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Court Upholds State Law Barring Cities from Requiring Employees to Live Within City Limits

2008-0128 and 2008-0418.  Lima v. State, Slip Opinion No. 2009-Ohio-2597.Allen App. No. 1-07-21, 177 Ohio App.3d 744, 2007-Ohio-6419, and Summit App. No. 23660, 2008-Ohio-38.  Judgments reversed.
Pfeifer, Lundberg Stratton, O'Connor, O'Donnell, and Cupp, JJ., concur.
Moyer, C.J., and Lanzinger, J., dissent.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2009/2009-Ohio-2597.pdf

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(June 10, 2009) The Supreme Court of Ohio today upheld as constitutional a 2006 state law that bars a political subdivision of the state (e.g., a city, county, township or school district) from requiring its employees, as a condition of employment, to reside within that political subdivision.

The Court’s 5-2 majority opinion, authored by Justice Paul E. Pfeifer, rejected arguments advanced by the cities of Lima and Akron that in barring enforcement of local residency requirements the General Assembly exceeded its authority and violated the cities’ home rule authority to “exercise all powers of local self-government” under Article XVIII of the Ohio Constitution.

Prior to enactment of the statute, R.C. 9.481, Lima’s city charter required all city employees who are appointed by the mayor to live within the city limits. Akron’s city charter required that all classified and unclassified city employees must reside within the city for the duration of their employment. Shortly after the legislature enacted R.C. 9.481, both cities filed court actions seeking declarations that it was unconstitutional.  

The Allen County Court of Common Pleas granted summary judgment in favor of the state, ruling that the state law prevailed over the Lima ordinance. On review, however, the 3rd District Court of Appeals reversed the trial court, holding that the statute was unconstitutional and therefore unenforceable because it violated Lima’s powers of local self-government. In the Akron case, the Summit County Court of Common Pleas ruled that the statute was constitutional. Its decision was subsequently overturned by the 9th District Court of Appeals, which held that the statewide ban on residency requirements imposed by R.C. 9.481 was not a valid exercise of the authority granted to the General Assembly by Section 34, Article II of the state constitution to pass laws for the “general welfare” of employees. The Supreme Court agreed to review both cases. [Several other cities with employee residency ordinances, including Cleveland, Toledo, Dayton and Warren, also sought Supreme Court review of the constitutionality of R.C. 9.481. In separate cases, the Court accepted their appeals, and held their cases pending its decision in the Akron and Lima cases].

Writing for the majority in today’s decision, Justice Pfeifer cited specific language in Section 34, Article II of the Ohio Constitution stating that the General Assembly may enact laws “providing for the comfort, health, safety and general welfare of all employes [sic]; and no other provision of the constitution shall impair or limit this power.” In light of this language, he wrote, a finding that the legislature enacted R.C. 9.481 for the “general welfare” of public employees pursuant to Section 34 precludes further analysis of the statute under any other provision of the constitution such as the home rule provisions of Article XVIII, because the only purpose of such analysis would be to “impair or limit” the General Assembly’s exercise of its power under Section 34.

“On at least three separate occasions, this court has upheld the constitutionality of statutes enacted pursuant to Section 34, Article II,” wrote Justice Pfeifer. “In Rocky River (v. State Emp. Relations Bd.) (1989),we relied on Section 34 in upholding the constitutionality of a statute that mandated binding arbitration between a city and its safety forces in the event of a collective-bargaining impasse, rejecting the city’s argument that the statute interfered with its home-rule powers.  ... In State ex rel. Bd. of Trustees of Police & Firemen’s Pension Fund v. Bd. of Trustees of Police Relief & Pension Fund of Martins Ferry (1967) ... we upheld as constitutional a statute that required local police pension funds to surrender their assets to a newly created state-controlled disability and pension fund for police officers and fire fighters, again rejecting objections based on home rule in favor of a broad reading of Section 34. Although the case did not involve a home-rule issue, Am. Assn. of Univ. Professors (v. Cent. State Univ.) (1999) upheld as constitutional under Section 34’s ‘broad grant of authority’ a statute that increased teaching-hour requirements for faculty at state universities.”

“R.C. 9.481 states that ‘no political subdivision shall require any of its employees, as a condition of employment, to reside in any specific area of the state.’ Considering the statutes declared constitutional in Rocky River, Am. Assn. of Univ. Professors, and Pension Fund, we conclude that R.C. 9.481 provides for the comfort and general welfare of employees. By allowing city employees more freedom of choice of residency, R.C. 9.481 provides for the employees’ comfort and general welfare. ... The General Assembly expressly declared in enacting the statute that ‘it is a matter of statewide concern to generally allow the employees of Ohio's political subdivisions to choose where to live, and that it is necessary to generally prohibit political subdivisions from requiring their employees, as a condition of employment, to reside in any specific area of the state in order to provide for the comfort, health, safety, and general welfare of those public employees.’ ... R.C. 9.481 provides for the comfort and general welfare of public employees by ensuring that they will be able to choose the municipality in which they reside. We hold that R.C. 9.481 was enacted pursuant to the authority granted in Section 34, Article II.”

Citing the explicit language in Section 34 that “no other provision” of the constitution may impair or limit the legislature’s power under Section 34,  Justice Pfeifer wrote: “This prohibition, of course, includes the ‘home rule’ provision contained in Section 3, Article XVIII. ... Thus, even if we assume that Sections 105a and 106(5b) of the Charter of the City of Akron and Lima City Ordinance 201-00 were enacted pursuant to Section 3, Article XVIII, which authorizes municipalities ‘to exercise all powers of local self-government,’ they cannot stand because they ‘impair or limit’ the power of the General Assembly to enact R.C. 9.481 pursuant to Section 34. ... We conclude that R.C. 9.481 is constitutional and, therefore, that municipalities may not require their employees to reside in a particular municipality, other than as provided in R.C. 9.481(B)(2)(b).”

The majority decision was joined by Justices Evelyn Lundberg Stratton, Maureen O’Connor, Terrence O’Donnell and Robert R. Cupp.  Justice O’Donnell also entered a separate concurring opinion that was joined by Justices Pfeifer, Stratton, and Cupp.

Justice Judith Ann Lanzinger entered a dissenting opinion that was joined by Chief Justice Thomas J. Moyer. Chief Justice Moyer also entered a dissent that was joined by Justice Lanzinger.

Justice Lanzinger expressed concern that by interpreting Section 34, Article II of the state constitution too broadly “the majority has opened the door for the General Assembly to use this section – which trumps all other constitutional provisions – in a conceivably limitless variety of situations to eviscerate municipal home rule.” She wrote that in her view R.C. 9.481 was not enacted pursuant to the legislature’s power under Section 34, Article II because that power extends only to legislation affecting the health, safety, and general welfare of employees in the performance of their job duties, and does not encompass regulating where employees live during their non-work hours.  

Consequently, she wrote, the statute is subject to review under the home rule provisions of Article XVIII, and violates those provisions by impermissibly imposing a statutory restriction on a city’s local government power to set conditions of employment for its own workers.  “Municipalities clearly have a strong interest in the qualifications of their employees and the makeup of their work forces.  Much like a private employer may seek employees who are invested members of the local community, a municipality may place a great premium on hiring individuals who exhibit a high level of commitment to that municipality. It is well settled that the terms and conditions of employment for municipal officers are purely a local matter,” wrote Justice Lanzinger. “ ... Qualifications regarding the residency of municipal employees are not aspects of the police power, but rather are matters of local self-government. Because this is not a matter of statewide concern, the ordinances should be upheld as a matter of self-governance and should prevail against R.C. 9.481 as home rule enactments.”

In his opinion, Chief Justice Moyer concurred with Justice Lanzinger’s analysis and added that, in combination with the Court’s 2008 decision in  Ohioans for Concealed Carry v. Clyde, today’s majority holding unbalances the equilibrium created in the Ohio Constitution under which local officials determine matters that have no statewide application and the General Assembly determines matters that are of general public interest.  He wrote that, in his view, the balance between state and local authority “is now tipped dramatically against the authority of local elected officials under the new conception of home rule.”

“I suggest that if such a dramatic change in the application of constitutional principles is to be created, it should be through an amendment to the Ohio Constitution and not through the decisions of this court,” wrote Chief Justice Moyer.  “Because today’s decision once again undercuts the system of dual sovereignty established in the Ohio Constitution and supported by earlier decisions of this court I respectfully dissent from the decision and the opinion of the majority.

In his opinion concurring with the majority holding, Justice O’Donnell wrote that, contrary to implications in the dissents, the majority did not base its decision on analysis of the “home rule” powers granted to municipalities by Article XVIII of the state constitution, but instead determined that the broad power vested in the General Assembly by Section 34, Article II to enact laws for the “general welfare” of employees includes legislation affecting where employees may reside as a condition of employment.

While acknowledging that the Court’s 2008 decision in Citizens for Concealed Carry v. Clyde overturned a local gun ordinance on the basis that it was in conflict with a general law of the state, Justice O’Donnell noted that the Court applied the same three-step home-rule analysis utilized in Clyde to uphold the valid exercise of home-rule authority by municipalities in Mendenhall v. Akron (2008) and Canton v. State (2002). “Thus, despite claims to the contrary, constitutional home-rule authority retains it vitality in Ohio,” wrote Justice O’Donnell.

Benjamin C. Mizer, 614.466.8980, for the State of Ohio.

Anthony L. Geiger, 419.221.5183, for the City of Lima.

Deborah M. Forfia, 330.375.2030, for the City of Akron.