Kasich wins another battle for JobsOhio

Appeals court upholds rejection of challenge

6/15/2012

COLUMBUS -- Gov. John Kasich won another court battle Thursday in his push to privatize Ohio's economic development efforts.

The Franklin County Court of Appeals denied the appeal of liberal group ProgressOhio and two Democratic state representatives of a lower court decision tossing out their constitutional challenge to Mr. Kasich's new JobsOhio agency.

Thursday's 3-0 decision upholds a December ruling by Common Pleas Judge Laurel Beatty that Progress- Ohio and two lawmakers did not have the legal standing to file the lawsuit. The ruling was written by Judge Gary Tyack, a Democrat, and agreed to by Republican Lisa L. Sadler and Democrat Julia L. Dorrian.

"I am very pleased that the court of appeals agreed with the trial court in rejecting arguments which we have always believed are erroneous," Mr. Kasich said in a statement. "Now JobsOhio can continue to move forward with its important efforts to help create a jobs-friendly climate so more Ohioans can get back to work."

Critics of Judge Beatty's ruling noted that the law that created the privatized state development entity required any lawsuit to be filed within 90 days of its creation and asked how anybody ever would have the legal standing to mount a challenge.

The appeals court said it could not address that issue until it is brought up by someone with legal standing.

Quoting a 1984 Supreme Court ruling, the judges said: "In order to have standing, a plaintiff must demonstrate some injury caused by the defendant that has a remedy in law or equity. The injury is not required to be large or economic, but it must be palpable. Furthermore, the injury cannot be merely speculative, and it must also be an injury to the plaintiff himself or to a class. An injury that is borne by the population in general, and which does not affect the plaintiff in particular, is not sufficient to confer standing."

The judges also rejected the contention by ProgressOhio and the two lawmakers that they should get legal standing allowed when raising issues of "great public interest and importance."

"There is no question that appellants' challenge raises significant concerns about at least some of the provisions of the JobsOhio Act. However, in terms of great public interest, the most one can say about the challenged legislation is that it 'makes significant changes to the organizational structure of state government.'

"This is not enough of a public concern to confer standing on appellants."

The Kasich administration already has made some changes to JobsOhio stemming from the lawsuit, but the full implementation -- including funding from state liquor profits -- has been delayed by the legal challenge.

Brian Rothenberg, executive director of ProgressOhio, said he will consult the parties to the lawsuit and attorneys before deciding whether to appeal to the Ohio Supreme Court.

"The good news is that many of the constitutional provisions we previously filed -- in fact all but one -- have been overturned or the state of Ohio has altered. But, Ohioans should be concerned that no court has ruled on the constitutionality of this issue.

"If no one has standing to find out, our constitution's provisions are essentially defenseless."

The Kasich administration was counting on $500 million for Jobs- Ohio from the purchase of future liquor profits to help balance the budget this year. But even with the court ruling, state Budget Director Tim Keen said it is too late for the money to materialize in time for the end of the fiscal year on June 30.

However, tax revenues thus far have come in nearly $400 million over estimates this year, and Medicaid has spent less than anticipated, so the state will finish the year in the black and deposit a "modest" amount into the state rainy day fund, Mr. Keen said.

He would not specify the amount, saying there are too many variables.