The City of Riverside v. State

CourtUnited States Court of Appeals (Ohio)
Citation944 N.E.2d 281,190 Ohio App.3d 765
Docket NumberNo. 10AP–126.,10AP–126.
PartiesThe CITY OF RIVERSIDE, Appellee,v.The STATE of Ohio, Appellant.
Decision Date02 December 2010

190 Ohio App.3d 765
944 N.E.2d 281
2010 -Ohio- 5868

The STATE of Ohio, Appellant.

No. 10AP–126.

Court of Appeals of Ohio, Tenth District, Franklin County.

Decided Dec. 2, 2010.

[944 N.E.2d 285]

Altick & Corwin Co., L.P.A., and Dalma C. Grandjean, Dayton, for appellee.Richard Cordray, Attorney General, and Jeannine R. Lesperance, Washington, for appellant.Schottenstein, Zox & Dunn Co., L.P.A., Stephen L. Byron, Cleveland, Rebecca K. Schaltenbrand, and Stephen J. Smith, Columbus; and John Gotherman, Columbus, for amicus curiae the Ohio Municipal League and the National League of Cities.Lance Freeman, William E. Hunt, Acting United States Attorney, John A. DiCicco, Gilbert S. Rothenberg, and Jonathan S. Cohen, Washington; Kathleen E. Lyon, for amici curiae the United States of America.FRENCH, Judge.

[Ohio App.3d 771] {¶ 1} Defendant-appellant, the state of Ohio, appeals the Franklin County Court of Common Pleas' entry of summary judgment in favor of plaintiff-appellee, the city of Riverside, declaring R.C. 718.01(H)(11) unconstitutional. For the following reasons, we reverse.

[Ohio App.3d 772] {¶ 2} On August 22, 2008, the city filed a complaint in the Franklin County Court of Common Pleas for a declaratory judgment that R.C. 718.01(H)(11) is unconstitutional. The city alleged that R.C. 718.01(H)(11) “is contrary to 4 U.S.C. §§ 105 et seq. (commonly referred to as the Buck Act), the Equal Protection Clauses of both the United States and Ohio Constitutions, and the Ohio Constitution's ‘one-subject rule.’ ” The complaint delineated four claims for relief, each based on

[944 N.E.2d 286]

one of the asserted grounds for invalidating R.C. 718.01(H)(11), but sought a single type of relief—a declaration that that statute is unconstitutional and therefore void.

{¶ 3} The city moved for summary judgment, arguing that this case presents only questions of law and urging the trial court to declare R.C. 718.01(H)(11) “invalid and unconstitutional because it is preempted by federal law, violates Ohio's one-subject rule, and violates the Equal Protection Clauses of the state and federal constitutions.” The state agreed with the city that the dispositive issues are exclusively legal, but argued that the city failed to establish the unconstitutionality of R.C. 718.01(H)(11) under any theory. Although the state did not file a cross-motion for summary judgment, it asserted that it was entitled to judgment in its favor because the constitutionality of R.C. 718.01(H)(11) was the sole matter before the trial court.

{¶ 4} The General Assembly enacted R.C. 718.01(H)(11) as part of Am.Sub.H.B. No. 119, the 2008–2009 biennial budget bill. R.C. 718.01(H) provides that a municipal corporation may not tax the following:

(11) Beginning August 1, 2007, compensation paid to a person employed within the boundaries of a United States air force base under the jurisdiction of the United States air force that is used for the housing of members of the United States air force and is a center for air force operations, unless the person is subject to taxation because of residence or domicile. If the compensation is subject to taxation because of residence or domicile, municipal income tax shall be payable only to the municipal corporation of residence or domicile.

The statute precluded the city from taxing the income of nonresident civilian employees and contractors working at the Wright–Patterson Air Force Base, parts of which are located within the city.

{¶ 5} After hearing oral arguments, the trial court issued a decision granting the city's motion for summary judgment. The trial court addressed each of the city's arguments and concluded that R.C. 718.01(H)(11) is unconstitutional because it is preempted by 4 U.S.C. 105 et seq . (the “Buck Act”) and violates Ohio's one-subject rule. With respect to the city's equal protection argument, however, the court concluded that summary judgment was inappropriate. The court stated that the record contained insufficient facts to determine whether the city had standing to assert an equal protection claim. Nevertheless, discussing the city's [Ohio App.3d 773] equal protection argument as if standing existed, the court also stated, “While * * * in a full hearing with appropriate evidence being presented, it is possible that the State's argument on equal protection [asserting a rational basis for the statute] would fail, this court cannot say that summary judgment should be granted to [the city] on this issue.” Thus, the trial court did not finally decide the merits of the city's equal protection challenge or the city's standing to maintain that challenge. The decision states: “[T]he Motion for Summary Judgment is sustained as to the Buck Act and One Subject arguments, and is overruled on the equal protection argument. As a result, R.C. 718.01(H)(11) is unconstitutional.”

{¶ 6} The trial court's subsequent judgment entry states:

[T]he Court hereby enters judgment in favor of plaintiff City of Riverside and against defendant State of Ohio, and declares as follows:

1. [R.C. 718.01(H)(11)] is preempted by 4 U.S.C. § 106(a) (the “Buck Act”), and is therefore unconstitutional, void, and of no legal effect; and

2. [R.C. 718.01(H)(11)] violates

[944 N.E.2d 287]

Article II, Section 15(D), of the Ohio Constitution (the “one-subject” rule), and is therefore unconstitutional, void, and of no legal effect.

There being no just reason for delay, this is a final judgment entry as to the First Claim for Relief and Fourth Claim for Relief set forth in the Complaint.

The Court reserves judgment on the Second Claim for Relief and Third Claim for Relief, having found that there are genuine issues of material fact as to the claims of plaintiff City of Riverside that [R.C. 718.01(H)(11) ] violates the Equal Protection clauses of the United States and the Ohio Constitutions.

The judgment entry is stamped “Final Appealable Order” and contains a case-termination stamp.

{¶ 7} The state filed a timely notice of appeal and assigns the following as error:

Assignment of Error No. 1: The trial court erred in holding that R.C. 718.01(H)(11), which prohibits a municipal corporation from taxing compensation paid to a person employed within the boundaries of a United States air force base unless that person is subject to such tax because of a residence or domicile, is preempted by the “Buck Act,” 4 U.S.C. § 105 et seq.

Assignment of Error No. 2: The trial court erred in holding that R.C. 718.01(H)(11) was invalidly enacted as a “manifestly gross and fraudulent violation” of Ohio's “One Subject Rule” found at Section 15(D), Article II, Ohio Constitution.

Assignment of Error No. 3: The trial court erred in holding that the City of Riverside would have standing to challenge R.C. 718.01(H)(11) under the Equal [Ohio App.3d 774] Protection Clauses of the Ohio and United States Constitutions if it shows on remand that the class of people whose rights are affected by the unequal treatment suffer a “hindrance” which prevents them from seeking relief.

{¶ 8} Before addressing the state's assignments of error, we first consider a jurisdictional issue not raised by either party, namely whether the trial court's judgment entry constitutes a final, appealable order. An appellate court may raise the jurisdictional question of whether an order is final and appealable sua sponte and must dismiss an appeal that is not taken from a final, appealable order. Englert v. Nutritional Sciences, L.L.C., 10th Dist. No. 07AP–305, 2007-Ohio-5159, 2007 WL 2812985, ¶ 5, citing Chef Italiano Corp. v. Kent State Univ. (1989), 44 Ohio St.3d 86, 87, 541 N.E.2d 64; Epic Properties v. OSU LaBamba, Inc., 10th Dist. No. 07AP–44, 2007-Ohio-5021, 2007 WL 2773846, ¶ 10; In re Dissolution of Ohio Queen Breeders, 10th Dist. No. 08AP–373, 2008-Ohio-5113, 2008 WL 4444802, ¶ 7.

{¶ 9} Section 3(B)(2), Article IV of the Ohio Constitution limits this court's jurisdiction to the review of final orders. A final order “is one disposing of the whole case or some separate and distinct branch thereof.” Lantsberry v. Tilley Lamp Co. (1971), 27 Ohio St.2d 303, 306, 56 O.O.2d 179, 272 N.E.2d 127. A trial court's order is final and appealable only if it satisfies the requirements of R.C. 2505.02 and, if applicable, Civ.R. 54(B). Denham v. New Carlisle (1999), 86 Ohio St.3d 594, 596, 716 N.E.2d 184, citing Chef Italiano, 44 Ohio St.3d at 88, 541 N.E.2d 64. R.C. 2505.02(B) sets forth categories of final orders, and Civ.R. 54(B) provides as follows:

When more than one claim for relief is presented in an action whether as a claim, counterclaim, cross-claim, or third-party claim, and whether arising out of the same or separate transactions, or when multiple parties are involved, the court may enter final judgment as to

[944 N.E.2d 288]

one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay. In the absence of a determination that there is no just reason for delay, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties, shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

Thus, in multiple-claim or multiple-party actions, if the court enters judgment as to some, but not all, of the claims and/or parties, the judgment is a final, appealable order only upon the express determination that there is no just reason for delay. Gen. Acc. Ins. Co. v. Ins. Co. of N. Am. (1989), 44 Ohio St.3d 17, 22, 540 N.E.2d 266; Civ.R. 54(B).

[Ohio App.3d 775] {¶ 10} When determining whether a judgment or order is final and appealable, an appellate court engages in a two-step analysis. First, we must determine whether the...

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