Emanuel's, L.L.C. v. Restore Marietta, Inc.Emanuel's, L.L.C. v. Restore Marietta, Inc.
APPEARANCES:
Anne C. Labes, Esq., Parkersburg, West Virginia, for appellant.
Jared A. Wagner and Jane M. Lynch, Green & Green, Lawyers, Dayton, Ohio, and Paul Betram, III, City of Marietta Law Director, Marietta, Ohio, for appellee City of Marietta.
Patrick Kasson and Kent Hushion, Columbus, Ohio, for appellees Restore Marietta, Inc. and Christie Lynn Thomas.1
Hess, J.
{1} Emanuel‘s LLC appeals from a judgment of the Washington County Common Pleas Court granting judgment on the pleadings in favor of the city of Marietta (the “City“), Restore Marietta, Inc., d/b/a Marietta Main Street (“MMS“), and Christie Lynn Thomas, defendants below. Emanuel‘s presents three assignments of error asserting that the trial court erred by extending statutory immunity to the defendants and by dismissing tortious interference with business relations and monopoly claims contrary to
I. FACTS AND PROCEDURAL HISTORY
{2} In June 2021, Emanuel‘s filed a complaint against the City, MMS, and Thomas which alleged the following. Emanuel‘s owns real estate in Marietta, Ohio, where it operates an Israeli restaurant, TLV Restaurant. In March 2021, the mayor of Marietta submitted to the Marietta City Council the final version of an application to establish a Designated Outdoor Refreshment Area, or “DORA,” in an area of downtown Marietta where TLV is located. A DORA is an area “where the State‘s open container laws are lifted during designated times, allowing customers to purchase alcoholic beverages from permitted establishments and carry the containers within the confined DORA area.” Emanuel‘s holds a D5L liquor license from the Ohio Division of Liquor Control for TLV, and the application identified TLV as a qualified permit holder. The application mentioned DORA cups, included a “mock-up design of the cups,” and stated that the cups would be ” ‘made available’ to qualified permit holders.” On April 29, 2021, the Marietta City Council passed a resolution to establish the DORA. The City announced that its DORA program would begin on June 4, 2021.
{3} On or about May 18, 2021, Thomas, the Executive Director of MMS, a private not-for-profit corporation, “initiated a private e-mail chain to certain designated permit holders within the DORA zone, informing them of additional regulations [MMS] was requiring permit holders to comply with, including the purchase of designated cups” from MMS. Emanuel‘s was not included in the chain. The information in the chain, “including the link to purchase the cups, was not made publicly available at any time,” and “[t]he
{4} On May 24, 2021, Emanuel‘s “received its DORA license from the Ohio Division of Liquor [C]ontrol.” On June 3, 2021, Emanuel‘s contacted the City “to obtain the DORA cups mentioned in” the application and was directed to contact Thomas of MMS. Thomas informed representatives of Emanuel‘s that “they may not participate in DORA оn June 4, 2021, as they had not ordered the cups sold by [MMS], which take approximately 2 weeks to produce.” Thomas also came to TLV and “expressed to restaurant employees and the manager, in front of customers,” that Ari Gold, the CEO of Emanuel‘s, had accused her “of vandalizing his property with spray-painted swastikas” even though he “never accused anyone, let alone Ms. Thomas, of this hate crime,” which had occurred in 2017. Gold and Emanuel‘s representative went to a city council meeting and expressed concerns about MMS‘s “apparent enforcement of the DORA legislation without any authority.” The mayor said a city official or the city law director would call them the next day, but this did not occur.
{5} The complaint further alleged that the DORA application and resolution did not “delegate any authority to operate or enforce DORA to [MMS], or any other private
{6} The complaint set forth three counts. Counts One and Two incorporated “by reference all other material allegations” in the complaint and made additional allegations. Count One was titled “tortious interference with business relations” and alleged that MMS did not have “authority to impose additional restrictions on businesses willing to participate in DORA,” “to enforce DORA legislation,” or “to exclude businesses from the DORA program” and that MMS “wrongfully prevented [Emanuel‘s] from participating in the DORA program,” causing Emanuel‘s to suffer damages. Count Two was titled “violation of
{7} The complaint requested “preliminary injunctive relief preventing Marietta Main Streеt from continuing to enforce DORA legislation, impose additional restrictions not included in the legislation, and engage in a monopoly as detailed herein.” The prayer for relief demanded “judgment against Defendants which will fairly and reasonably compensate Plaintiff for damages, plus interest, costs, and other such relief as this Court deems appropriate, and injunctive relief as stated herein.”
{8} In July 2021, Emanuel‘s filed a “renewed motion for preliminary injunction” asking that MMS and the City be enjoined from certain conduct.2 The defendants opposed this motion. The defendants also filed answers to the complaint and motions for judgment on the pleadings.
{9} The trial court granted the motions for judgment on the pleadings, denied the “Application for Preliminary Injunction” as moot, and dismissed the case. The court observed that it was “not entirely clear” whether Emanuel‘s asserted “all three causes of
II. ASSIGNMENTS OF ERROR
{10} Emanuel‘s presents three assignments of error:
Assignment of [E]rror 1: The trial court erred in granting Defendants’ Motions for Judgment on the Pleadings, extending statutory immunity to nongovernmental Defendants ReSTORE Marietta, Inc. and Cristie Thomas, and extending immunity to the City of Marietta.
Assignment of Error 2: The trial court erred by dismissing the claim for tortious interference with business relations contrary to facts asserted in [the] complaint.
III. STANDARD OF REVIEW
{11} “Appellate review of a judgment on the pleadings involves only questions of law and is therefore de novo.” New Riegel Local School Dist. Bd. of Edn. v. Buehrer Group Architecture & Eng., Inc., 157 Ohio St.3d 164, 2019-Ohio-2851, 133 N.E.3d 482, ¶ 8. Civ.R. 12(C) states: “After the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings.” ” ‘Dismissal is appropriate under Civ.R. 12(C) when (1) the court construes as true, and in favor of the nonmoving party, the material allegations in the complaint and all reasonable inferences to be drawn from those allegations and (2) it appears beyond doubt that the plaintiff can prove no set of facts that would entitle him or her to relief.’ ” Maternal Grandmother v. Hamilton Cty. Dept. of Job & Family Servs., 167 Ohio St.3d 390, 2021-Ohio-4096, 193 N.E.3d 536, ¶ 13, quoting Reister v. Gardner, 164 Ohio St.3d 546, 2020-Ohio-5484, 174 N.E.3d 713, ¶ 17.
IV. R.C. CHAPTER 2744
{12} In its first assignment of error, Emanuel‘s contends the trial court erred by extending statutory immunity to the defendants.
A. The City
{13} Emanuel‘s maintains that the trial court erred when it “categorically” dismissed the City “from the action based on its argument of governmental immunity protections as codified in
{14} ”
{15} Emanuel‘s does not dispute that the City is a political subdivision or that the claims against the City for damages for tortious interference with business relations and violation of the Valentine Act fall within the general grant of immunity under
{16} Even if the conduct alleged in the complaint involved proprietary functions, which the City disputes, the
{17} In addition, the trial court did not improperly extend statutory immunity to the City for a claim for equitable relief. Although
{18} We observe that in Kline v. Davis, 4th Dist. Lawrence Nos. 00CA32 & 01CA13, 2001 WL 1590658 (Dec. 11, 2001), the plaintiff filed a complaint “seeking money damages, along with a request for a preliminary injunction and temporary restraining order.” Kline at *1. The plaintiff alleged violations of the Ohio Sunshine Law, the Public Records Act, and the Open Meetings Act. Id. The trial court granted the defendants’ motion for summary judgment “based on sovereign immunity.” Id. We held that because
{19} For the foregoing reasons, we overrule the portion of the first assignment which asserts the trial court erred by extending statutory immunity to the City.
B. MMS and Thomas
{20} Emanuel‘s also maintains that the trial court erred by extending immunity to MMS and Thomas under
{21} In its second assignment of error, Emanuel‘s contends that the trial court erred “by dismissing the claim for tortious interference with business relations contrary to facts asserted in [the] complaint.” Although the assignment of error is broadly worded, the arguments under it challenge only the trial court‘s reasons for dismissing the tortious interference claim against MMS and Thomas. Emanuel‘s asserts that the complaint alleged sufficient facts to survive a Civ.R. 12(C) motion. Emanuel‘s maintains that “[f]rom the facts as pled, reasonable minds could deduce intent and impropriety on behalf of Defendants.” Emanuel‘s claims that it “alleges that Defendants wrongfully attempted to prohibit it from participating in a city program that it was otherwise authorized to participate in by the State Departmеnt of Liquor Control.” MMS and Thomas did not include Emanuel‘s in private emails about the DORA program, and based on the facts alleged in the complaint, Thomas “appears to have personal animosity toward Plaintiff‘s affiliates, potentially accounting for this omission.” Emanuel‘s asserts that it “alleges damages in the form of lost sales” due to the attempts of MMS and Thomas to “exclude” Emanuel‘s “from the city program” and their omission of Emanuel‘s from published lists of “approved” locations to buy DORA drinks.
{22} ” ‘The elements of tortious interference with a business relationship are: (1) a business relationship; (2) the tortfeasor‘s knowledge thereof; (3) an intentional interference causing a breach or termination of the relationship; and (4) damages resulting therefrom.’ ” DeepRock Disposal Solutions, 2021-Ohio-1436, at ¶ 107, quoting Martin, 2015-Ohio-3168, 41 N.E.3d 123, at ¶ 63. “Tortious interference with a business relationship is similar to tortious interference with
{23} The trial court gave five grounds for granting MMS and Thomas judgment on the pleadings with respect to the tortious interference with business relations claim. One ground was that the complaint failed to allege any prospective business relations with which they interfered. Emanuel‘s suggestion that it is sufficient that one can infer from its cоmplaint that MMS and Thomas interfered with its business relationships with members of the public by preventing it from participating in the DORA program is not well-taken. A vague assertion that a party interfered with certain unspecified business relationships is insufficient to state a claim for tortious interference with a business relationship. Wilkey v. Hull, 366 Fed.Appx. 634, 638 (6th Cir. 2010). See generally One Energy Ents., LLC v. Ohio Dept. of Transp., 10th Dist. Franklin No. 17AP-829, 2019-Ohio-359, ¶¶ 75-76 (“vague reference to hypothetical future contracts and business relationships” insufficient to state claim for tortious interference with prospective business relationships); Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So. 2d 812, 815 (Fla. 1994) (“no cause of action exists for tortious interference with a business‘s relationship to the community at large“); McCreight v. AuburnBank, 2020 WL 1061675, *4 (M.D. Ala. 2020), quoting Glennon v. Rosenblum, 325 F. Supp. 3d 1255, 1267 (N.D. Ala. 2018) (plaintiff alleging tortious interference with a business relationship must “allege a specific relationship” the defendant interfered with because “[n]obody has a ‘legally protectable relationship with every potential participant in their local market’ “).
VI. VALENTINE ACT
{25} In its third assignment of error, Emanuel‘s contends that the trial court erred “by dismissing the monopoly claim contrary to facts asserted in [the] complaint.” Emanuel‘s maintains that “[t]he elements of a monopoly as defined by the Valentine Act are sufficiently pled in the complaint to survive a Rule 12 motion.” Emanuel‘s asserts that MMS and Thomas “argue governmental immunity from” the Valentine Act claim “based on a claimed contractual relationship with the City of which there is no evidence. However, by definition in the Act, a ‘person’ includes corporations, partnerships, and associations.” Emanuel‘s also asserts that thе United States Supreme Court “has established that a municipal corporation can also be a ‘person’ for the purpose of statutory analysis” and that the Supreme Court of Ohio “has stated that when a political subdivision acts in a proprietary nature, there is less justification for affording it immunity * * *.”
{26} In addition, Emanuel‘s contends that even though “the DORA expanded trade,” Emanuel‘s “does not argue the DORA itself violates the Valentine Act, rather, Defendants’ actions in attempting to force business owners to purchase materials from
A. Statutory Provisions
{27} “Ohio‘s antitrust statutes, known as the Valentine Act, are contained in
(1) “Trust” is a combination of capital, skill, or acts by two or more persons for any of the following purposes:
(a) To create or carry out restrictions in trade or commerce;
(b) To limit or reduce the production, or increase or reduce the price of merchandise or a commodity;
(c) To prevent competition in manufacturing, making, transportation, sale, or purchase of merchandise, produce, or a commodity;
(d) To fix at a standard or figure, whereby its price to the public or consumer is in any manner controlled or established, an article or commodity of
merchandise, produce, or commerce intended for sale, barter, use, or consumption in this state; (e) To make, enter into, execute, or carry out contracts, obligations, or agreements of any kind by which they bind or have bound themselves not to sell, dispose of, or transport an article or commodity, or an article of trade, use, merchandise, commerce, or consumption below a common standard figure or fixed value, or by which they agree in any manner to keep the price of such article, commodity, or transportation at a fixed or graduated figure, or by which they shall in any manner establish or settle the price of an article, commodity, or transportation between them or themselves and others, so as directly or indirectly to preclude a free and unrestricted competition among themselves, purchasers, or consumers in the sale or transportation of such article or commodity, or by which they agree to pool, combine, or directly or indirectly unite any interests which they have connected with the sale or transportation of such article or commodity, that its price might in any manner be affected;
(f) To refuse to buy from, sell to, or trade with any person because such person appears on a blacklist issued by, or is being boycotted by, any foreign corporate or governmental entity.
“A trust as defined in this division is unlawful and void.”
B. The City
{28} The trial court found that the City was immune from the Valentine Act claim under both
{29} Emanuel‘s also suggests that the City qualifies as a “person” who can violate the Valentine Act, asserting that the United States Supreme Court “has established that a municipal corporation can also be a ‘person’ for purpose of statutory analysis * * *.” Though unclear, Emanuel‘s may be implying that the City is not immune under
{30} Emanuel‘s has not shown that the trial court erred when it found the City immune under
C. MMS and Thomas
{31} The trial court gave three grounds for granting MMS and Thomas judgment on the pleadings with respect to the Valentine Act claim. First, the court found the alleged
{32} Second, the court found that the complaint failed to allege an antitrust injury, stating:
To establish standing to assert a claim under the Valentine Act, “a plaintiff must prove the existence of antitrust injury, which is to say injury of the type the antitrust laws intended to prevent and that flows from that which makes defendants’ acts unlawful.” See Acme Wrecking Co. v. O‘Rourke Constr. Co., 1995 Ohio App. LEXIS 745, at *6 (1st Dist. March 2, 1995) quoting Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334 (1990). This requiremеnt “ensures that a plaintiff can recover only if the loss stems from a competition-reducing aspect or effect of the defendant‘s behavior.” See id. (emphasis in original). Thus, the Complaint “must allege an injury to the market, not just a personal injury.” Caudill v. Lancaster Bingo Co., 2005 U.S. Dist. LEXIS 24621, at *18 (S.D. Ohio Oct. 24, 2005).
Plaintiff fails to allege that the requirement to purchase official cups for $0.90 reduced competition among establishments in the DORA zone or caused an injury to the market. By suspending Ohio‘s Open Container laws for certain days and times within the DORA zone, the City granted qualified businesses permission to conduct otherwise unlawful activity—selling alcohol to be consumed outdoors—which created a market for such activity.
Qualifying businesses are all subject to the same requirements to participate in DORA, and thus, are all on еqual footing. Thus, Plaintiff failed to allege an antitrust injury: under no set of facts can Plaintiff establish that the City‘s DORA—implemented to expand business activity for qualifying businesses—reduced competition among such businesses. See Caudill, 2005 U.S. Dist. LEXIS 24621, at *18-19 (granting motion for judgment on the pleadings on Plaintiff‘s antitrust claim because the complaint “is void of any allegations as to how the market has changed or been damaged as a result of their inability to compete,” and “fails to identify any competitors . . . describe the market . . . [or] discuss any market conditions.“)
(Emphasis and alteration sic.) And third, the court found that even if Emanuel‘s “could make a showing of an antitrust claim,” MMS and Thomas were immune under the state action doctrine.
{33} Although Emanuel‘s generally challenges the grant of judgment on the pleadings to MMS and Thomas with respect to the Valentine Act claim, we are unable to discern any arguments under the third assignment of error which specifically challenge the trial court‘s determination that the complaint failed to allege an antitrust injury. Emanuel‘s arguments appear to focus on the trial court‘s alternative conclusions that the alleged antitrust violations were not an unreasonable restraint of trade and that MMS and Thomas have immunity. At no point does Emanuel‘s mention the topic of antitrust injury, address the legal authority the trial court cited on that topic, cite any other legal authority on that topic, or address the trial court‘s point that requiring all qualifying business to comply with the same requirements to participate in the newly created market for DORA drinks in downtown Marietta could not reduce competition where none existed before.
{34} As previously stated, “in any appeal, including this appeal, the appellant bears the burden to demonstrate error on the part of the trial court.” West, 4th Dist. Highland No. 14CA7, 2015-Ohio-2139, ¶ 4. Emanuel‘s has not demonstrated error in the trial court‘s finding that the complaint failed to allege an antitrust injury. Accordingly, we
VII. CONCLUSION
{35} Having overruled the assignments of error, we affirm the trial court‘s judgment.
JUDGMENT AFFIRMED.
It is ordered that the JUDGMENT IS AFFIRMED and that appellant shall pay the costs.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Washington County Common Pleas Court to carry this judgment into execution.
Any stay previously granted by this Court is hereby terminated as of the date of this entry.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
Smith, P.J. & Wilkin, J.: Concur in Judgment and Opinion.
For the Court
BY: Michael D. Hess, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes а final judgment entry and the time period for further appeal commences from the date of filing with the clerk.