Racing Guild of Ohio, Local 304, Service Employees Intern. Union, AFL-CIO, CLC v. Ohio State Racing Com'n

• Decision Date: 26 December 1986
• Docket Number: No. 85-1768,85-1768
• Citation: 28 Ohio St.3d 317,28 OBR 386,503 N.E.2d 1025
• Parties: , 28 O.B.R. 386 RACING GUILD OF OHIO, LOCAL 304, SERVICE EMPLOYEES INTERNATIONAL UNION, AFL- CIO, CLC, et al., Appellees and Cross-Appellants, v. OHIO STATE RACING COMMISSION et al., Appellants and Cross-Appellees.
• Court: Ohio Supreme Court

Page 317

28 Ohio St.3d 317

503 N.E.2d 1025, 28 O.B.R. 386

RACING GUILD OF OHIO, LOCAL 304, SERVICE EMPLOYEES INTERNATIONAL UNION, AFL- CIO, CLC, et al., Appellees and Cross-Appellants, v. OHIO STATE RACING COMMISSION et al., Appellants and Cross-Appellees.

No. 85-1768.

Supreme Court of Ohio.

Dec. 26, 1986.

Syllabus by the Court

1. An action for injunctive relief may be brought against the state, as defined in R.C. 2743.01(A), in a court of common pleas. (Brownfield v. State [1980], 63 Ohio St.2d 282, 407 N.E.2d 1365 , overruled in part.)

2. Contributors to a special fund have a special interest in that fund for purposes of standing. (State, ex rel. Masterson, v. State Racing Comm. [1954], 162 Ohio St. 366, 123 N.E.2d 1 , explained, approved and followed.)

On November 19, 1984, appellant and cross-appellee Ohio State Racing Commission ("commission") issued a permit to conduct horse racing at the Northfield Park facility to Northfield Park Associates ("Northfield"). A seventy-five percent owner of the partnership, Carl Milstein, was convicted of bribing an official of the federal government's Department of Housing and Urban Development and also of fraudulently diverting, to Northfield Park, money allocated by the Department of Housing and Urban Development for a housing project. Northfield left blank the space on the permit application adjacent to the question which asked whether the applicant had ever been convicted of a crime.

Subsequently, the commission approved Northfield's ten million dollar major capital improvement application for the Northfield Park facility. This approval granted Northfield a tax abatement pursuant to R.C. 3769.20. The ten million dollar figure was based on a contract with Trebmal Construction, Inc. whose president, Jeffrey I. Friedman, is the son-in-law of Northfield's owner, convicted felon Carl Milstein. The address of Northfield is the same as Trebmal Construction's address. This contract was awarded without any competitive bidding. R.C. 3769.20 allows an exemption from unrestricted competitive bidding on a major capital improvement project only where "the project is exempted by the commission because of its unusual nature."

Appellees and cross-appellants, Racing Guild of Ohio, Local 304, Service Employees International Union, AFL-CIO, CLC ("Guild") and pari-mutuel clerks, Edward E. Lynch, Daniel H. Nugent and Robert M. Hickey, Jr. ("clerks"), commenced a five-count action in common pleas court alleging that the commission failed to follow the mandate of the General Assembly and its own rules in seeking injunctive relief requiring the revocation of Northfield's operating permit, revocation of approval of the major capital improvement application, termination of the tax abatement and a refund of all taxes previously abated.

Without opinion, the court of common pleas dismissed the action with prejudice stating that the clerks lacked the standing requisite to bring the action. The court of appeals found standing based solely on the clerks' status as general taxpayers, but denied standing based upon their status as contributors to a special fund and members of the racing industry. ¹ The commission, asserting that injunctive relief may be sought against the state only in the Court of Claims, argues that the common pleas court lacked subject matter jurisdiction over this action. The commission further seeks the reversal of the appellate court's finding of standing based on the clerks' status as general taxpayers.

The cause is now before this court pursuant to the allowance of a motion and cross-motion to certify the record.

Schwarzwald, Robiner, Wolf & Rock Co., L.P.A., Melvin S. Schwarzwald and David M. Fusco, for appellees and cross-appellants.

Anthony J. Celebrezze, Jr., Atty. Gen., and John C. Albert, for appellants and cross-appellees.

CLIFFORD F. BROWN, Justice.

The main issue of this cause is whether the clerks have standing to maintain their action based upon their status as any of the following: General Fund taxpayers, contributors to a special fund, or members of the racing industry. We hold that the clerks have standing based upon their status as contributors to a special fund to pursue their action on the merits. Because we find standing based upon this status, we need not address the other standing issues. A threshold issue involves the ability of the common pleas court to obtain subject matter jurisdiction over this cause. We hold that the common pleas court correctly assumed jurisdiction over the subject matter of this action. We turn first to this jurisdictional issue.

The Court of Claims Act, enacted by the General Assembly, effective January 1, 1975, waived sovereign immunity and created a Court of Claims to have exclusive jurisdiction over suits within the contemplation of the Act. " * * * To the extent that the state has previously consented to be sued," however, the Court of Claims Act "has no applicability." R.C. 2743.02(A)(1). Thus, any type of action against the state which the courts entertained prior to the Act may still be maintained outside the Court of Claims.

For purposes of the Court of Claims Act, "state" is broadly defined in R.C. 2743.01(A) as follows:

" 'State' means the state of Ohio, including, but not limited to, the general assembly, the supreme court, the offices of all elected state officers, and all departments, boards, offices, commissions, agencies, institutions, and other instrumentalities of the state of Ohio. 'State' does not include political subdivisions." (Emphasis added.)

Thus, to the extent that any actions were permitted against state commissions, boards or agencies in a court of common pleas prior to the enactments of R.C. Chapter 2743, those actions may be maintained against the state in a court of common pleas subsequent to the enactment of R.C. Chapter 2743. R.C. 2743.02(A)(1).

Declaratory judgment actions were permitted against state agencies prior to the enactment of the Court of Claims Act. See, e.g., American Life & Accident Ins. Co. v. Jones (1949), 152 Ohio St. 287, 89 N.E.2d 301 . Thus, there is no question that the exclusive jurisdiction of the Court of Claims does not bar the courts of common pleas from obtaining subject matter jurisdiction over declaratory judgment actions against the state. Friedman v. Johnson (1985), 18 Ohio St.3d 85, 87, 480 N.E.2d 82.

The commission contends, however, that injunctive relief may be sought against the state only in the Court of Claims. We do not agree.

Ohio jurisprudence is literally riddled with examples of actions for injunctive relief proceeding against state departments, boards, agencies and commissions, all defined as the "state" under R.C. 2743.01(A), prior to the enactment of the Court of Claims Act. Both before ² and after ³ the enactment of R.C. Chapter 2743; this court entertained actions originating in the courts of common pleas involving injunctive relief against the "state" as it is now defined by R.C. 2743.01(A), without dismissing those actions on that basis.

Given the definition of "state" the General Assembly chose to adopt in R.C. 2743.01(A) and the nature of the parties in the cases cited in footnotes 2 and 3, supra, it is clear that an action for injunctive relief may be brought against the state as defined in R.C. 2743.01(A) in a court of common pleas. To the extent this opinion is inconsistent with our opinion in Brownfield v. State (1980), 63 Ohio St.2d 282, 407 N.E.2d 1365 , the Brownfield decision is overruled. ⁴

Because we find that the court of common pleas may obtain jurisdiction over the subject matter of injunctive actions against the state, we now proceed to the issue of standing.

The essence of the doctrine of standing is whether the party seeking relief has "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination." Baker v. Carr (1962), 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663.

As the court of appeals below noted, however:

"The requirement of standing is not designed to shield agencies and officials from accountability to taxpayers; instead, it denies the use of the courts to those who, while not sustaining a legal injury, nevertheless seek to air their grievances concerning the conduct of government. The doctrine of standing directs those persons to other forums."

We turn first to the clerks' standing to proceed with this cause on the merits based upon their status as contributors to a special fund.

The court of appeals found the clerks' status as contributors to a special fund insufficient as a basis for standing to proceed with this action on the merits. We disagree.

Pursuant to R.C. 3769.03, the clerks provide funding for the commission's operation through the contribution of their license fees into the commission's operating account of the state's special revenue fund.

The commission contends that our decision in State, ex rel. Masterson, v. State Racing Comm. (1954), 162 Ohio St. 366, 123 N.E.2d 1 , does not apply here because Masterson is a taxpayer-standing case, while the basis of standing asserted by the clerks involves their status as license-fee payors. Remarkably, however, the commission then demands that we apply language it quotes from the United States Supreme Court's decision in Flast v. Cohen (1968), 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947, ignoring completely the fact that Flast, like Masterson, is also a taxpayer-standing case.

More specifically, however, Masterson involves the standing doctrine in relation to contributors to a special fund, regardless of whether the contributions are in the form of taxes, fees or other monies. Thus, Masterson is relevant to the standing of the clerks to bring this action based upon their status as license-fee payors.

In Masterson, this court stated in the first paragraph of the syllabus that: " * * * a...