Aarti Hospitality, LLC v. City of Grove City, Ohio

• Decision Date: 16 May 2007
• Docket Number: No. 2:06-cv-886.,2:06-cv-886.
• Citation: 486 F.Supp.2d 696
• Parties: AARTI HOSPITALITY, LLC, d/b/a Hilton Garden Inn, et al., Plaintiffs, v. CITY OF GROVE CITY, OHIO, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

486 F.Supp.2d 696

AARTI HOSPITALITY, LLC, d/b/a Hilton Garden Inn, et al., Plaintiffs, v. CITY OF GROVE CITY, OHIO, et al., Defendants.

No. 2:06-cv-886.

United States District Court, S.D. Ohio, Eastern Division.

May 16, 2007.

Michael Lee Close, Charles William Klausman, IV, Mark C. Melko, Wiles, Boyle, Burkholder & Bringardner Co., L.P.A.,Columbus, OH, for Plaintiffs.

Robert Henry Stoffers, Mazanec Raskin & Ryder Co. LPA, Cleveland, OH, John Frederick Stock, Benesch Friedlander Coplan & Aronoff, Nick A. Soulas, Jr., Columbus, OH, for Defendants.

OPINION AND ORDER

FROST, District Judge.

This matter is before the Court for consideration of a February 26, 2007 motion for judgment on the pleadings on Counts 1 through 5 filed by Defendants Drury Inns, Inc. and Bob Evans Farms, Inc. (Doc. # 45), Plaintiffs' memorandum in opposition (Doc. # 55), and Defendants's reply memorandum (Doc. # 62). For the reasons that follow, this Court finds the motion well taken.

I. Background

Plaintiffs are a assembly of corporate entities doing business as various hotels and lodging establishments in and around Grove City, Ohio that have taken issue with Defendant Grove City's 2003 amendment of a 1986 ordinance that purported to expand the boundaries of a community reinvestment area ("CRA"). This CRA allowed Defendant Drury Inns, Inc. to enjoy a 15-year tax abatement related to the construction of a new $14 million hotel on property purchased from Defendant Bob Evans, which also received an abatement for the construction of a new $2.5 million restaurant.

Asserting that they are at a competitive disadvantage, Plaintiffs contend that they are unable to take advantage of the abatement unless they undertake remodeling or construct new improvements upon their properties. Plaintiffs therefore filed an action against the previously identified defendants, as well as other defendants, in the Franklin County Court of Common Pleas on September 27, 2006. (Doc. # 2-3.) The majority of the defendants subsequently joined in the removal of the action to this Court on October 20, 2006. (Doc. # 2-1.)

On December 6, 2006, Plaintiffs filed a successful motion for leave to file an amended complaint. (Doc. # 29.) The pleading amendments essentially presented new claims against Defendant Grove City, which opposed the amendments and unsuccessfully sought their dismissal. (Docs.# 34, 58.) While Grove City's motion to dismiss was pending, Defendants Drury Inns, Inc. and Bob Evans Farms, Inc. ("Defendants") also filed a joint motion for judgment on the pleadings (Doc. # 45). The parties have completed briefing on the motion for judgment on the pleadings, which is ripe for disposition.

II. Discussion

A. Standards Involved

Citing a purported lack of standing, Defendants move to dismiss Counts One through Five of Plaintiffs' amendment complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(c).¹ Rule 12(c) provides that "[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." In considering such a motion, the Court must "construe the complaint in the light most favorable to plaintiff[s], accept all of the complaint's factual allegations as true, and determine whether plaintiff[s] undoubtedly can prove no set of facts in support of [their] claim[s] that would entitle [them] to relief." Ziegler v. IBP Hog Market, Inc., 249 F.3d 509, 512 (6th Cir.2001). See also Mixon v. Ohio, 193 F.3d 389, 400 (6th Cir.1999). The Court need not, however, accept as true legal conclusions or unwarranted factual inferences. Mixon, 193 F.3d at 400.

Rule 12(b)(1) in turn enables Defendants to raise by motion the defense of "lack of jurisdiction over the subject matter." The Sixth Circuit has explained that "where a defendant argues that the plaintiff has not alleged sufficient facts in [the] complaint to create subject matter jurisdiction, the trial court takes the allegations in the complaint as true." Nichols v. Muskingum Coll., 318 F.3d 674, 677 (6th Cir. 2003) (citations omitted). For the purpose of determining whether to grant a motion to dismiss made pursuant to a claim of lack of jurisdiction, Plaintiffs bear the burden of proving jurisdiction. Id.; Moir v. Greater Cleveland Reg'l Transit Auth., 895 F.2d 266, 269 (6th Cir.1990).

B. Analysis

Counts One through Five of the amended complaint present various theories under which Plaintiffs seek a declaratory judgment that the 2003 ordinance is void or invalid.² Defendants move for judgment on the pleadings on these counts on the grounds that Plaintiffs lack standing.

The Sixth Circuit Court of Appeals has recently explained again the threshold requirement of standing:

[N]o plaintiff can litigate a case in federal court without establishing constitutional standing, which requires a showing that the plaintiff has suffered (1) an injury that is (2) "fairly traceable to the defendant's allegedly unlawful conduct" and that is (3) "likely to be redressed by the requested relief." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). These three factors constitute "the irreducible constitutional minimum of standing." Id. To ignore these minimum requirements "would convert the judicial process into `no more than a vehicle for the vindication of the value interests of the concerned bystanders.'" Valley Forge Christian Coll. v. Americans United for Separation of Church and State, 454 U.S. 464, 473, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982) (quoting United States v. SCRAP, 412 U.S. 669, 687, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973)). Prime Media, Inc. v. City of Brentwood, 485 F.3d 343, 348-49 (6th Cir.2007). See also Fieger v. Ferry, 471 F.3d 637, 643 (6th Cir.2006) ("to establish standing to bring suit, a plaintiff must show that (1) he or she has suffered an `injury in fact' that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision" (quoting Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000))). Thus, the appellate court concluded, "the constitutional standing requirement of a `distinct and palpable injury that is likely to be redressed if the requested relief is granted ... states a limitation on judicial power, not merely a factor to be balanced in the weighing of so-called `prudential' considerations.'" Prime Media, Inc., at 348-49 (quoting Valley Forge Christian Coll., 454 U.S. at 475, 102 S.Ct. 752).

Ohio's standing requirement echoes this concern with a distinct and palpable injury in fact. State law provides:

In order to obtain declaratory relief, [a] plaintiff must establish (1) that a real controversy exists between the parties, (2) that the controversy is justiciable, and (3) that speedy relief is necessary to preserve the rights of the parties.... Inherent in these requirements is the principle that Ohio courts do not render advisory opinions.

R.A.S. Entertainment, Inc. v. Cleveland, 130 Ohio App.3d 125, 128, 719 N.E.2d 641, 643-44 (1998) (citing Burger Brewing Co. v. Liquor Control Comm'n, 34 Ohio St.2d 93, 296 N.E.2d 261, (1973); Haig v. Ohio State Bd. of Educ., 62 Ohio St.3d 507, 584 N.E.2d 704; Egan v. Nat'l Distillers & Chem. Corp., 25 Ohio St.3d 176, 495 N.E.2d 904 (1986)). These requirements mandate that application of an ordinance at the heart of a declaratory judgment action would impose a hardship on the party seeking the declaration. Burger Brewing Co., 34 Ohio St.2d at 97-8, 296 N.E.2d at 264-65. In other words, "the issue of standing depends upon whether the challenging party can demonstrate that he `has suffered or will suffer a specific injury, that the injury is traceable to the challenged action, and that it is likely that the injury will be redressed by a favorable decision." Board of Trs. of Sylvania Twp. v. Bd. of Comm'rs of Lucas County, No. L-01-1447, 2002 WL 1729895, at *3 (Ohio App. 6th Dist. July 26, 2002) (quoting Wilmington City Sch. Dist. Bd. of Educ. v. Bd. of Comm'rs of Clinton Co., 141 Ohio App.3d 232, 238, 750 N.E.2d 1141, 1146 (Ohio App. 12th Dist.2000)).

Plaintiffs argue that they have standing via Ohio Rev.Code § 2721.03, which provides in relevant part:

[A]ny person whose rights, status, or other legal relations are affected by a constitutional provision, statute, rule as defined in section 119.01 of the Revised Code, municipal ordinance, township resolution, contract or franchise may have determined any question of construction or validity arising under the instrument, constitutional provision, statute, rule ordinance, resolution, contract, or franchise and obtain a declaration of rights, status, or other legal relations under it.

Ohio Rev.Code § 2721.03. But as Defendants correctly note, the statute does not confer standing, however, because § 2721.03 simply "represent[s][a] legislative grant[] of jurisdiction to Ohio courts under certain circumstances to hear and decide declaratory judgment actions. That declaratory relief is an available remedy is a separate question from one's standing to file such an action." Holcomb v. Schlichter, 34 Ohio App.3d 161, 164, 517 N.E.2d 1001,1004-05 (Ohio App. 12th Dist. 1986). The statute itself is simply a mechanism through which an appropriate plaintiff may proceed, but the statute does not create the appropriate plaintiff. See Walgash v. Bd. of Trs. of Monclova Twp., Lucas County, No. L-80-105, 1981 WL 5518, at *4 (Ohio App. 6th Dist. Mar. 20, 1981) ("While R.C. 2721.03 creates the right to bring a declaratory judgment action to determine the validity of an ordinance, the requirements of justiciability, including standing and ripeness, must still be met before a court can entertain the action."). Plaintiffs must...