Liberty Coins, LLC v. Goodman
| Decision Date | 08 April 2014 |
| Docket Number | No. 13-3012,13-3012 |
| Parties | LIBERTY COINS, LLC; JOHN MICHAEL TOMASO, Plaintiffs-Appellees, v. DAVID GOODMAN, Director, Ohio Department of Commerce; AMANDA MCCARTNEY, Consumer Finance Attorney, Division of Financial Institutions, Ohio Department of Commerce, Defendants-Appellants. |
| Court | United States Courts of Appeals. United States Court of Appeals (6th Circuit) |
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 14a0064p.06
Appeal from the United States District Court
for the Southern District of Ohio at Columbus
No. 2:12-cv-00998—Michael H. Watson, District Judge.
Before: MERRITT and CLAY, Circuit Judges; and STAFFORD, District Judge*
ARGUED: William J. Cole, OFFICE OF THE OHIO ATTORNEY GENERAL, Columbus, Ohio, for Appellants. Maurice A. Thompson, 1851 CENTER FOR CONSTITUTIONAL LAW, Columbus, Ohio, for Appellees. ON BRIEF: William J. Cole, Jennifer S. M. Croskey, OFFICE OF THE OHIO ATTORNEY GENERAL, Columbus, Ohio, for Appellants. Maurice A. Thompson, 1851 CENTER FOR CONSTITUTIONAL LAW, Columbus, Ohio, Curt C. Hartman, THE LAW FIRM OF CURT C. HARTMAN, Amelia, Ohio, for Appellees. Timothy Sandefur, PACIFIC LEGAL FOUNDATION, Sacramento, California, Paul M. Sherman, Erica Smith, INSTITUTE FOR JUSTICE, Arlington, Virginia, for Amici Curiae.
CLAY, Circuit Judge. Defendants, David Goodman, Director of the Ohio Department of Commerce, and Amanda McCartney, Consumer Finance Attorney of the Division of Financial Institutions, Ohio Department of Commerce, are charged with enforcement of the Ohio Precious Metals Dealers Act ("PMDA"), Ohio Revised Code § 4728. They appeal from an order entered by the United States District Court for the Southern District of Ohio, Eastern Division, granting Plaintiffs' motion for a preliminary injunction, which was later modified in a separate order. Finding that Plaintiffs were likely to succeed on the merits of their facial First Amendment commercial speech claim at trial, the district court issued a preliminary injunction prohibiting enforcement of the PMDA. We disagree with the district court's interpretation of the Ohio statute, and, for the reasons that follow, we REVERSE the district court's order granting a preliminary injunction, and REMAND for further proceedings consistent with this opinion.
Plaintiffs, Liberty Coins, LLC, and John Michael Tomaso, filed a complaint in district court pursuant to 42 U.S.C. § 1983 facially challenging the constitutionality of the PMDA, Ohio Revised Code § 4728. In their complaint for declaratory and injunctive relief, claiming they would suffer irreparable harm if a preliminary injunction were not issued, Plaintiffs allege that the PMDA (1) facially violates the First Amendment commercial speech rights of businesses dealing in precious metals throughout the state of Ohio; (2) is void for vagueness; and (3) violates the Fourth Amendment rights of businesses through what they claim are overly burdensome retention, reporting, and record-keeping requirements. See Ohio Rev. Code Ann. § 4728.06-08 (West 2014).
After a hearing held within two weeks after the filing of the complaint, the district court granted a preliminary injunction based on a finding that the PMDA facially violates the First Amendment of the United States Constitution because only those engaged in commercial speech are subject to the statute's licensing requirement; therefore, the district court found, Plaintiffs are likely to succeed on the merits of their First Amendment claim at trial. Under this preliminary injunction, the Consumer Finance Division of the Ohio Department of Commerce may not enforce the PMDA's licensing provision and therefore may not require that businesses dealing in non-exempt precious metals obtain licenses or fine those, like Plaintiffs, who previously violated the statute. Defendants sought a modification of the preliminary injunction based on whether a portion of the PMDA could be severed from the statute as a whole. The district court granted the modification in part and denied it in part.
Following that decision, Defendants timely appealed the district court's order granting the preliminary injunction and sought a stay of the enforcement of the preliminary injunction from the district court. The motion for a stay of the preliminary injunction pending appeal was denied by a three-judge panel of this Court. Reviewing the district court's preliminary injunction order for an abuse of discretion, the panel found that "[t]he district court's conclusion that the PMDA regulates commercial speech has some support in the case law, but is not dictated by precedent." Liberty Coins v. Goodman, No. 13-3012, slip op. at 2 (6th Cir. Mar. 26, 2013) (). Therefore, the panel held, it was not an abuse of the district court's discretion to grant a preliminary injunction where the law is not yet established on the issue presented. The preliminary injunction remains in force today.
Plaintiffs' requests for permanent injunctive relief based on the First Amendment and for temporary, preliminary, and permanent injunctive relief under the Fourth Amendment remain pending before the district court. Therefore, this Court is only charged in this appeal with deciding whether a preliminary injunction is proper on a facial First Amendment challenge of the constitutionality of the PMDA.
Plaintiffs are John Michael Tomaso and Liberty Coins, LLC, an Ohio Limited Liability Company with its principal place of business and storefront in Delaware County, Ohio. Tomaso owns and operates Liberty Coins, which buys, sells, and trades silver and gold jewelry, hallmark bars, ingots, numismatics, and other related items. Liberty Coins advertises its goods and services through a number of means, including a storefront and signage, newspaper advertisements, and business card distribution. These various forms of advertisements indicate that the business buys, sells, and trades gold and silver items.
Ohio Rev. Code Ann. § 4728.06 (West 2014). Additionally, the licensee Id. Each licensee must also make available "a description of all articles received by the licensee on the business day immediately preceding, together with the number of the receipt issued." Ohio Rev. Code Ann. § 4728.07 (West 2014).
In addition to the statute's reporting and record-keeping requirements, licensed precious metals dealers must comply with additional requirements. For example, "[n]o person licensed under [the PMDA] shall purchase any articles from any minor, or from any person intoxicated or under the influence of a controlled substance, from any person who is known or believed by the licensee to be a thief, or a receiver of stolen property." Ohio Rev. Code Ann. § 4728.08 (West 2014). Once the licensee purchases precious metals, the PMDA requires that the licensee retain those articles for at least "five days after the date of purchase." Ohio Rev. Code Ann. § 4728.09(A) (West 2014). Thereafter, if the head of the local police department has probable cause to believe that an item listed in the licensee's daily reports has been stolen, he will notify the licensee, who must retain the item for thirty days, unless otherwise notified by the local police department. Ohio Rev. Code Ann. § 4728.09(B) (West 2014). Any person who fails to comply with the PMDA's requirements is subject to civil action by injured parties. Additionally, dealers who fail to comply with the PMDA's provisions are guilty of a misdemeanor for the first offense and a felony of the fifth degree for each subsequent offense, and they are fined accordingly. Ohio Rev. Code Ann. § 4728.99 (West 2014).
The PMDA's requirements apply to any party that holds itself out to the public as willing to purchase precious metals. In 1982, the Ohio General Assembly amended the Ohio Pawnbroker Act (Ohio Revised Code Chapter 4727) to more clearly define "precious metals dealer," and in 1986, this definition was separated out into the newly enacted Precious Metals Dealers Act (Ohio Revised Code Chapter 4728). This version of the statute defined a precious metals dealer as "a person who is engaged in the business of purchasing articles made of or containing gold, silver, platinum, or other precious metals or jewels of any description if, in any manner, including any form of advertisement or solicitation of customers, he holds himself out to the public as willing to purchase such articles." 1986 Ohio Legis. Serv. Ann. 5-963 (West). The statute was subsequently altered to include female...
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