Ohioans challenging the state’s plan to use unclaimed funds for a new Cleveland Browns stadium got mixed messages this week. Rulings in state and federal courts offered dramatically different readings of the same set of circumstances.
In the state courts, a Franklin County Court of Common Pleas magistrate issued a preliminary injunction barring state officials from beginning to transfer money for the project.
But on a separate federal track, the U.S. Court of Appeals for the Sixth Circuit rejected those efforts, finding “the plaintiffs have ways other than injunctive relief to obtain the compensation they seek here.”
In a press release, attorneys Marc Dann and Jeff Crossman — both former Democratic elected officials — touted the state court decision.
“Instead of fulfilling its fiduciary obligations,” Dann said, “the legislature tried to permanently confiscate this money for a private sports project. The court’s ruling confirms that private property rights cannot be swept aside for economic development schemes, no matter how they are packaged.”
Crossman called it a “victory for everyday Ohioans,” adding, “the state cannot simply declare private property abandoned and take title to it without constitutional safeguards.”
And Crossman downplayed the federal decision as unsurprising and unlikely to affect the state court case.
Meanwhile, sports facilities around Ohio are lining up for their own piece of the grant program backed by unclaimed funds.
In all, 22 different facilities applied for grants. That list has since been narrowed to 14.
The facilities where the Cincinnati Bengals, Cleveland Cavaliers, Columbus Blue Jackets, Cleveland Guardians, and FC Cincinnati are all still in the running — should the program eventually go forward.
State court view
Attorneys for the state argued the plaintiffs don’t have standing to sue because they “lack an actual, imminent injury.”
The state also contends the case should be set aside because the plaintiffs haven’t exhausted their options outside of court for reclaiming their property.
Ohio’s program takes ownership of unclaimed funds that have gone untouched for ten years, and gives property owners until 2036 to make a claim even if their money was previously transferred to the state.
In short, if the plaintiffs want their money, they should just make a claim for it, and because that process hasn’t worked itself out yet, the court should leave well enough alone.
Even with the grace period, Franklin County Magistrate Jennifer Hunt determined the challengers losing title to their property “is a sufficient injury that is fairly traceable to the amended unclaimed funds law.”
She added that the federal district court found they had standing as well, even if it declined to grant a preliminary injunction.
As for the administrative process, Hunt determined the challengers are seeking a ruling on the constitutionality of the underlying statute, and that’s not an answer a state agency can give them.
Hunt also concluded that the new program amounts to a “taking” under state law. The state claimed that because the statute designated 10-year-old unclaimed funds as “abandoned” the transfers shouldn’t count. Hunt was unmoved.
She also determined that the taking was not for public use, and that the state’s minimal efforts at publicizing the program deny due process to the unclaimed funds’ rightful owners.
Hunt acknowledged that the state may have the right to take unclaimed funds that will never be claimed.
“If not taken,” she wrote, “a significant amount of these funds will inevitably languish in perpetuity benefiting no one.”
“However, the taking to accomplish such good must be for a public use and comply with due process requirements,” Hunt concluded. “Here, the amended statute fails in both aspects.”
Federal court view
As much as Hunt sided with the plaintiffs, the U.S. Circuit Court panel sided with the state.
“We begin and end with the absence of any irreparable harm,” the decision stated. “At issue in this case is only money.”
That issue is important, because the courts frown on interfering with existing law if the only harm is in dollars and cents.
It’s relatively easy, the reasoning goes, to make someone whole after the fact if the court determines they were wronged. It’s pretty hard to call that harm irreparable.
Hunt got there by focusing on potential constitutional violations; the appeals court batted those away.
“The plaintiffs have made no showing whatever that a preliminary injunction, during the pendency of this suit, is necessary to make them whole in the event they ultimately prevail on the merits of their takings claim,” the judges wrote.
The panel seem unconvinced by the plaintiffs’ claims about due process and lack of notice.
“But they had actual notice,” the judges wrote, “including from their own review of Ohio’s unclaimed-funds website, that the state held certain of their funds.”
That knowledge, they insisted, “remedied any harm from the Act’s allegedly unlawful notice provisions.”
Originally published by the Ohio Capital Journal. Republished here with permission.