T & M Machines, LLC et al., Plaintiffs-Appellants, v. [Dave Yost] Attorney General of Ohio et al., Defendants-Appellees.
No. 19AP-124 (C.P.C. No. 18CV-1135)
IN THE COURT OF APPEALS OF OHIO TENTH APPELLATE DISTRICT
February 18, 2020
2020-Ohio-551
(REGULAR CALENDAR)
Rendered on February 18, 2020
On brief: Donald J. Malarcik, for appellants.
On brief: Dave Yost, Attorney General, Matthew T. Green, and C. Patrick Denier, for appellee Attorney General of Ohio Dave Yost. Argued: Matthew T. Green.
On brief: Dave Yost, Attorney General, Charles E. Febus, and Joseph E. Schamansky, for appellees Ohio Department of Public Safety and Ohio Liquor Control Commission. Argued: Joseph E. Schamansky.
APPEAL from the Franklin County Court of Common Pleas
BEATTY BLUNT, J.
{¶ 1} Plaintiffs-appellants, T & M Machines, LLC (“T & M Machines“), T & M Merchandising, Inc. (“T & M Merchandising“), and Loyal Order of Moose, Middletown Lodge No. 501 (the “Moose Lodge“) (collectively “appellants“), appeal from a judgment of the Franklin County Court of Common Pleas granting the
I. Facts and Procedural History
{¶ 2} Appellant T & M Machines filed a complaint on February 6, 2018 against OAG and OLCC in the common pleas court. Count 1 seeks a declaratory judgment that certain Electronic Raffle Machines (“ERMs“) which are leased to various charitable organizations by T & M Machines are “raffles” permitted to be used by charitable organizations, pursuant to
{¶ 3} Subsequently, on April 4, 2018, an amended complaint was filed. The amended complaint added T & M Merchandising and the Moose Lodge as plaintiffs and added ODPS as a defendant, but otherwise seeks the same relief as that requested in the original complaint.
{¶ 4} According to the amended complaint, Moose Lodge is a 501(c)(3) non-profit fraternal organization holding a liquor license issued by the OLCC and bingo licenses issued by the OAG. The Moose Lodge uses ERMs for charitable fundraising purposes. T & M Machines leases ERMs to qualified veteran and fraternal organizations in Ohio, including the Moose Lodge. T & M Merchandising holds a license issued by the OAG to manufacture and distribute bingo supplies. T & M Merchandising also manages and services ERMs, and manages the revenue generated by ERMs.
{¶ 5} It is further alleged in the amended complaint that on March 23, 2018, ODPS issued a warning to the Moose Lodge regarding its use of ERMs and threatened criminal, civil, and/or administrative action against the Moose Lodge if it continued to use ERMs. It is alleged that ODPS charged another charitable organization with gambling offenses
{¶ 6} On April 18, 2018, OAG filed a motion to dismiss pursuant to
{¶ 7} On February 6, 2019, the trial court issued a decision and entry granting the motions to dismiss. The court concluded the claims of appellants were premature and, therefore, not justiciable. The court further concluded appellants’ claims were subject to dismissal for failure to exhaust administrative remedies. This timely appeal of the trial court‘s judgment followed.
II. Assignment of Error
{¶ 8} Appellants assign the following sole error for our review:
The Trial Court erred in granting Appellees’ Motion2 to Dismiss Appellants’ Amended Verified Complaint.
III. Law and Analysis
A. Standard of Review
{¶ 9} Appellants assert the trial court erred in granting the motions to dismiss, which were filed pursuant to
{¶ 10} A motion to dismiss under
{¶ 11} When reviewing a judgment rendered on either a
{¶ 12} The abuse of discretion standard applies to the review of a trial court‘s holding regarding justiciability; however, once a trial court determines that a matter is
{¶ 13} An abuse of discretion connotes more than an error of law or judgment; it implies that the court‘s action was unreasonable, arbitrary, or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983). “An appellate court may find an abuse of discretion when the trial court ‘applies the wrong legal standard, misapplies the correct legal standard, or relies on clearly erroneous findings of fact.’ ” Bellamy v. Montgomery, 10th Dist. No. 11AP-1059, 2012-Ohio-4304, ¶ 7, quoting Thomas v. Cleveland, 176 Ohio App.3d 401, 2008-Ohio-1720, ¶ 15 (8th Dist.).
{¶ 14} As noted previously, the trial court‘s decision granting the motions to dismiss was based on two grounds: one, appellants’ claims were not ripe for review and, therefore, not justiciable in nature; and two, appellants failed to exhaust their administrative remedies prior to filing their action for declaratory judgment. We address each of these grounds in turn as follows.
B. Declaratory Judgment — Justiciability and Ripeness
{¶ 15} A declaratory judgment action is a civil action and provides a remedy in addition to other legal and equitable remedies available. Victory Academy of Toledo v. Zelman, 10th Dist. No. 07AP-1067, 2008-Ohio-3561, ¶ 8, citing Aust v. Ohio State Dental Bd., 136 Ohio App.3d 677, 681 (10th Dist.2000).
{¶ 16}
{¶ 17} For a real controversy to exist so as to satisfy the first element, “there must be a ‘genuine dispute between parties having adverse legal interests of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.’ ” Town Ctrs., quoting Wagner v. Cleveland, 62 Ohio App.3d 8, 13 (8th Dist.1988). As for the second element, a controversy is justiciable when it presents “issues that are ripe for judicial resolution and which will have a direct and immediate impact on the parties.” Cristino v. Ohio Bur. of Workers’ Comp., 10th Dist. No. 13AP-772, 2014-Ohio-1383, ¶ 22, citing Stewart v. Stewart, 134 Ohio App.3d 556, 558 (4th Dist.1999). The United States Supreme Court developed the following two-prong test to determine whether a controversy is justiciable in character: “first to determine whether the issues tendered are appropriate for judicial resolution, and second to assess the hardship to the parties if judicial relief is denied at that stage.” Toilet Goods Assn., Inc. v. Gardner, 387 U.S. 158, 162 (1967). Ripeness is a question of timing, and the “ripeness doctrine seeks to prevent courts from engaging in premature adjudication.” Johnson v. Ferguson-Ramos, 10th Dist. No. 04AP-1180, 2005-Ohio-3280, ¶ 22, citing State ex rel. Elyria Foundry Co. v. Indus. Comm., 82 Ohio St.3d 88, 89 (1998). Such “premature claims are not ‘justiciable.’ ” Id., quoting Stewart at 558.
{¶ 18} We have previously stated that in determining whether an issue is ripe for review, a court must weigh the following: (1) the likelihood that the alleged future harm will occur, (2) the likelihood that delayed review will cause hardship to the parties, and (3) whether the factual record is sufficiently developed to provide fair resolution. State ex rel. Keller v. Columbus, 164 Ohio App.3d 648, 2005-Ohio-6500, ¶ 20 (10th Dist.), citing Ohio Forestry Assn., Inc. v. Sierra Club, 523 U.S. 726 (1998). “In general, a claim
{¶ 19} In this case, appellants assert the controversy between themselves and appellees is a real one, justiciable in nature and therefore ripe for review, because appellees have taken a definitive position on the use of ERMs in the case Ohio Veterans & Fraternal Charitable Coalition v. Attorney General of Ohio (the “OVFCC Litigation“), which is currently pending before the Supreme Court of Ohio.3 Appellants argue that because ERMs they use are identical to ERMs at issue in the OVFCC Litigation, the position taken by appellees in that case results in actual harm to appellants because they are ” ‘next in line’ to be targeted for their use of the same machines used by OVFCC.” (Appellant‘s Brief at 17-18.)
{¶ 20} Yet, as the trial court correctly observed, the final position of appellees regarding ERMs leased, managed, and/or owned by appellants in this case is currently unknown as there is no evidence in the record showing whether ERMs used by appellants are identical, or even substantially similar, to those at issue in the OVFCC Litigation. Furthermore, even if ERMs used by appellants are assumed to be identical to those at issue in the OVFCC Litigation, at best the harm alleged by appellants is premised on “future events that may not occur at all, or may not occur as anticipated.” Keller at ¶ 20. Such future events cannot form the basis for a claim that is ripe for judicial review. Id.
{¶ 21} Moreover, as the trial court also correctly observed, even if it is true that appellants might be “next in line” to be targeted by appellees in an action to revoke or suspend appellants’ bingo and/or liquor licenses, there would be no delayed review causing hardship to appellants. This is so because it is undisputed that any revocation or suspension of those licenses is subject to administrative review.
{¶ 22} Thus, the trial court correctly determined that appellants’ claims for declaratory judgment and injunctive relief were premature, and the trial court‘s finding that the present case did not present a real or justiciable controversy because it was not ripe for review was not an abuse of discretion.
C. Declaratory Judgment — Doctrine of Exhaustion
{¶ 23} In addition to the requirement that a claim be ripe prior to its being suitable for declaratory adjudication, a plaintiff is not entitled to declaratory relief where a direct appeal to the common pleas court of the declaration sought exists from the administrative process. Schomaeker v. First Natl. Bank of Ottawa, 66 Ohio St.2d 304, 310-12 (1981). This is known as the doctrine of exhaustion, which “requires a person to exhaust administrative remedies before seeking relief from the judicial system.” Brown v. Levin, 10th Dist. No. 11AP-349, 2012-Ohio-5768, ¶ 25, citing Derakhshan v. State Med. Bd. of Ohio, 10th Dist. No. 07AP-261, 2007-Ohio-5802, ¶ 23. The purpose of the doctrine ” ‘is to allow an administrative agency to apply its expertise in developing a factual record without premature judicial intervention in administrative processes.’ ” Id., quoting Nemazee v. Mt. Sinai Med. Ctr., 56 Ohio St.3d 109, 111 (1990); see also Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51 (1938) (“the long settled rule of judicial administration [is] that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted“). Thus, where an administrative proceeding is applicable to a particular action, a plaintiff “is not entitled to a declaratory judgment where failure to exhaust administrative remedies is asserted and maintained.” Schomaeker at paragraph three of the syllabus (holding that declaratory relief was unavailable where the plaintiff-landowner was “entitled under
{¶ 24} Notwithstanding the foregoing, a plaintiff need not exhaust administrative remedies prior to instituting a declaratory judgment action “if there is no administrative remedy available which can provide the relief sought, * * * or if resort to administrative remedies would be wholly futile.” Karches v. Cincinnati, 38 Ohio St.3d 12, 17 (1988), citing Kaufman v. Newburgh Hts., 26 Ohio St.2d 217 (1971), and Glover v. St. Louis-San Francisco Ry. Co., 393 U.S. 324 (1969). See also State ex rel. Teamsters Local Union No. 436 v. Bd. of Cty. Commrs., 132 Ohio St.3d 47, 2012-Ohio-1861, ¶ 24 (noting “parties need not pursue their administrative remedies if doing so would be a futile or a vain act“). Additional exceptions to the doctrine of exhaustion of administrative remedies include if the available remedy is onerous or unusually expensive, or if the plaintiff is contesting the
{¶ 25} Here, appellants assert they need not exhaust their administrative remedies because two of the foregoing exceptions apply: first, because appellees have taken a definitive position regarding the ERMs in the OVFCC Litigation, pursuing administrative avenues for relief would be wholly futile; and second, pursuing administrative remedies would be onerous and unusually expensive. We are not persuaded by these arguments for the following reasons.
{¶ 26} As discussed in the foregoing section, the OVFCC Litigation is currently pending before the Supreme Court. Unless and until that court issues a decision on the matter, the final position of appellees regarding the ERMs at issue in that case is unknown. In the absence of a final position on the part of appellees in that matter, appellants’ contention that pursuing administrative remedies would be a futile or vain act lacks merit.
{¶ 27} Likewise, appellants’ assertion that pursuing administrative remedies would be onerous and unusually expensive is unfounded. As the trial court observed, if appellants are truly concerned about expense, they are free to await the decision rendered by the Supreme Court in the OVFCC Litigation. Furthermore, the parties agree that at the time appellants filed their complaint in the within matter, appellants were already involved in active administrative proceedings with ODPS which raise the same issues as those raised in this matter. Thus, as the trial court aptly pointed out, it is not the pursuit of administrative remedies which will result in onerous and unusual expense for appellants; rather, it is the pursuit of the instant action which will do so.
{¶ 28} Based on the foregoing, the trial court‘s conclusion that appellants failed to exhaust their administrative remedies prior to filing their claim for declaratory judgment and that none of the exceptions to the exhaustion doctrine applied in this case was not an abuse of discretion.
{¶ 29} In summation, the trial court did not abuse its discretion when it found the claims of appellants were premature, not ripe for review, and therefore not justiciable. Neither did the trial court abuse its discretion when it found appellants’ claims were subject to dismissal for failure to exhaust administrative remedies. Therefore, it was not
IV. Disposition
{¶ 30} For the foregoing reasons, we find the trial court did not err in dismissing appellants’ claims for declaratory relief and injunctive relief. Accordingly, we overrule appellants’ sole assignment of error and affirm the judgment of the Franklin County Court of Common Pleas.
Judgment affirmed.
SADLER, P.J., and DORRIAN, J., concur.