Merit Decision. Court upholds Ohio’s Smoke Free Workplace Act. Wymsylo v. Bartec.

Update: On July 25, 2012 the Court refused, by a vote of 6-1, to grant reconsideration in this case.  Justice O’Donnell dissented. 

On May 23, 2012, the Supreme Court of Ohio issued a merit decision in Wymsylo* v. Bartec, Inc.* 2012-Ohio-2187.  In a unanimous decision written by Justice Lanzinger, the Court upheld the constitutionality of R.C. Chapter 3794, the Smoke Free Workplace Act. Justice O’Donnell concurred in judgment only.

Ohio’s Smoke Free Workplace Act, which with some exceptions requires proprietors of public places of employment to ban smoking in their establishments, became part of Ohio law by ballot initiative passed in November of 2006. The Ohio Department of Health (ODH) is charged with enforcement of the Act.  Zeno’s Victorian Village is a privately owned bar in Columbus which had been cited ten times for violations of the Act.  (for simplicity the appellants, which include both the bar and its owner Richard Allen, will be called  Zeno’s)

More than half of this twenty-five page opinion deals with the tortured procedural history of this case. 

ODH filed a complaint for injunctive relief ordering Zeno’s to comply with the Act and pay all outstanding fines.  Zeno’s answered and counterclaimed, arguing that Chapter 3794 was unconstitutional both facially and as applied, that past citations against it be invalidated, and that future enforcement against it be enjoined. The trial court denied ODH’s request for a permanent injunction, held that ODH had exceeded its authority by implementing a strict liability enforcement policy which exceeded the requirements of Chapter 3794, and vacated the ten past citations against Zeno’s.

Both sides appealed.  The Tenth District Court of Appeals reversed the judgment of the trial court, finding that Zeno’s was raising an as-applied challenged to the ODH method of enforcement, which required the development of a factual record.  By failing to pursue an administrative hearing and by failing to develop any necessary record, Zeno’s had waived any error. The appeals court also held that the trial court erred in vacating the ten violations because such a collateral attack on the enforcement of the ODH orders is improper.  As to the facial challenge to the Act, the court of appeals relied on one of its previous decisions upholding the validity of the Act.  Finally, as to the cross appeal, the Tenth District held ODH was entitled to an injunction.

In its decision, the Supreme Court of Ohio essentially upheld the Court of Appeals decision.  It accepted two propositions of law in which Zeno’s asserts that ODH’s enforcement methods violate the separation of powers doctrine, exceeds the state’s police powers, and constitutes a regulatory taking of property, and a third proposition of law addressing the denial of declaratory relief to Zeno’s.

Administrative law and civil procedure buffs, have at it! You’ll just love reading this decision.  For the rest of us, maybe not so much.

Like statutes and ordinances, administrative rules can be challenged both facially and as applied. The distinction is important, Justice Lanzinger wrote, because failure to raise an as-applied challenge at the first opportunity results in a waiver.  Not so with a facial challenge.

The first important holding in the case is the Court’s determination that Zeno’s separation-of-powers, police powers, and takings propositions were as-applied challenges, and because Zeno’s did not properly raise or develop these issues in the requisite administrative hearings, the Supreme Court agreed with the appeals court that Zeno’s waived these issues. Thus, they were not properly before the high Court. The high court also agreed with the court of appeals that Zeno’s attempt to invalidate its ten violations through a declaratory judgment action was an improper collateral attack. So Zeno’s was shut out from any challenge to the past ten violations.

The Court then went on to rule on Zeno’s as-applied challenges to future enforcement of the Act, using the same analysis for a law passed by ballot initiative as it would for a law enacted by the General Assembly.

The Court first rejected Zeno’s argument that the ODH strict liability policy of issuing a violation whenever it found smoking on the premises exceeded ODH’s authority under the Act. Zeno’s had argued that the smokers themselves were never cited, just the owners, and that it isn’t fair to punish the bar because its patrons smoke despite the law.  The Court found that there was substantial evidence in the record that Zeno’s had regularly either affirmatively allowed smoking to occur at the bar, or implicitly allowed it by failing to take reasonable measures to prevent patrons from smoking.  In eight of the ten cases for which Zeno’s was cited the investigator found the violations were intentional. So, on this point the Court concluded Zeno’s failed to establish it would be subject to an unlawful strict liability policy.

The Court next found that the Smoke Free Act does not unreasonably interfere with property rights or amount to a taking. “It is not unreasonable or arbitrary to hold responsible the proprietors of public places and places of employment for their failure to comply with the Smoke Free Act,” wrote Lanzinger, and the Act was thus a valid exercise of the state’s police power by the voters of Ohio.

Finally the high Court rejected Zeno’s argument, a centerpiece theme of the 1851 Center for Constitutional Law, which argued the case for Zeno’s, that the Act amounted to a regulatory taking because it “confiscates a proprietor’s control over indoor air” (awww, c’mon!). The Court found the only conceivable kind of taking issue this could raise would be a partial regulatory taking under the standards set forth in Penn Cent. Transp. Co. v. New York City, 438 U.S. 104.  Penn Central requires a factual inquiry into three factors:  “(1) the economic impact of the regulation on the claimant, (2) the extent to which the regulation has interfered with distinct investment-backed expectations, and (3) the character of the governmental action.” The Court found Zeno’s failed to demonstrate that the Act had a significant economic impact on its business, or that the Act interfered with a distinct investment-backed expectation.  Finally, the Court specifically found that “the  “taking” of appellants’ indoor air space is not the type of taking contemplated by either the Fifth Amendment to the U.S. Constitution or the Ohio Constitution, Article I, Section 19. ”

Case syllabus

R.C. Chapter 3794, the Smoke Free Workplace Act, is a valid exercise of the state’s police power by Ohio voters and does not amount to a regulatory taking.

Concluding Observations

At the time the case was argued, I felt it was a procedural nightmare for Zeno’s, and that its failure to raise the appropriate challenges in the appropriate administrative hearings would likely sink this case. I also doubted that the Court would see this as part of its takings jurisprudence.

*At the time this case was originally filed, Alvin Jackson, M.D. was Director of the Ohio Department of Health, and the case caption was Jackson v. Bartec, Inc. Theodore Wymyslo, M.D. is now  Director of the Ohio Department of Health, and has been substituted as plaintiff.  Bartec, Inc. does business as Zeno’s Victorian Village. Richard Allen, CEO and sole shareholder of Bartec Inc, is also an appellant.

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