Tobacco Use Prevention & Control Found. Bd. of Trustees v. Boyce
127 Ohio St. 3d 511
| Ohio | 2010Background
- MSA with tobacco manufacturers yielded $10.1 billion to Ohio through 2025 with no spending restrictions.
- 2000: General Assembly enacted S.B. 192 creating R.C. Chapter 183; endowment fund to be custodied by treasurer but not in state treasury; Foundation as trustee for tobacco-use programs.
- 2008: S.B. 192 liquidated endowment; ALF contract attempted to transfer $190 million to ALF; foundation board rescinded; ALF intervened seeking declaration that H.B. 544 is unconstitutional.
- 2008: H.B. 544 abolished the foundation; ODH assumed residual matters; directive to liquidate endowment and split proceeds between a tobacco-use fund and a jobs fund.
- 2008–2009: Foundation supporters sought to declare endowment irrevocable; trial court enjoined transfers; appellate court held endowment not an irrevocable trust; separate rulings on contract/open meetings issues.
- Court held that the challenged laws (S.B. 192, H.B. 544) are constitutional and do not create an irrevocable trust; retroactivity and contract-clause challenges defeated; open-meetings violations acknowledged but contract invalidated
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the endowment liquidations violate the Retroactivity Clause | Miller/Weinmann/ALF contend the funds were irrevocably committed and cannot be retroactively redirected | State argues statutes apply prospectively and do not impair vested rights | Retroactivity claim rejected; statutes applied prospectively. |
| Whether the endowment funds were an irrevocable trust or vested property | Foundation supporters argue funds were a trust with private beneficiaries | State contends funds were state money, not an irrevocable trust | Endowment not an irrevocable trust; funds remain subject to legislative control. |
| Whether transferring funds to ALF violated contracts (state/federal clauses) | Foundation/ALF assert a binding contract existed governing transfers | No valid contract formed between state and ALF | No contract was formed; contract clauses not violated. |
| Whether board's actions violated Open Meetings Act to enable the transfer | Deliberations occurred in executive session in contravention of R.C. 121.22 | Board attempted to comply but failed | Board violated open meetings act; consequences limited to contract outcome (no contract formed). |
Key Cases Cited
- Van Fossen v. Babcock & Wilcox Co., 36 Ohio St.3d 100 (Ohio 1988) (retroactivity analysis; express-intent requirement for applying retroactively)
- Bielat v. Bielat, 87 Ohio St.3d 350 (Ohio 2000) (retroactivity; implied restrictions on applying new laws to prior rights)
- Miller v. Hixson, 64 Ohio St.3d 39 (Ohio 1991) (retroactive effect and property rights concepts in statutes)
- E. Liverpool v. Columbiana Cty. Budget Comm., 114 Ohio St.3d 133 (Ohio 2007) (prospective operation; no retroactivity claim available)
- State ex rel. Rothbacher v. Herbert, 176 Ohio St. 167 (Ohio 1964) (constitutional limits on transferring funds from treasury; trust creation concerns)
- Griffith v. Pub. Util. Comm., 135 Ohio St. 604 (Ohio 1939) (no General Assembly can bind future legislatures; custodial accounts do not immunize from repeal)
- Hoffmann Candy & Ice Cream Co. v. Defenbacher, 154 Ohio St. 429 (Ohio 1951) (funds not automatically immune from reallocation; public funds remain under legislative control)
- A.B.A.T.E. of Illinois, Inc. v. Giannoulias, 401 Ill. App. 3d 326 (Ill. App. 2010) (state money remains subject to plenary legislative power when no private trust is created)