Part I: JobsOhio- The End of Sheward and the Public-Right Exception to Standing?

Author: Chris Tieke, Contributing Member, University of Cincinnati Law Review

ProgressOhio.org, Inc. et al. v. JobsOhio et al.:  Ohio Supreme Court to address the public right exception to standing

On November 6 the Supreme Court of Ohio heard oral arguments in the case of ProgressOhio.org, Inc. v. JobsOhio.[1]  In general, this case is about the extent and scope of the public-right exception to the standing doctrine in the state of Ohio.  The issue in this case is whether ProgressOhio.org, a 501(c)(4) organization, consisting of 350,000 members, and certain members of the Ohio General Assembly have standing to bring a constitutional challenge to the JobsOhio Act.  In particular, ProgressOhio claims that the General Assembly, in passing the JobsOhio Act, created an unconstitutionally chartered corporation (JobsOhio) that will spend government revenues secretly and without any accountability.[2]  In addition, ProgressOhio alleges that the JobsOhio Act itself violates the Ohio Constitution.  This case presents the Ohio Supreme Court with the opportunity to clarify the nature of the public-right exception to standing. 

In 2011 the Ohio General Assembly enacted the JobsOhio Act.[3]  The Act authorized the Ohio governor to file articles of incorporation to create JobsOhio, a nonprofit corporation with the purpose of promoting economic development, job creation, job training, and recruitment of business to Ohio.[4]  The new corporation was under the control of a board of directors appointed by the governor and is not a state agency.  The legislation allowed the Director of the Ohio Department of Development to enter into a contract with JobsOhio to help assist and advise the director in carrying out the functions of the department including facilitating funding to private organizations.[5]  The corporation was funded by a combination of public and private revenue, including all assets from certain operations of the Ohio Division of Liquor Control.[6]

On August 29, 2011, ProgressOhio and certain members of the Ohio General Assembly filed a complaint in the Franklin County Court of Common Pleas challenging the constitutionality of both the JobsOhio Act and the creation of the JobsOhio corporation.  The trial court, upon a motion to dismiss by JobsOhio, held that ProgressOhio did not have standing to bring the claim.  The Court of Appeals for the Tenth District affirmed.[7]  In its opinion, the Tenth District, referencing federal law, described the standing doctrine in Ohio as requiring: (1) that a plaintiff have a personal stake in the outcome of the controversy so as to assure that concrete adverseness exists […], (2) that a plaintiff demonstrate some non-speculative injury caused by the defendant that has a remedy in law or equity, and (3) that the injury is an injury to the plaintiff himself or to a class rather than to the population in general.[8]  However, the court noted the existence of a public-right exception to the personal injury requirement of standing.  This exception applies in “rare and extraordinary” circumstances where a general public right is at issue.[9]  But, the court held that the JobsOhio Act merely “made significant changes to the organizational structure of state government” and was an action that did not rise to the level of a public concern for which plaintiffs could invoke the public-right exception to standing.[10]  The Supreme Court of Ohio granted discretionary review to determine the issue of standing.  The Court should take this opportunity to limit or eliminate the public-right exception to standing because it violates the principles of the separation of powers between the judiciary and the legislative branches by allowing courts to rule on cases in which a plaintiff cannot demonstrate an actual injury.

Standing in Ohio and the Sheward Public-Right Exception

 The Ohio Constitution provides that “[t]he courts of common pleas and divisions thereof shall have such original jurisdiction over all justiciable matters and such powers of review of proceedings of administrative officers and agencies as may be provided by law.”[11]  The Supreme Court of Ohio has viewed standing as necessary to invoke the jurisdiction of the court.[12]  Standing in Ohio requires that a private party allege “such a personal stake in the outcome of the controversy, as to ensure that the dispute sought to be adjudicated will be presented in an adversary context and in a form historically viewed as capable of judicial resolution.”[13]  Additionally, the Supreme Court held in Ohio Contractors Assn. v. Bicking that a party attacking the constitutionality of a piece of legislation must demonstrate three additional elements: (1) that he or she “has suffered or is threatened with direct and concrete injury in a manner or degree different from that suffered by the public in general,” (2) “that the law in question has caused the injury,” and (3) “that the relief requested will redress the injury.”[14]

The Court in State ex rel. Ohio Academy of Trial Lawyers v. Sheward seemed to create an exception to the standing requirement that a litigant have a personal stake in the outcome.  In Sheward, the Ohio Academy of Trial Lawyers and other organizations and individuals brought a mandamus action challenging the constitutionality of tort reform legislation passed by the Ohio General Assembly.  The Supreme Court held that the plaintiffs had standing despite not suffering individualized injury.  The Court noted that “where the object of an action in mandamus and/or prohibition is to procure the enforcement or protection of a public right, the relator need not show any legal or special individual interest in the result, it being sufficient that relator is an Ohio citizen and, as such, interested in the execution of the laws of this state.”[15]  The Court in Sheward also noted that it would only invoke this public-right exception in “rare and extraordinary” circumstances where the issues sought to be litigated “are of such a high order of public concern as to justify allowing [the] action as a public action.”[16]

ProgressOhio’s Argument – Public Interest Requires the Public-Right Exception

ProgressOhio argued that the Tenth District mistakenly relied upon federal authority when it stated that standing in Ohio required that “(1) ‘a litigant must have a personal stake in the matter he or she wishes to litigate;’ (2) the injury must be ‘palpable’ and ‘to the plaintiff himself or to a class;’ and (3) ‘an injury which is borne by the population in general, and which does not affect the plaintiff in particular, is not sufficient to confer standing.’”[17]  ProgressOhio contended that Ohio courts are free to interpret the Ohio Constitution without being constrained by federal standards.  ProgressOhio further argued that applying the federal standard in this case would read into the Ohio Constitution a jurisdictional standing bar that the drafters of the Ohio Constitution purposely omitted.  Furthermore, always requiring a personal stake in the matter and not recognizing public interest standing, taxpayer standing, or statutory standing would preclude any Ohioan from challenging any acts of the legislature.[18]

Additionally, ProgressOhio argued that it had standing since the public-right exception applies to its constitutional challenges to the JobsOhio Act.  ProgressOhio read Sheward broadly as standing for the proposition that the public-right exception applies when the “issues sought to be litigated are of great importance and interest to the public, [that] they may be resolved in a form of action that involves no rights or obligations peculiar to named parties.”[19]  ProgressOhio believed that the Tenth District erred in holding that its case did not pose the type of “rare and extraordinary” circumstances envisioned by Sheward.  Rather, ProgressOhio claimed that the issues of structural government spending, indebtedness, and corporate privileges limitations in Articles VIII and XIII of the Ohio Constitution raised by the passage of the JobsOhio Act were of great importance to the public.[20]

JobsOhio’s Argument – Standing Requires a Personal Stake

JobsOhio agreed with the Tenth District’s conclusion that ProgressOhio did not have standing to bring its claim because JobsOhio did not have a personal stake in the outcome of the matter.[21]  Moreover, JobsOhio argued that ProgressOhio did not meet the additional standing requirements of Ohio Contractors Assn. v. Bicking that are necessary when an organization sues on behalf of its members, since ProgressOhio could not show that it had suffered a direct and concrete injury different from that suffered by the public in general.[22]

JobsOhio did not dispute the fact that federal decisions on standing are not binding on state courts deciding issues of Ohio law.  However, JobsOhio pointed out that state courts are free to borrow from federal standing doctrine.[23]  Moreover, since the Ohio Constitution limits common pleas court jurisdiction to “justiciable matters,” which incorporates principles of standing, JobsOhio contended that the Supreme Court of Ohio was not free to simply dispense with the requirements of standing.[24]

JobsOhio claimed that the case brought by ProgressOhio did not fit within the public-right exception for standing carved out by Sheward.  JobsOhio argued for a narrow reading of Sheward that would relax the standing requirement that a litigant have a personal stake in the matter only “in certain ‘rare and extraordinary cases’ involving constitutional challenges under this Court’s mandamus jurisdiction to statutes that act broadly to divest Ohio’s courts of jurisdiction.”[25]  According to JobsOhio, Sheward did not apply in this case because (1) the claim brought by ProgressOhio did not invoke the court’s mandamus jurisdiction, and (2) the statute at issue did not present the type of rare and extraordinary scenario in which courts have previously applied the public-right exception to standing.[26]  Moreover, JobsOhio argued that the court should not expand Sheward; rather, it should consider overruling it because doing so would recognize the duties of the other two branches of government to enforce the Ohio Constitution and would limit the judicial branch’s intervention into the executive or legislative realm to those cases where a party has suffered a concrete and particularized injury that can be redressed.[27]

Will Sheward Survive?

Ultimately this case is a referendum on Sheward.  Should the Ohio Supreme Court reverse the Tenth District and find that ProgressOhio has standing based on the public-right exception, the Court would be reinforcing the idea that there are certain public rights that are broadly shared and are not associated with any kind of personal liberty or property interest normally protected by common law. Indeed in this case, the Court would be recognizing that the plaintiff did not need to demonstrate a direct injury since the provisions of the JobsOhio Act potentially impacted the type of public rights that were vitally important to the public at large and warranted relaxing the normal standing requirements.   Moreover, the Court would be endorsing the role of the judiciary in protecting and preserving such public rights, even in the absence of any particularized and concrete injury by an individual plaintiff.

On the other hand, if the Court affirms the Tenth District’s ruling that ProgressOhio lacked standing and chooses to overrule or limit Sheward, it would cabin Sheward to those “rare and extraordinary” circumstances where actions by the legislature threatened deeply rooted legal and constitutional traditions, such as the separation of powers and judicial autonomy.  A finding of no standing would also would recognize the relationship between federal Article III standing and standing under the Ohio Constitution, in particular the requirement that in order to have standing a plaintiff must demonstrate a cognizable, concrete, and particularized injury.[28]

Should Sheward survive?

No.  Finding that ProgressOhio has standing under the Sheward public-right exception would allow an end-run around the legislative process and would further erode the separation of powers between the judicial and legislative branches.  The Ohio General Assembly, a body elected by the people of Ohio, passed the JobsOhio Act.  Allowing a minority group of the citizenry and a couple of state representatives to bring a constitutional challenge to a piece of legislation passed by a duly elected legislative body runs counter to the fundamental ideas of democracy.  The purpose of requiring that a plaintiff demonstrate a personal stake in the outcome in order to invoke standing prevents just this type of legal challenge to legislative actions.  Relaxing the standing requirements based upon Sheward would allow parties to get access to the courts by claiming that their issue is of such public interest that it must be resolved in a form of action that involves no infringement of any particularized rights or obligations of the parties involved.  This would lead to a race to the courthouse for all parties who were upset by the actions of their legislature or the orders of their executive officers.

Had the legislature decided to do so, it could have statutorily provided the personal stake necessary in order to allow the JobsOhio Act to be judicially challenged.  It chose not to.  Therefore, a plaintiff seeking to challenge the constitutionality of the legislation should be required to demonstrate a personal stake in the outcome of the controversy that is capable of being addressed with a judicial resolution.  This result preserves the integrity of the legislature and protects the principles of the separation of powers that are a hallmark of democratic societies.

This article is part of a two-article series. Check back next week for the rebuttal in Part II.