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Tuesday, September 9, 2014

Fred Sanborn et al. v. Hamilton County Budget Commission et al., Case no. 2013-1598
Ohio Board of Tax Appeals

Northeast Ohio Regional Sewer District v. Bath Township, Ohio, et al., Case no. 2013-1770
Eighth District Court of Appeals (Cuyahoga County)

State of Ohio v. Lauren Jones, Case no. 2013-2023
Eighth District Court of Appeals (Cuyahoga County)

State of Ohio v. Thomas M. Keenan, Case no. 2013-1731
Eighth District Court of Appeals (Cuyahoga County)

Was School District’s Shift of Funds for Capital Improvements, Resulting in Property Tax Increase, Clearly Needed for District’s Budget?

Fred Sanborn et al. v. Hamilton County Budget Commission et al., Case no. 2013-1598
Ohio Board of Tax Appeals

ISSUE: Was the decision by the Indian Hill Board of Education to move a certain amount of “inside millage” from the school district’s general revenue fund to a permanent improvement fund, causing an increase in property taxes, clearly required for the school district’s 2011 fiscal year budget?

The Indian Hill Board of Education for the Indian Hill Exempted Village School District voted in December 2009 to move 1.25 “inside mills” from the district’s general revenue fund to a permanent improvement fund to support technology infrastructure and maintain school buildings, playgrounds, and other parts of the school.

According to one of the briefs filed in the case with the Supreme Court, “mills” represent a rate of taxation, and one mill equals one-tenth of one percent. Also, there are two types of millage – inside and outside: “Inside millage is the amount of property tax permitted under the Ohio Constitution without a vote of the people taxed and this rate is limited to ten mills in each political subdivision. Taxation above the rate of ten mills is ‘outside millage’ that must be voted on and approved by the public.”

A 2005 opinion from the Ohio attorney general explains that if a school district allots a certain amount of inside millage for current operating expenses but then moves those mills to pay for other expenses, such as permanent improvements, the amount of tax collected under the outside millage may increase, within the limits already approved by voters. (That happens because of an adjustment in how the outside mills are typically reduced to prevent taxes from increasing when property values rise.) In this scenario, the school district can implement a higher property tax based on the combined total of inside millage and the adjusted outside millage. There would be no need for a vote in an election in this type of situation because the millage was already approved.

In Indian Hill, the school board submitted its fiscal year 2011 budget, including the funding for permanent improvements, to the Hamilton County Budget Commission. In April 2010, the commission approved the budget.

A group of taxpayers (Fred Sanborn, Richard and Carol Cocks, and Ruth Hubbard) appealed the decision to the Board of Tax Appeals (BTA), which in September 2013 affirmed the commission’s ruling. (Before the BTA issued its decision, one of the taxpayers participating in the appeal died.)

The remaining taxpayers exercised their right to have an appeal heard before the Ohio Supreme Court.

Attorneys for Sanborn, Cocks, and Hubbard argue that the BTA misapplied R.C. 5707.341. Assigning inside millage to another purpose, causing an increase in property taxes without a vote from the school district’s residents, is legal under the statute only when moving the funds is “clearly required” by the school district’s budget, the attorneys contend.

The taxpayers’ attorneys assert that the school district had projected budget surpluses and held more than $25 million in reserve funds before seeking approval from the school board to move the inside millage funds, so the additional tax revenue was not clearly needed for the upcoming budget year. “[T]he tax increase simply added to its surplus, at the expense of the community’s taxpayers,” they write in a brief to the court.

In addition, they claim that the BTA mistakenly relied on evidence of the school district’s budget projections for the long term, rather than the district’s needs for only the upcoming fiscal year, as required by the statute.

Quoting the law, they write, “R.C. 5707.341 prohibits an increased rate of taxation ‘unless such rate of taxation for the ensuing fiscal year is clearly required by a budget of the taxing district or political subdivision.’ Thus any consideration of the taxing district’s budgetary requirements beyond the ‘ensuing fiscal year’ is improper and impermissible.”

The county tax commission and the BTA also wrongly believed that the 2005 AG opinion restricted their ability to reject the budget with the resulting tax increase, the attorneys maintain.

“This reasoning ignores the mandate that a budget commission refuse a taxing district’s attempt to raise property taxes without a vote where that increase is not ‘clearly required for the ensuing fiscal year,’” they conclude.

Attorneys for the Indian Hill school board and school district respond that the county budget commission and the BTA have no authority to “evaluate the wisdom” of a school budget or decide whether expenditures in the budget are warranted.

They argue that the school board gave the commission a specific breakdown of the projects that would be paid for by the permanent improvement fund to be set up by moving the 1.25 inside mills, showing that the shift was “clearly required” for the capital improvements. Once that justification was made, neither the budget commission nor the BTA was permitted to make its own judgment about those expenses, they maintain.

As far as the taxpayers protest that long-term budgeting cannot be the reason for a tax increase, Indian Hill’s attorneys state in a brief to the court: “Nothing in R.C. 5705.341 prohibits the levying of funds as part of a fiscally-prudent plan, provided the levy meets other statutory requirements. That section simply requires that the ‘rate of taxation for the ensuing fiscal year is clearly required by a budget of the taxing district for political subdivision properly and lawfully adopted under this chapter[.]’ That is exactly what happened here.”

Attorneys for the Hamilton County Budget Commission also filed a short brief in the case. Making arguments similar to those from Indian Hill, they also quote the Ohio Supreme Court’s 1984 decision in Village of South Russell v. Geauga Cty. Budget Comm’n:

Under this section of the tax levy law [R.C. 5705.341], the phrase “clearly required by budget” does not require, nor grant, the authority to a budget commission to make a judgment call on the desirability of programs of the health district, or in this sense to determine the “need” of the district for the sums as set forth in the budget as submitted. The review of the budget commission of tax levies is one basically of whether there has been excessive taxation, i.e., will the tax generate more funds than shown to be needed within the budget of the district or subdivision, and whether the funds are budgeted for the appropriate purpose as voted by the electorate.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing Fred Sanborn, Richard Cocks, and Ruth Hubbard: Maurice Thompson, 614.340.9817

Representing the Indian Hill Board of Education and the Indian Hill Exempted Village School District: Harry Finke, 513.621.6464

Representing the Hamilton County Budget Commission: Thomas Scheve, 513.946.3049

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Is Regional Sewer District Permitted to Manage Stormwater?

Northeast Ohio Regional Sewer District v. Bath Township, Ohio, et al., Case no. 2013-1770
Eighth District Court of Appeals (Cuyahoga County)


Leading up to the early 1970s, the population in the Cleveland area grew and industry expanded, resulting in an increase in wastewater, problems with sewage treatment and disposal, and pollution of Lake Erie and other waterways. To address the pressing and ongoing issues, the Cuyahoga County Court of Common Pleas created a regional sewer district in 1972 to establish “‘a total waste water control system for the collection, treatment and disposal of waste water within and without the District’” by “planning, financing, constructing, operating, and controlling ‘waste water treatment and disposal facilities, major interceptor sewers, all sewer regulator systems and devices, weirs, retaining basins, storm handling facilities, and all other water pollution control facilities of the District.’”

Another court order created the sewer district’s charter in 1975. Local communities became members of the sewer district if they needed to connect to and use facilities in the district, though the district was barred from taking over local sewage collection facilities unless the district and the community agreed to it. The sewer district’s board of trustees was authorized under the charter to decide rates for sewage treatment and disposal.

In January 2010, the sewer district’s board of trustees enacted a “stormwater management code” as part of the district’s regulations. Known as Title V, the regulations created a “regional stormwater management (RSM) program” to address problems cooperatively with member communities. The regulations created a stormwater fee to fund projects for the program.

On the same day the Title V regulations were enacted, the sewer district asked the trial court to declare that the district had the authority to implement the RSM program. According to the district, several member communities planned to file lawsuits to block implementation of the program, so the district wanted to address those issues immediately and all at once with the court. Several commercial property owners also intervened as parties with interests in the case.

The court found that the sewer district had statutory and charter authority to create the RSM program. Following a trial on the validity of the stormwater fee, the court ruled in February 2012 that the fee was allowed under R.C. Chapter 6119, was not restricted by the district charter, and was not an unauthorized tax. The trial court, however, ordered revisions to some regulations, including provisions for fees and cost-sharing.

The member communities, as well as the commercial property owners, appealed the decision to the Eighth District Court of Appeals. The sewer district also filed its own appeal of parts of the trial court’s ruling. The appellate court determined that neither R.C. Chapter 6119 nor the district’s charter authorized the RSM program or the fee.

The sewer district appealed to the Ohio Supreme Court, which agreed to hear the case.

Attorneys for the Northeast Ohio Regional Sewer District contend that a district may supply water to users in and outside of the district or collect, treat, and dispose of waste water in and outside of the district, or both, according to R.C. Chapter 6119. They note that “waste water” is defined in the law as “any storm water and any water containing sewage or industrial waste or other pollutants or contaminants derived from the prior use of the water.” In the district’s view, it has authority over two types of water – water from storms, and water containing sewage and other pollutants.

“[T]he statute specifies a number of activities that may be undertaken by a 6119 District that directly constitute stormwater management,” the attorneys write in the district’s brief to the court. “For example, 6119 Districts may undertake ‘water resource projects’ for or relating to ‘stream flow improvement,’ ‘dams,’ ‘reservoirs,’ ‘impoundments,’ ‘stream monitoring systems,’ and ‘the stabilization of stream and river banks,’ all projects that relate directly to stormwater management and do not involve sewage. … Stormwater management is intended to prevent flooding, erosion, sedimentation, and loss of habitat by controlling and reducing the velocity and volume of stormwater runoff through construction activities and routine maintenance.”

They also argue that the district may charge for the use or services of any “water resource project” or any benefit of those projects, based on the R.C. 6119.09. The RSM program and the projects planned by the district all meet the definition of a “water resource project,” they assert. In addition, the property owners use the stormwater system because rain causes runoff from each property, and the district provides the service of transporting stormwater for the benefit of the region.

The district’s petition and operational plan submitted in the 1970s was agreed to by the member communities and gave the district power to manage stormwater in the region and to charge a fee for the service, the attorneys maintain. The operational plan also “affirmatively requires the district to develop and implement a plan for stormwater management,” they contend, while the member communities own and maintain their local sewage facilities and systems. Title V in the district’s regulations conforms to these mandates, they assert.

The cities of Beachwood, Bedford Heights, Brecksville, Independence, Lyndhurst, and Strongsville, as well as the villages of Glenwilllow and Oakwood, are the member communities that oppose the RSM program and fee, and are a party to this case.

Attorneys for these communities respond that because the regional sewer district was not organized as a regional water and sewer district, its only purpose under R.C. Chapter 6119 is to collect, treat, and dispose of waste water. They claim that stormwater that is uncontaminated by sewage or other pollutants is not waste water. The member communities view the definition of “waste water” as any stormwater or water that is converted to waste water when it contains sewage or other waste. Stormwater alone is not waste water, they argue.

They contend that R.C. Chapter 6119 grants no authority to control flooding and erosion, while other sections of the law do address these issues but those provisions are outside the scope of a regional sewer district.

“Through Title V, the Sewer District attempts to greatly expand its power to include management of pure stormwater that will not directly affect its sanitary sewage collection and treatment systems,” they write in the communities’ brief to the court. “The General Assembly did not grant this broad power to regional sewer districts in R.C. Chapter 6119.”

The fee that the district started charging is also invalid, they argue, because no water resource projects or regional stormwater system yet exists, so the communities and property owners are not using or benefiting from anything. They counter that the fee is actually an unauthorized tax, based on the Ohio Supreme Court’s decision in Drees Co. v. Hamilton Twp. (2012).

In addition, the regulations set out in Title V are invalid because they exceed the district’s authority under its charter, which did not grant authority for anything more than sewage treatment and fees for the treatment and disposal of sewage, the attorneys argue. They add that the sewer district lacks the power to manage flooding and water erosion from creeks, rivers, streams, and the like.

Attorneys for numerous commercial property owners also submitted a brief in which they adopt the arguments made by the member communities. The commercial property owners’ brief was submitted by The Ohio Council of Retail Merchants; The Greater Cleveland Association of Building Owners and Managers; The Cleveland Automobile Dealers Association; CADA Properties; The Northern Ohio Chapter of NAIOP, The Association for Commercial Real Estate; The Northeast Ohio Apartment Association; Snowville Service Associates; Boardwalk Partners; Creekview Commons; Fargo Warehouse; Highlands Business Park; JES Development Ltd.; Lakepoint Office Park; Landerbrook Point; Newport Square, Ltd.; Park East Office Park; Pavilion Properties; and WGG Development, Ltd.

Amicus curiae briefs supporting the position of the Northeast Ohio Regional Sewer District have been submitted by the following:

 The following have filed amicus briefs supporting the member communities opposed to the sewer district’s RSM program and fee:

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing Northeast Ohio Regional Sewer District: Mark Wallach, 216.456.3840

Representing the cities of Beachwood, Bedford Heights, Brecksville, Independence, Lyndhurst, and Strongsville, and the villages of Glenwillow and Oakwood: John Nalbandian, 513.357.9634

Representing the group of commercial property owners: Sheldon Berns, 216.831.8838

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What Is Required to Establish Probable Cause for Search Warrant?

State of Ohio v. Lauren Jones, Case no. 2013-2023
Eighth District Court of Appeals (Cuyahoga County)

ISSUE: Is evidence gathered from going through someone’s trash as part of a police investigation sufficient to establish probable cause for a search warrant?

An informant told a Cleveland police detective that a woman named “Lauren” was producing the drug methamphetamine in the area. The detective also was informed that Jennifer Chappell cooks meth and had moved her work to Rowley Avenue in Cleveland.

In December 2011, a woman reported a burglary at 1116 Rowley Avenue. A few months later, the detective said he saw Chappell at the county justice center with a woman who fit the description of “Lauren.” He found out that the woman’s name was Lauren Jones, and she lived at 1116 Rowley Avenue.

Given that information, investigators did a “trash pull” at the address and found some suspicious items. The detective then obtained a warrant to search Jones’ house. Jones was arrested and charged with illegal manufacture of drugs, assembly or possession of chemicals used to make drugs, trafficking, drug possession, and possessing criminal tools.

At trial, Jones challenged the validity of the warrant and asked the court to suppress the evidence that investigators had found. In February 2013, the court granted the motion to suppress, ruling that the warrant was not supported by probable cause.

The state appealed to the Eighth District Court of Appeals, which agreed with the trial court. The state then filed an appeal with the Ohio Supreme Court, which agreed to hear the case.

On behalf of the state, attorneys from the Cuyahoga County Prosecutor’s Office claim that the trial and appellate courts incorrectly concluded that the trash pull must be looked at in isolation when deciding whether probable cause was shown and that the evidence found is insufficient unless officials also observe the subject of the investigation engaging in criminal activity.

The attorneys contend that law enforcement may be able to do more in some cases to enhance support for probable cause, but requiring additional measures should not be mandated for all cases.

They argue that a magistrate or a judge must conduct a common-sense review of all circumstances in a case before issuing a warrant. In this case, police had information about a “Lauren” from an informant, indications that Chappell had moved her operations to Rowley Avenue, and a sighting of Chappell with Lauren Jones at the courthouse following the burglary of Jones’ Rowley Avenue home. Then, police found suspicious items in Jones’ trash.

“[A] trash pull should not be viewed in isolation but instead should be viewed in the context of background information,” they assert in a brief to the court. “These decisions recognize that every piece of the puzzle must be viewed together in determining probable cause. The background information, i.e. tips from informants, are one piece of the puzzle while the trash pull is another piece of the puzzle. As a result, a trash pull conducted just prior to the issuance of the warrant corroborating tips and background information involving drug activity will be sufficient to establish probable cause.”

The test for showing probable cause to justify a search warrant was not whether Jones was seen taking part in a crime at 1116 Rowley Avenue but whether there was “a fair probability that evidence of a criminal offense would be found [at the residence],” they conclude.

Attorneys for Jones agree that the totality of the circumstances should be reviewed when a court is deciding whether probable cause has been established for a warrant. In this case, however, the lower courts properly concluded that the facts did not support the issuance of the warrant, they argue.

The attorneys contend that none of the evidence actually tied Chappell to 1116 Rowley Avenue or showed she resided or ran a meth operation from there. Nor did activity at the house indicate drug sales, they maintain. They add that nothing demonstrates who put the trash at the curb that was later part of the trash pull or whether the trash had been disturbed by others.

While various courts have ruled that items gained from a single trash pull may be enough to show probable cause, they argue that the evidence here was not sufficient.

“[I]t was not a differing standard of law that led to the suppression of the fruits of this warrant, rather, it was the application of that same standard to the paucity of facts corroborated by the trash pull that caused this warrant’s demise,” they write in the defendant’s brief to the court. “This fact-based ruling does not define a new or onerous responsibility placed upon police in seeking search warrants. It simply mandates that the evidence presented be sufficient to establish the probability that ongoing criminal activity is occurring at a particular address, and a search is justified to end it.”

The puzzle pieces in this case did not provide enough basis for the search warrant, they conclude.

An amicus curiae brief supporting the position of the Cuyahoga County Prosecutor’s Office has been submitted by Ohio Attorney General Michael DeWine. The Office of the Cuyahoga County Public Defender has filed an amicus brief supporting Jones.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing the State of Ohio from the Cuyahoga County Prosecutor’s Office: Daniel Van, 216.443.7800

Representing Lauren Jones: Reuben Sheperd, 216.721.7700

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What Is Appropriate Sanction for Violation of Discovery Rules?

State of Ohio v. Thomas M. Keenan, Case no. 2013-1731
Eighth District Court of Appeals (Cuyahoga County)


Thomas M. Keenan owned a landscaping business and employed Anthony Klann, Edward Espinoza, and Joseph D’Ambrosio. On a September evening in 1988, Klann and his roommate, Paul Lewis, went to a Cleveland bar. Keenan, Espinoza, and D’Ambrosio arrived later that night.

After a while, the men moved to another bar in separate groups. After everyone left that bar, Keenan found Espinoza and D’Ambrosio, told them Lewis had stolen “dope” from his truck, and asked the two men to help him locate Lewis. While looking for Lewis, Keenan saw Klann walking and stopped his truck. Keenan grabbed Klann and forced him into the vehicle and demanded to know where Lewis was. Klann revealed where he and Lewis lived, and the group drove to the apartment.

When the men did not find Lewis, they went to a creek where Keenan ordered Klann to tell him where Lewis was. Keenan then murdered Klann by slashing his throat, and he was dumped in the creek.

Keenan, Espinoza, and D’Ambrosio were indicted for murder and kidnapping. A jury found Keenan guilty, and the court sentenced him to death.

In 1993, the Ohio Supreme Court reversed Keenan’s convictions and death sentence, returning the case to the trial court for a new trial. Following his new trial in 1994, Keenan was again convicted and given the death penalty.

However, a federal court then ruled in April 2012 that the state had suppressed evidence, violating Keenan’s federal constitutional rights.

In 2009, before the federal court’s ruling, Espinoza, a key witness in Keenan’s trial, died. And, in 2010, the federal court had barred the state from re-trying D’Ambrosio because the state had not informed his counsel or the courts that Espinoza had died.

The federal court in Keenan’s case ordered either that his convictions and death sentence be set aside or that another trial be held within 180 days. The court detailed seven categories of suppressed evidence, including: Lewis had been indicted, but was never prosecuted for, the rape of a roommate of Klann’s; police had identified Lewis as the anonymous caller who called them about Klann’s murder with some details that had not been released publicly; and, because of the condition of the body and the crime scene, some detectives believed Klann was not murdered at the creek.

A new trial for Keenan was scheduled for October 2012. Before the proceedings began, Keenan asked the trial court to dismiss the case with prejudice. The trial court agreed, and the state appealed to the Eighth District Court of Appeals, which affirmed the lower court’s decision. The state filed an appeal with the Ohio Supreme Court, which agreed to hear the case.

Attorneys from the Cuyahoga County Prosecutor’s Office contend that the 2012 trial court first barred the use of testimony from Keenan, Espinoza, and D’Ambrosio from earlier trials, then dismissed the case for discovery violations. The attorneys argue that trial courts must consider less severe sanctions and, in a brief to the court, quote from the Ohio Supreme Court’s decision in State v. Darmond (2013): “Although it would have been helpful for the state in opposing the dismissal motions to offer the trial court specific alternatives to dismissal with prejudice, the trial court nevertheless should not have dismissed this case with prejudice without first giving the parties the opportunity to develop the record regarding the other packages and then weighing the relevant factors.”

According to the attorneys, dismissal of the case was not the only option, and the trial court did not follow the three-part test for discovery violations set out in the Ohio Supreme Court’s ruling in State v. Parson (1983): “(1) whether the failure to disclose was a willful violation of criminal discovery rule, (2) whether foreknowledge of the undisclosed material would have benefited the accused in the preparation of a defense, and (3) whether the accused was prejudiced.”

They conclude that Keenan failed to show prejudice. In addition, they claim that Keenan’s argument that he was denied a fair trial because of the years that have passed since the 1988 murder is “an insufficient vague assertion” and does not prove prejudice.

“The state was ready to proceed to trial and was willing to stipulate to ordinarily inadmissible evidence to overcome any alleged difficulties,” they write. “Despite this, the trial court imposed multiple discovery sanctions and prohibited trial.”

Attorneys for Keenan maintain that the suppressed evidence would have benefited Keenan in his 1989 and 1994 trials. They also note that Darmond was decided six months after the trial court’s dismissal of Keenan’s case. Even so, they assert in the defendant’s brief that the court met the requirements of Darmond as well as the Parson test: “[T]he trial court expressly recognized its obligation to impose the least severe sanction consistent with the discovery rules, and it then proceeded to impose that sanction[, stating]: ‘Therefore, while the Court is aware that it has an obligation to impose the least severe sanction that is consistent with the purposes of the rules of discovery, I find that Keenan’s case is the unique and extraordinary case where the prejudice created cannot be cured by a new trial.’”

“[T]here is not a clearer example than this case of a situation where dismissal with prejudice is the only appropriate course,” Keenan’s attorneys write. “More than a quarter century has passed since someone murdered Anthony Klann in September 1988. Five witnesses are dead, including the co-defendant who also happens to be the sole witness who claimed that Keenan and D’Ambrosio committed the murder and that he allegedly saw them both do it. For some two decades, and over three prior trials, the prosecutor’s office withheld significant discoverable information to which Keenan and D’Ambrosio were entitled under the law and which would have enabled them to create reasonable doubt about the State’s theory of the case and impeach its key witnesses ….”

The circumstances of this case easily establish a violation of Keenan’s due process rights, they conclude.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing the State of Ohio from the Cuyahoga County Prosecutor’s Office: Katherine Mullin, 216.698.7919

Representing Thomas M. Keenan: Timothy Sweeney, 216.241.5003

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