Lead Opinion
Plaintiffs, eight hotels in Grove City, Ohio, alleged that the city discriminated against them based on the ethnic background of their owners and denied them procedural due process when it passed a tax abatement ordinance and approved certain design features for the benefit of plaintiffs’ business competitors, thereby giving those rivals unfair business advantages. Plaintiffs argued that the ordinance should be declared void as contrary to Ohio law under Ohio’s Declaratory Judgment Act, Ohio Revised Code § 2721.03, alleged violations of Ohio’s Public Records Act, Statutory Records Retention Schedule, and Open Meetings Act, and asserted federal claims under 42 U.S.C. § 1983 based on the Equal Protection and Due Process Clauses and the Civil Rights Act of 1964, 42 U.S.C. § 2000d.
The district court entered judgment on the pleadings in defendants’ favor under Rule 12(c) of the Federal Rules of Civil Procedure on plaintiffs’ request for declaratory relief, ruling that their alleged injury
Because we hold that plaintiffs’ state law allegations relating to their request for declaratory relief fail to satisfy Ohio’s standing requirements, we affirm the district court’s dismissal of those claims. In addition, because the evidence does not demonstrate that Grove City discriminated against plaintiffs or denied them due process, we affirm the district court’s grant of summary judgment in Grove City’s favor on plaintiffs’ federal claims.
I.
In 1986, Grove City passed an ordinance which created a community reinvestment area (“CRA”). Within the CRA, Grove City sought to create “incentive measures to assist in encouraging ... economic and community development ... by remodeling or new construction[.]” One “incentive” the ordinance created was a fifteen-year tax exemption for the construction of commercial and industrial buildings within the CRA.
In 2003, the city expanded the CRA by adding additional acreage to the tax abatement area. Plaintiff hotels are located within the expanded CRA. Although the hotels concede that they can take advantage of the tax abatements, they complain that in order to do so, they must remodel or construct new improvements on their already existing properties. They contend that this puts them at a “grossly unfair” competitive disadvantage to new businesses, including defendant Drury Inns, Inc., and defendant Bob Evans Farms, Inc., which took advantage of the fifteen-year tax abatements to construct a new hotel and restaurant within the expanded CRA.
Although plaintiffs’ primary complaint concerns the legality of the tax abatement ordinance under Ohio law, their underlying theory is that the ordinance was part of a pattern by Grove City of discriminating against the hotels because of the ethnic background of their owners, who are immigrants from India. As part of this alleged scheme, plaintiffs also contend that the city discriminated against them by denying their requests for tax abatements and economic incentives; rejecting their requests for variances related to the designs and features of their hotels, while granting Drury Inns’s requests (allowing that hotel and its sign to be built higher and larger than other hotels in the area); commissioning a study assessing the feasibility of new hotel construction within the city and sharing its results with Drury Inns but not with plaintiffs; and holding secret meetings with Drury Inns. Further, they allege that Grove City withheld information or misled them about the 2003 ordinance and the construction of Drury Inns.
On September 27, 2006, plaintiffs filed suit against defendants, as well as other defendants,
On May 16, 2007,
On May 9, 2008,
Plaintiffs timely appeal.
First, plaintiffs contend that the district court erred in ruling that they lacked standing to request a declaratory judgment voiding the ordinance under Ohio Revised Code § 2721,03.
We review the district court’s dismissal of plaintiffs’ claims under Rule 12(c) of the Federal Rules of Civil Procedure using the same de novo standard of review applicable to our review of an order of dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Tucker v. Middleburg-Legacy Place,
In addition, we give deference to a district court’s denial of declaratory relief, reviewing that decision for abuse of discretion. See Scottsdale Ins. Co. v. Flowers,
A.
The district court based its denial of declaratory relief upon its determination that plaintiffs failed to satisfy Ohio’s standing requirements. Before addressing the parties’ competing positions about whether an allegation of increased competition is sufficient to confer upon plaintiffs state law standing to obtain a declaratory judgment under Ohio Revised Code § 2721.03, we first assess if the district court erred in not considering whether plaintiffs satisfied the constitutional standing requirements of Article III of the United States Constitution.
Three principles apply. First, while it is true that Article III standing “is the threshold question in every federal case,” see Warth v. Seldin,
Second, because plaintiffs’ right to relief on these state law claims arises solely from an Ohio statute, the crucial inquiry is whether Ohio law, not federal law, authorizes the remedy sought. The law is well-settled that a federal court exercising supplemental or diversity subject matter jurisdiction over state law claims must apply state substantive law to those claims. 28 U.S.C. § 1652; Gasperini v. Ctr. for Humanities, Inc.,
The Second Circuit has explained that:
[i]t is the source of the right, not the basis of federal jurisdiction, which determines the controlling law. This includes any restrictions set by the state on whether a plaintiff may bring a court action regarding the claim. If a state would not recognize a plaintiffs right to bring a state claim in state court, a federal court exercising pendent jurisdiction, standing in the shoes of the state court, must follow the state’s jurisdictional determination and not allow that claim to be appended to a federal law claim in federal court.
Promisel v. First Am. Artificial Flowers, Inc.,
Third, Article III standing jurisprudence may not be completely irrelevant when assessing a plaintiffs standing to bring state law claims in federal court. Where a state supreme court has not addressed the relevant state law issue, we must “discern, from all available sources” (such as federal cases interpreting Article Ill’s standing requirements) how the state supreme court would rule. McClain v. NorthWest Cmty. Corr. Ctr. Judicial Corr. Bd.,
B.
“When deciding an issue of state law, we apply the law of the state’s highest court.” Ellis v. Cleveland Mun. Sch. Dist.,
Ohio’s courts have held that Ohio Revised Code § 2721.03 “represents] [a] legislative grant[] of jurisdiction to Ohio courts under certain circumstances to hear and decide declaratory judgment actions. That declaratory relief is an available remedy is a separate question from one’s standing to file such an action.” Holcomb v. Schlichter,
“The question of standing is whether a litigant is entitled to have a court determine the merits of the issues presented.” Cuyahoga County Bd. of Comm’rs v. State,
In Ohio, “[a]s a general rule competitors lack standing to challenge competition created or enhanced by government action unless they can claim the benefit of an implied or expressed statutory aid to standing.” Blanchester Care Center, Inc. v. Ackerman, No. 81AP-113,
The Atwood and Wickham courts were persuaded by the United States Supreme Court’s decision in Hardin v. Kentucky Util. Co.,
This Court has, it is true, repeatedly held that the economic injury which results from lawful competition cannot, in and of itself, confer standing on the injured business to question the legality of any aspect of its competitor’s operations. Railroad Co. v. Ellerman,105 U.S. 166 ,26 L.Ed. 1015 (1882); Alabama Poiver Co. v. Ickes,302 U.S. 464 ,58 S.Ct. 300 ,82 L.Ed. 374 (1938); Tennessee Power Co. v. TVA,306 U.S. 118 ,59 S.Ct. 366 ,83 L.Ed. 543 (1939); Perkins v. Lukens Steel Co.,310 U.S. 113 ,60 S.Ct. 869 ,84 L.Ed. 1108 (1940). But competitive injury provided no basis for standing in the above cases simply because the statutory and constitutional requirements that the plaintiff sought to enforce were in no way concerned with protecting against competitive injury. In contrast, it has been the rule, at least since the Chicago Junction Case,264 U.S. 258 ,44 S.Ct. 317 ,68 L.Ed. 667 (1924), that when the particular statutory provision invoked does reflect a legislative purpose to protect a competitive interest, the injured competitor has standing to require compliance with that provision. See Alton R. Co. v. United States,315 U.S. 15 , 19,62 S.Ct. 432 ,86 L.Ed. 586 (1942); Chicago v. Atchison, T. & S.F.R. Co.,357 U.S. 77 , 83,78 S.Ct. 1063 ,2 L.Ed.2d 1174 (1958).
Here, as in American Aggregates and Wickham, Grove City’s tax abatement ordinance did not protect against competitive injury. To the contrary, the ordinance created “incentive measures to assist in encouraging ... economic and community development ... by remodeling or new construction.” Thus, the ordinance was enacted for the legitimate purpose of stimulating Grove City’s economy by encouraging (not reducing) competition.
We also note that the harm that plaintiffs allege is purely speculative. Plaintiffs do not assert that they have suffered or will incur economic injury simply because one hotel — Drury Inns — has entered the hotel market in Grove City where the eight plaintiff hotels have done business for a number of years. See Mixon v. Ohio,
Finally, the district court ruled correctly that plaintiffs lacked standing in their capacities as taxpayers. Plaintiffs concede that they “are not challenging the expenditure of public funds[,]” and they identify no public “right,” apart from their purely personal grievance regarding their own speculative economic injury from increased competition, that they are seeking to enforce. See State ex rel. Levin v. Schremp,
For these reasons, we affirm the district court’s grant of judgment on the pleadings in Grove City’s favor on Counts One through Five.
III.
Next, plaintiffs contend that the district court erred in granting summary judgment in Grove City’s favor on their federal Equal Protection, procedural Due Process, Title VI, and Public Policy claims (Counts Six through Twelve). They assert that “[gjenuine issues of material fact exist as to whether Grove City discriminated against [them], denied them due process and otherwise violated their rights.”
We review a district court’s grant of summary judgment de novo. Johnson v. Univ. of Cincinnati,
A.
Plaintiffs’ constitutional claims are brought under 42 U.S.C. § 1983.
1.
To establish a violation of the Equal Protection Clause, plaintiffs must show that Grove City discriminated against them because they are Indian-owned. See Henry v. Metro. Sewer Dist.,
Plaintiffs contend that they “cannot take advantage of the tax abatement because it would require them to demolish their existing hotels and spend millions of dollars building new hotels, which would offset by far any gained tax advantage” and that “[t]his is not economically feasible given the decreasing revenues and occupancy rates in Grove City’s soft hotel market.” They also emphasize that:
the district court overlooked the mass of evidence demonstrating disparate treatment: [plaintiffs] were refused an abatement and variances, were not informed about the Drury Inn development, were not informed about the pending expansion of the CRA to include [plaintiffs’] properties and Drury Inn’s property, never got the benefit of an Impact Study before developing their hotels, were not informed that they could obtain a tax abatement if they constructed meeting rooms, have never received the attention and assistance from Grove City and its*12 Council that was given to Drury Inn, and have developed in a PUD [planned unit development] [sic] and not received the signage and height concessions given to Drury Inn.
The evidence supporting plaintiffs’ claims of discrimination is lacking. The district court found correctly that the expanded CRA included plaintiffs, thus making them “eligible for the same [tax advantages] as Drury Inn and Bob Evans, if they, like Drury Inn and Bob Evans, satisfy the qualifying remodeling or improvement activities that are prerequisites to a tax abatement.” The court opined that there may even be a “misunderstanding” between the parties because Ballubhai Patel, plaintiffs’ representative, and Nanubhai Patel, owner of plaintiff Comfort Inn, testified in their depositions that they were unaware that their hotels were within the CRA and that they could also potentially qualify for the tax abatement. The court noted accurately that plaintiffs did not take the steps necessary to receive the tax abatements, did not apply for them, and Grove City did not refuse them.
The district court also relied reasonably upon Zajicek v. Aaby, No. 94 C 50066,
[T]he essence of plaintiffs equal protection claim is that he did not receive certain tax benefits under the ordinances. The tax benefits at issue are only made available to those owners of property upon which new improvements have been constructed or upon which existing ones have been renovated or rehabilitated, or those who have purchased building materials for remodeling, rehabilitation or new construction. Thus, plaintiff must, to allege that he is similarly situated to those who have received the tax benefits, allege that he has undertaken improvements or purchased building materials either of which are similar to those improvements made or materials purchased by persons receiving the benefits. This he has not done.
* * *
It is well within the bounds of equal protection law to provide tax benefits to certain property owners in an effort to improve the conditions of the property i.e., those who either engage in construction, rehabilitation or renovation or who use building materials in doing so, while not allowing the same benefits to other similarly situated property or property owners who do not undertake such construction, rehabilitation or renovation.
Id. at *4 n. 2.
The district court also correctly rejected plaintiffs’ allegations of past discrimination. Plaintiffs base them contention that Grove City discriminated against them by
Plaintiffs’ complaint that Grove City discriminated against them by denying them variances for “signage and height” is equally without merit. Ballubhai Patel acknowledged in his deposition that Drury Inns has a higher sign than his hotels only because it is a higher building, six other motels in Grove City — all of them Chinese-and Indian-owned — have “highrise signs,” all six of the Asian-owned motels requested, and were granted, variances for their signs by Grove City, he knew of no other motels owned by plaintiffs that applied for and were denied variances for high-rise signs, he never applied for a variance to construct a high-rise building, he was unaware of any other plaintiff who applied to build a high-rise building, he had no knowledge of any design features that were denied to plaintiffs but granted to Drury Inns, he knew of no development restrictions that Grove City enforced against him or the other plaintiffs that it did not apply to Drury Inns, and he was unaware of any zoning codes that Grove City applied to him or the other plaintiffs that it did not enforce against Drury Inns. When asked whether “Grove City ever [took] any action against any of the hotels that are plaintiffs in this case because those hotels were owned by Asian-Americans” and whether “Grove City ever refuse[d] to do anything for any of the hotels that are plaintiffs in this case because they are owned by Asian-Americans[,]” his response to both questions was: “Not that I know.”
Echoing Ballubhai Patel’s testimony, Nanubhai Patel stated in his deposition that his hotel, the Comfort Inn, has a highrise sign and that the Hampton Inn and Red Roof Inn, both of which are owned by individuals of Indian descent, have highrise signs. Nanubhai Patel also agreed that he had no information that Grove City treated him differently than the owners of the Drury Inns, discriminated against him because he is of Indian descent, or denied him the opportunity to file applications, requests for variances, or “anything with the city.”
In essence, plaintiffs have wholly failed to support their claim of unlawful discrimination. Based on their concessions and the overwhelming evidence from which no reasonable jury could conclude that Grove City illegally discriminated against them, we affirm the district court’s grant of summary judgment in Grove City’s favor on plaintiffs’ Equal Protection claim.
2.
Under the Due Process Clause of the Fourteenth Amendment, states are prohibited from “depriv[ing] ... any person of life, liberty, or property, without due process of law.” U.S. Const, amend. XIV. In Club Italia, we explained:
The right to procedural due process “requires that when a State seeks to terminate [a protected] interest ... it must afford ‘notice and opportunity for hearing appropriate to the nature of the case’ before the termination becomes effective.” Bd. of Regents v. Roth,408 U.S. 564 , 570,92 S.Ct. 2701 ,33 L.Ed.2d 548 (1972) (quoting Bell v. Burson,402 U.S. 535 , 542,91 S.Ct. 1586 ,29 L.Ed.2d 90 (1971)). Importantly, procedural due process rights are only violated when a protected liberty or property interest is*14 denied without adequate hearing. Thus, in order to succeed on this claim, Plaintiff must show (1) that it was deprived of a protected liberty or property interest, and (2) that such deprivation occurred without the requisite due process of law.
Plaintiffs’ appeal of the district court’s grant of summary judgment on their due process claim is both forfeited and merit-less. After setting forth the applicable law on their due process claim, plaintiffs devote one sentence in their appellate brief to “arguing” why the district court’s judgment should be reversed: “As discussed above, Grove City did not comply with its own ordinance and failed to notify [plaintiffs] that Drury Inn’s plans were modified from 150 to 180 rooms, thereby depriving [plaintiffs] of their right to contest same at the Council meeting.” Contrary to this assertion, however, plaintiffs did not “discuss[ ]” in their brief any matter relating to their due process appeal. Our law is well-settled that “[tissues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived.” United States v. Sandridge,
We alternatively hold that plaintiffs’ due process claim is meritless. Ballubhai Patel testified in his deposition that he was not aware of any law, statute, or ordinance either in Grove City or in Ohio that required Grove City to notify him of variances, building and design features, zoning modifications, or tax benefits requested by Drury Inns. In fact, he conceded that Grove City was not required to provide him special notice of variances, building and design features, zoning modifications, or tax benefits because he and the other owners of the plaintiff hotels were not neighboring properties of Drury Inn.
Plaintiffs’ contentions that Grove City did not inform them “about the pending expansion of the CRA to include [their] properties and Drury Inn’s property” or notify them “that they could obtain a tax abatement if they constructed meeting rooms” are puzzling. The 2003 ordinance expanding the CRA is a city ordinance. Accordingly, plaintiffs at least were placed on constructive notice of it. Tami Kelly, Grove City’s Clerk of Council, stated in her affidavit that the ordinance was both introduced and then approved at a public city council meeting, after she gave the required public notice that the ordinance would be considered at the meeting. She further stated that the public was notified that the ordinance had passed. Regarding their argument that Grove City would have granted them a special tax abatement if they “constructed meeting rooms,” plaintiffs fail to develop that argument or substantiate it.
Significantly, Ballubhai Patel stated in his deposition that, to his knowledge, neither he nor any of the other owners of the plaintiff motels had ever been denied the opportunity to be heard at a hearing, to be heard at a proceeding, or receive information about Drury Inns because they are Asian-Americans. He further admitted that he did not attend any city council or planning commission public meetings concerning Drury Inns and that he was not even aware that Grove City provided public notices of its meetings. Similarly, Nanubhai Patel testified in his deposition that he was never denied the opportunity to attend any hearings or meetings with the city.
Based on this testimony, the district court correctly ruled that “even under Plaintiffs’ own understanding of Grove City’s legal obligations, the city was not
3.
Title VI of the Civil Rights Act of 1964 provides:
No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.
42 U.S.C. § 2000d.
Plaintiffs’ sole contention is that because Grove City violated its Equal Protection rights, it derivatively violated Title VI. Although Grove City argued below and reasserts on appeal that Title VI is inapplicable because it did not receive any federal financial assistance, the district court did not address that contention because it held that its grant of summary judgment on plaintiffs’ Equal Protection claim also entitled Grove City to summary judgment on plaintiffs’ Title VI claim.
We agree, and for the same reasons articulated in our analysis affirming the district court’s grant of summary judgment on the merits of plaintiffs’ Equal Protection claim, we also affirm the district court’s grant of summary judgment on plaintiffs’ Title VI claim.
B.
Finally, plaintiffs contend that the district court erred in granting summary judgment on its “public policy” claim in Count Eight. Plaintiffs devote one sentence to their appeal of this issue: “[T]he district court should not have granted summary judgment against [plaintiffs] on their federal claims, and therefore, the district court should not have granted summary judgment against [them] on their public policy claim.”
The issue is forfeited. Sandridge,
IV.
For these reasons, we affirm the judgment of the district court.
Notes
. The other defendants included Hawkstone Associates, Inc., Lucas State Street String-town Ltd., Ingram Family Limited Partnership, Roosters Real Estate, LLC, and John Does.
. Ohio Revised Code § 2721.03 provides, in pertinent part:
Subject to division (B) of section 2721.02 of the Revised Code, ... any person whose rights, status, or other legal relations are affected by a ... municipal ordinance ... may have determined any question of construction or validity arising under the ... ordinance ... and obtain a declaration of rights, status, or other legal relations under it.
. Ohio Rev Code Ann. § 149.43.
. Ohio Rev.Code Ann. §§ 121.211 and 149.01 et seq.
. Ohio Rev.Code Ann § 121.22.
. The relevant counts (Counts One through Five) alleged that the 2003 ordinance was void because "a community reinvestment area cannot contain two separate and non-contiguous areas and, therefore, the purported expansion to the area east of 1-71 was null and void" (Count One); the ordinance failed to comply with the post-1994 CRA statutes and requirements, "including but not limited to, the requirement to enter into a community reinvestment area agreement prior to the commencement of construction under R.C. § []3735.671” (Count Two); it was revoked (Count Three); it violated Ohio Revised Code § 3735.671 and other post-1994 law (Count Four); and Grove City failed to make the required filings and disclosures to the Ohio Department of Development, in violation of Ohio law (Count Five).
. By comparison, Article III standing requires that a party demonstrate that it:
(1) ... has suffered an “injury in fact” that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.
Fieger v. Mich. Supreme Court,
. The direct constitutional claims asserted in Counts Six, Seven, and Eight are duplicative of, and are therefore subsumed by, those brought pursuant to § 1983 in Counts Ten, Eleven, and Twelve. Thomas v. Shipka,
Concurrence Opinion
concurring in part and concurring in the judgment.
I believe we must determine whether we have Article III jurisdiction with respect to the Hotels’ claims under the Ohio Declaratory Judgment Act before proceeding to decide any question of state law with respect to them. “ ‘Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause.’ ” Steel v. Citizens for a Better Env’t,
The majority proceeds instead with a rather extended analysis of the question whether Ohio law permits the Hotels to
The majority cites Ruhrgas for the proposition that there is no mandatory “sequencing of jurisdictional issues.” Id. at 584,
Second, both of the jurisdictional grounds at issue in Ruhrgas (namely, subject-matter jurisdiction and personal jurisdiction) depended on federal rather than state law. Moreover, the personal-jurisdiction ground that the Court said could be reached first was, unlike the subject-matter one, constitutional in nature. See
To say that a federal court lacks power under Article III is to say that it lacks any power at all. I believe we lack power under Article III with respect to the Hotels’ state-law claims for declaratory relief, and thus I respectfully concur only in the judgment as to those claims. I fully concur, however, in the majority’s analysis of the Hotels’ federal-law claims.