its own initiative may try any issue with an advisory jury or (2) the court, with the consent of both parties, may order a trial of any issue with a jury, whose verdict has the same effect as if trial by jury had been a matter of right."  As Justice Pfeifer concluded, if a referred case requires a bench trial, and thus is an action "not triable of right by a jury," the private judge in a referred case has the ability, pursuant to Civil Rule 39(C), to "try any issue with an advisory jury" or, "with the consent of both parties, [to] order a trial of any issue with a jury."  The dissent also observed the General Assembly failed to state explicitly that agreement to refer the entire case to a private judge is the equivalent of waiving a jury trial.

The Russo decision begs without expressly deciding or explaining several interesting questions.  The first is the question of jurisdiction.  R.C. 2701.10 is not a statute authorizing or conferring jurisdiction on the Ohio common pleas courts, and Russo says nothing new on any jurisdictional issue.  It deals instead with the proper exercise of the court's jurisdiction, and whether a retired judge selected by the consent of the parties is an authorized judicial officer empowered to exercise the court's jurisdiction in a particular manner -- i.e., by presiding over a jury trial.

The second question is the impact of the decision on scores, if not hundreds, of cases tried to jury verdict with private retired judges before the decision was announced.  There is no logical, practical or lawful justification for the Russo decision to be given retroactive effect.  It would be bad policy and worse law for the courts to upset the settled expectations of parties who had agreed to jury trials presided over by private judges.  Right or wrong, win or lose, the parties received what they bargained for under the apprehension that R.C. 2701.10 authorized the private judge to act for all purposes in place of the assigned judge, including in conducting a jury trial.  That understanding may be modified or corrected prospectively for cases that have not yet be adjudicated at the trial court level;  it should not be given retrospective application to any case in which a jury verdict was returned before July 12, 2006.

Finally, the Supreme Court in Russo implicitly invited the General Assembly to resolve the public policy considerations raised in the disparate interpretations of R.C. 2701.10 by amending the text if it wishes to confer the authority of private judges to preside over jury trials.  Given the sound and practical goals behind the use of private judges as a useful means of alternative dispute resolution, the General Assembly should accept the invitation as soon as possible.

Ohio Court of Appeals Upholds Reduced Punitive Damages Award in Securities Fraud Case

Adam Savett, author of the excellent blog Lies, Damn Lies and Forward-Looking Statements, has called to our attention this story on the recent decision from the Court of Appeals for Marion County, Ohio, upholding a judgment against Prudential Securities of $12.3 million in compensatory damages and $6.8 million in punitive damages (reduced from the jury award of $250 million) in connection with an unauthorized trading claim.

Federalist Society Critique of the Ohio Supreme Court

The Federalist Society has posted a critique of the alleged activism exhibited by the Ohio Supreme Court in the years leading up to the November 2004 elections entitled The Ohio Supreme Court:  A Court at the Crossroads.