State ex rel. Teamsters Local Union No. 436 v. Bd. of Cnty. Comm'rs

• Decision Date: 01 May 2012
• Docket Number: No. 2011–0569.,2011–0569.
• Citation: 132 Ohio St.3d 47,969 N.E.2d 224,2012 -Ohio- 1861
• Parties: The STATE ex rel. TEAMSTERS LOCAL UNION NO. 436 et al., Appellees, v. BOARD OF COUNTY COMMISSIONERS, Cuyahoga County, Ohio, Appellant.
• Court: Ohio Supreme Court

132 Ohio St.3d 47

969 N.E.2d 224

2012 -Ohio- 1861

The STATE ex rel. TEAMSTERS LOCAL UNION NO. 436 et al., Appellees,

v.BOARD OF COUNTY COMMISSIONERS, Cuyahoga County, Ohio, Appellant.

No. 2011–0569.

Supreme Court of Ohio.

Submitted Dec. 6, 2011.

Decided May 1, 2012.

Mangano Law Offices Co., L.P.A., Basil W. Mangano, Cleveland, and Joseph J. Guarino III, Toledo, for appellee.

William D. Mason, Cuyahoga County Prosecuting Attorney, and Dale Pelsozy, Assistant Prosecuting Attorney, for appellant.

McGEE BROWN, J.

[Ohio St.3d 47]{¶ 1} Appellant, the Board of County Commissioners of Cuyahoga County, appeals from a declaratory judgment in favor of appellees, Teamsters Local Union No. 436 and union member Kevin Lesh (collectively, “the union”), holding that the commissioners' Employee Retirement Incentive Plan (“ERIP”) was in violation of R.C. 145.297.¹

{¶ 2} For the reasons set forth, we reverse the court of appeals.

[Ohio St.3d 48]Background

{¶ 3} On November 6, 2008, the commissioners passed a resolution establishing an early-retirement incentive program, enrollment for which would be open from January 15, 2009, to January 14, 2010. The resolution made the plan available to all employees of the commissioners, except for the Sanitary Engineering Division.

{¶ 4} The union represents a bargaining unit of employees who work for the Sanitary Engineering Division of the commissioners. Pursuant to R.C. 6117.01(C), the commissioners supervise the Sanitary Engineering Division, set the compensation of its employees, and approve collective-bargaining agreements with the union. A few days before passage of the resolution, some employees of the Sanitary Engineering Division, none of whom were union members, and none of whom are parties to this appeal, had filed a grievance on behalf of all Sanitary Engineering Division employees regarding eligibility for the retirement plan. The county administrator, James McCafferty, held a hearing on the grievance on January 9, 2009. Approximately 15 Sanitary Engineering Division employees, at least four of whom were union members, attended the hearing and were given an opportunity to be heard. On January 20, 2009, the administrator issued a decision, determining that the Sanitary Engineering Division employees were not permitted to participate in the retirement plan. The administrator mailed the decision to each employee who had attended the hearing, including the four identified union members, Kevin Lesh, Jerry Tharp, Richard Dryer, and Thomas Spracale. None of the employees attempted to appeal the administrator's decision.

{¶ 5} Almost one year later, on December 22, 2009, the union sent a taxpayer demand letter to the Cuyahoga County prosecutor. The union urged the prosecutor to file an action to compel the commissioners to extend the retirement plan to the Sanitary Engineering Division employees, or to recover the funds used for the retirement plan due to its allegedly unlawful exclusion of the Sanitary Engineering Division. The prosecutor declined to initiate the requested action.

{¶ 6} On December 30, 2009, the union filed a taxpayer action against the commissioners, on behalf of all union-member Sanitary Engineering Division employees, seeking injunctive and declaratory relief. Specifically, the union sought a declaration that the commissioners violated R.C. 145.297 when they authorized the ERIP for all board employees excluding the Sanitary Engineering Division and sought an order compelling the commissioners to include the Sanitary Engineering Division in the ERIP. The union sought similar relief in a [Ohio St.3d 49]separate cause of action for declaratory judgment and in a request for a writ of mandamus in its January 7, 2010 amended complaint. In addition to denying the merits of the union's claims, the commissioners asserted that the union did not have standing to bring its taxpayer action and that it was otherwise barred from requesting equitable remedies because the Sanitary Engineering Division employees had failed to exhaust their administrative remedies.

{¶ 7} Noting that the union had brought the present action mere days before the ERIP was due to terminate, the trial court denied the union's request for injunctive relief and its action in mandamus, in an entry issued on January 22, 2010. However, the trial court did grant the union's prayer for declaratory relief and held that the commissioners' failure to include the Sanitary Engineering Division as part of the “employing unit” that was eligible for the ERIP did not comply with the definition of “employing unit” in R.C. 145.297 and that the commissioners were therefore in violation of the statute.

{¶ 8} The commissioners appealed to the Eighth District Court of Appeals, which affirmed the trial court's judgment. State ex rel. Teamsters Local Union No. 436 v. Cuyahoga Cty. Bd. of Commrs., 194 Ohio App.3d 258, 2011-Ohio-820, 955 N.E.2d 1020. We accepted discretionary jurisdiction to hear the commissioners' appeal. 128 Ohio St.3d 1556, 2011-Ohio-2905, 949 N.E.2d 43.

Analysis

{¶ 9} The commissioners raise three propositions of law: first, that the commissioners had the budgetary discretion to exclude one or more of its subordinate divisions from participating in the ERIP; second, that the union-represented Sanitary Engineering Division employees did not have standing to initiate a taxpayer suit, because they did not seek to vindicate a public right; and third, that the Sanitary Engineering Division employees were required to exhaust the available administrative remedies prior to filing the action. Because our resolution of the issues of taxpayer standing and exhaustion of administrative remedies is dispositive, we will address them first.

Taxpayer Standing

{¶ 10} Before a court may consider the merits of a party's legal claim, the party seeking relief must establish that he or she has standing to bring the claim. State ex rel. Ohio Academy of Trial Lawyers v. Sheward, 86 Ohio St.3d 451, 469, 715 N.E.2d 1062 (1999). The issue of standing determines “whether a litigant is entitled to have a court determine the merits of the issues presented.” Ohio Contrs. Assn. v. Bicking, 71 Ohio St.3d 318, 320, 643 N.E.2d 1088 (1994). Whether a party has established standing to bring an action before the court is a question of law, which we review de novo. Cuyahoga Cty. Bd. of Commrs. v. State, 112 Ohio St.3d 59, 2006-Ohio-6499, 858 N.E.2d 330, ¶ 23.

[Ohio St.3d 50]{¶ 11} An analysis of standing in a statutory taxpayer action against a county entity must begin with R.C. 309.12, which allows a county prosecutor to initiate legal action to restrain the contemplated misapplication of county funds or completion of illegal contracts or to recover funds or damages from illegal contracts that have been executed or funds that have been misapplied. If a taxpayer presents a written request to the county prosecutor to take action pursuant to R.C. 309.12 and is denied assistance from the county prosecutor, the taxpayer may initiate his own action on behalf of the county. R.C. 309.13. In addition to the satisfaction of the foregoing formal requirement, the taxpayer must also demonstrate that the remedy sought will benefit the public in order to have standing. State ex rel. White v. Cleveland, 34 Ohio St.2d 37, 295 N.E.2d 665 (1973).

{¶ 12} “ ‘ “There are serious objections against allowing mere interlopers to meddle with the affairs of the state, and it is not usually allowed unless under circumstances when the public injury by its refusal will be serious.” ’ (Emphasis added.)” State ex rel. Academy of Trial Lawyers v. Sheward, 86 Ohio St.3d at 472, 715 N.E.2d 1062, quoting State ex rel. Trauger v. Nash, 66 Ohio St. 612, 616, 64 N.E. 558 (1902), quoting People ex rel. Ayres v. Bd. of State Auds., 42 Mich. 422, 429, 4 N.W. 274 (1888). Accordingly, only “when the issues sought to be litigated are of great importance and interest to the public [may they] be resolved in a form of action that involves no rights or obligations peculiar to named parties.” Sheward at 471, 715 N.E.2d 1062. Conversely, when a remedy being pursued is one that is merely for the individual taxpayer's benefit, the taxpayer cannot claim that he is vindicating a public right, and he will not have standing to pursue a taxpayer action. State ex rel. Caspar v. Dayton, 53 Ohio St.3d 16, 20, 558 N.E.2d 49 (1990).

{¶ 13} In Caspar, police officers alleged that the city of Dayton was in violation of R.C. 9.44 by not recognizing the officers' prior public service when computing the amount of each officer's supplemental vacation leave. Id. at 16, 558 N.E.2d 49. The police officers sought a writ of mandamus to compel the city to correct its computation process and provide additional leave benefits. This court held that the goal of compelling fringe benefits for the police officers' own benefit did not constitute the goal of enforcing a public right and that the police officers' right to vacation pay did not constitute a public right for purposes of a statutory taxpayer action. Id. at 20, 558 N.E.2d 49.

{¶ 14} Since Caspar, our state's appellate courts have generally concluded that taxpayers were not attempting to benefit the public in similar circumstances. E.g., Cleveland ex rel. O'Malley v. White, 148 Ohio App.3d 564, 2002-Ohio-3633, 774 N.E.2d 337, ¶ 42–47 (8th Dist.) (holding that electricians' union lacked taxpayer standing to enjoin the city from using non–electricians to perform certain [Ohio St.3d 51]work, because public safety was not a true concern, and the union was merely protecting its members' interests in keeping the work for themselves); Assn. of Cleveland Fire Fighters, Local 93 v. Cleveland, 156 Ohio App.3d 368, 2004-Ohio-994, 806 N.E.2d 170, ¶ 16 (8th Dist.) (holding that firefighters' union lacked taxpayer standing to compel back pay and wage differentiation between different ranks of officers because the allegation of a public benefit was a pretext for...