Grendell v. OHIO ENVIRON. PROTECTION AGENCY

• Decision Date: 12 September 2001
• Docket Number: No. 20237.,20237.
• Parties: GRENDELL et al., Appellants, v. OHIO ENVIRONMENTAL PROTECTION AGENCY et al., Appellees.
• Court: Ohio Court of Appeals

146 Ohio App.3d 1

764 NE 2d 1067

GRENDELL et al., Appellants, v. OHIO ENVIRONMENTAL PROTECTION AGENCY et al., Appellees.

No. 20237.

Court of Appeals of Ohio, Ninth District, Summit County.

Decided September 12, 2001.

Gerald W. Phillips, for appellants.

Betty D. Montgomery, Attorney General, Douglas A. Curran and Yanna Robson-Higgins, Assistant Attorneys General, Environmental Enforcement Section, for appellee Ohio Environmental Protection Agency.

Stephen W. Funk, Ronald S. Kopp and Thomas M. Skove, for appellee Envirotest Systems Corp.

BATCHELDER, Presiding Judge.

Appellants, Timothy J. Grendell, Greg A. Bell, Keith Echmeyer, Ohio Development Company, LLC, Coalition Against Testing, and Coalition to Repeal Ohio E Check, have appealed from the decision of the Summit County Court of Common Pleas granting judgment to appellees, Ohio Environmental Protection Agency along with its director (collectively referred to as "OEPA"), and Envirotest Systems Corporation ("Envirotest"). We affirm.

I

R.C. 3704.14 was enacted by the General Assembly to implement a motor vehicle inspection and maintenance ("E-check") program in order to comply with the federal Clean Air Act Amendments, Section 7401, Title 42, U.S.Code. See R.C. 3704.14(A)(2) and 3704.14(B). The Ohio statute requires motor vehicle emissions testing in Ohio counties that have not achieved compliance with federal standards for carbon monoxide or ozone. See R.C. 3704.14(B). The legislation provides that the inspections of the emissions control systems are to be conducted by private contractors. See R.C. 3704.14(D). Accordingly, OEPA, an administrative agency of the state of Ohio, contracted with Envirotest, a private corporation, to build and operate a mandatory automobile inspection and maintenance program in Cuyahoga, Summit, Portage, Medina, Lake, Lorain, and Geauga Counties for the period from January 2, 1996 until December 31, 2005.

II

The present declaratory judgment action was commenced on November 17, 1998. Through this action, appellants have challenged the constitutionality of certain aspects of R.C. 3704.14, as well as the validity of certain aspects of the contract between OEPA and Envirotest, drawn pursuant to the statute. The following claims were raised below: (1) the contractual terms and the statutory provisions of R.C. 3704.14(D)(6)(c), allowing for liquidated damages in the event of the premature termination of the E-check program, violate the prohibition against the credit of the state being given or loaned to, or used in aid of any association or enterprise, as set forth in Section 4, Article VIII of the Ohio Constitution; (2) the contractual terms, particularly those authorizing the sharing of inspection fees and cost savings between Envirotest and OEPA, and the statutory provisions that permit the contract, constitute a joint venture association or joint association in violation of Section 4, Article VIII of the Ohio Constitution; and (3) the contractual terms and the provisions of R.C. 3704.14(D)(6)(c), authorizing liquidated damages, violate the prohibition against withdrawal of money from the treasury unless pursuant to a specific appropriation of not longer than two years as set forth in Section 22, Article II of the Ohio Constitution.

Appellees answered and sought dismissal of the action on the basis of several affirmative defenses. By journal entry on April 9, 1999, the trial judge ordered the parties to file cross-motions for summary judgment on all issues. On July 26, 2000, the trial court ruled that the liquidated damages provision in R.C. 3704.14(D)(6)(c) was not yet ripe for review and that a provision regarding the "sharing of cost savings" was moot because it was no longer part of the contract between the parties. Additionally, the trial court upheld the constitutionality of R.C. 3704.14, as well as the validity of the contract between OEPA and Envirotest, in regard to challenged matters.

This case presents a purely legal question—whether R.C. 3704.14 and the contract executed pursuant to that statute are consistent with our fundamental law in regard to the challenges raised by appellants. Accordingly, our review is de novo. Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm (1995), 73 Ohio St.3d 107, 108, 652 N.E.2d 684

.

As a preliminary matter, we observe that the statutes of Ohio enjoy a strong presumption of constitutionality. State v. Hochhausler (1996), 76 Ohio St.3d 455, 458, 668 N.E.2d 457. A party who contests the constitutionality of an Act of the General Assembly bears the burden of establishing the unconstitutionality of that law beyond a reasonable doubt. Id. "`An enactment of the General Assembly is presumed to be constitutional, and before a court may declare it unconstitutional it must appear beyond a reasonable doubt that the legislation and constitutional provisions are clearly incompatible.'" State v. Cook (1998), 83 Ohio St.3d 404, 409, 700 N.E.2d 570, quoting State ex rel. Dickman v. Defenbacher (1955), 164 Ohio St. 142, 57 O.O. 134, 128 N.E.2d 59, paragraph one of the syllabus. This presumption of validity may not be overcome unless there is a "clear conflict between the legislation in question and some particular provision or provisions of the constitution." Xenia v. Schmidt (1920), 101 Ohio St. 437, 130 N.E. 24, paragraph two of the syllabus. Moreover, "it is not the function of a reviewing court to assess the wisdom or policy of a statute but, rather, to determine whether the General Assembly acted within its legislative power." Austintown Twp. Bd. of Trustees v. Tracy (1996), 76 Ohio St.3d 353, 356, 667 N.E.2d 1174.

"[It is a] universally recognized principle that a court has nothing to do with the policy or wisdom of a statute. That is the exclusive concern of the legislative branch of the government. When the validity of a statute is challenged on constitutional grounds, the sole function of the court is to determine whether it transcends the limits of legislative power." State ex rel. Bishop v. Mt. Orab Village School Dist. Bd. of Edn. (1942), 139 Ohio St. 427, 438, 22 O.O. 494, 40 N.E.2d 913.

Finally, we emphasize that the above-stated standards of review are applied solely as to the limited issues raised by appellants below. The constitutionality of the statute and contract in other regards is not before this court, and we express no opinion beyond what is expressly contained herein.

III

Accordingly, upon these principles, we consider the errors assigned for review. The first three assignments of error are considered together because appellant argued them jointly.

First Assignment of Error

"The trial court erred in finding that there is no unconstitutional joint venture between the state of Ohio and Envirotest Systems Corporation when the contract between them provides (a) the state with direction and control over Envirotest and (b) for a sharing of profits and revenues (directly or indirectly) between Envirotest and the state of Ohio."

Second Assignment of Error

"The trial court erred in ruling that `the payment of a portion of the test fee to OEPA does not in and of itself constitute a joint venture' when such sharing of profits and revenues between the state of Ohio and a private corporation, derived by the private business of that corporation, does violate Article VIII, Section 4 of the Ohio Constitution." (Emphasis sic.)

Third Assignment of Error

"The trial court erred in granting summary judgment in favor of defendants on the issue of unconstitutional joint venture when the contract between the defendants, on its face, is prima facie evidence of a violation of Article VIII, Section 4 of the Ohio Constitution."

The essence of appellants' argument in these three assignments of error is that the contract between Envirotest and OEPA, as authorized by R.C. 3704.14, violates Section 4, Article VIII of the Ohio Constitution because it provides that (1) the state shares a portion of the inspection fees with a private corporation,¹ and (2) the state has direction and control over a private corporation. Appellants argue that these factors have created a "joint venture," "union," or "business partnership" between OEPA and Envirotest that results in a violation of Section 4, Article VIII of the Ohio Constitution.² For the following reasons, we find appellants' argument to be without merit.

A. History and Overview

A brief historical background is relevant for purposes of context. The sections of the Ohio Constitution relevant to this discussion, Sections 4 and 6 of Article VIII, were adopted following the Constitutional Convention of 1850-1851 in response to events of the early part of the nineteenth century. In an effort to encourage development at that time, Ohio and its subdivisions undertook the financing of railroad and canal companies by lending credit to and purchasing stock in aspiring new ventures. While these investments had the desired result of producing an effective transportation network, they also put public resources at risk. When many of the private interests failed, public debt soared and heavy taxation followed. As a result, Section 4, Article VIII, concerning state involvement in private enterprise, and Section 6, Article VIII, concerning the involvement of counties, cities, towns, or townships in private enterprise, were made a part of the Ohio Constitution. See, generally, C.I.V.I.C. Group v. Warren (2000), 88 Ohio St.3d 37, 39-40, 723 N.E.2d 106; Walker v. Cincinnati (1871), 21 Ohio St. 14, 53-54, 1871 WL 34; Gold, Public Aid to Private Enterprise Under the Ohio Constitution: Sections 4, 6, and 13 of Article VIII in Historical Perspective (1985), 16 U.Tol.L.Rev. 405, 407-423.

Section 4, Article VIII of the Ohio Constitution provides as follows:

"The credit of the state shall not, in any manner, be given or loaned to, or in aid of, any individual association or corporation whatever; nor shall the state ever hereafter become a joint owner, or...