Two weeks ago we wrote that the Ohio Supreme Court’s decision in State v. Clayborn may be a preview as to the Court’s willingness to strike down the Adam Walsh Act on ex post facto grounds.
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Ohio Supreme Court tips hand on sex offender classification law?
Thursday, May 20th, 2010Today’s ruling from the Ohio Supreme Court in State v. Clayborn, 2010-Ohio-2123 [PDF] may offer some insight into whether the Court will strike down the Adam Walsh Act, which reclassified sex offenders and in many cases extended indefinitely their reporting or registration requirements.
The issue in Clayborn was simply the amount of time in which an offender who is classified under the Adam Walsh Act has to appeal. Appellate Rule 4 states that in a criminal case, a party has 30 days after entry of judgment to appeal. But in a civil case, a party has up to 30 days after being served with notice of the entry of judgment. In other words, in a civil case if the clerk fails to serve notice of the judgment under Civ.R. 58(B), the appeal time is extended, but in a civil case it’s not. The Court held that sex offender classifications under the Adam Walsh Act can only be appealed under the more stringent criminal rule, not the more lenient civil rule.
What does this have to do with the validity of the Act itself? Good question. The Adam Walsh Act, also known as R.C. Chapter 2950, required the state to re-classify all existing sex offenders into one of three new tiers. The reporting requirements for each tier were significantly more stringent than the prior reporting requirements. For example, an offender who had been convicted of a sexual battery may have been previously classified as a sexual offender and ordered to register annually for ten years. Under the Adam Walsh Act, that person (so long as they were still within that ten-year notification period) would be classified as a Tier III offender and would have to register every 90 days for life.
Many offenders have challenged the law as unconstitutional. A variety of theories are usually trotted out, including the separation of powers doctrine, equal protection, double jeopardy, and plea-bargain-as-contract. Particularly relevant here, though, is that the petitioners usually argue that the Adam Walsh Act violates the prohibition on retroactive laws in the Ohio Constitution (Article II, Section 28) or the ex post facto clause in the U.S. Constitution (Article I, Sections 9-10).
To my knowledge, all Ohio appellate courts have rejected these arguments to date. They tend to rely on the 1998 Ohio Supreme Court case of State v. Cook (83 Ohio St.3d 404), in which the Court approved the sex offender classification law enacted in 1997, known as Megan’s Law. The Cook Court held, among other things, that the sex offender law was a “merely remedial” law, and not a “substantive” law. The Court explained that “the General Assembly’s purpose behind R.C. Chapter 2950 is to promote public safety and bolster the public’s confidence in Ohio’s criminal and mental health systems,” and further found that “[t]he statute is absolutely devoid of any language indicating an intent to punish.” As directly and bluntly as possible, the Court said that “R.C. Chapter 2950, on its face, clearly is not punitive.”
“Merely remedial” and “not punitive” are other ways of saying “civil, not criminal.” In other words, the Cook Court’s approval of the classification system is based on a finding that the sex offender registration was a civil statute, not a criminal statute.
The significance of the Clayborn holding should be evident: the Court has now said, at least for purposes of protecting appellate rights, that the Adam Walsh Act must be treated as a criminal statute, not a civil statute.
Challenges to the Adam Walsh Act are pending before the Court right now. In November, for example, the Court heard argument in In re: Darian J. Smith, in which the petitioner contested the validity of the Adam Walsh Act on ex post facto and retroactivity grounds (docket available here). The decision in Clayton may indicate a tendency to strike down the Adam Walsh Act, or at least its retroactive application.
Sixth Circuit: Victoria's Secret trademark "tarnished" by association with sex
Thursday, May 20th, 2010The Enquirer reports that the Sixth Circuit has ruled against the proprietor of a sex shop formerly named Victor’s Secret in a trademark tarnishment case brought by lingerie boutique Victoria’s Secret. The court found that the similarity of the names was likely to lead to “unfavorable sexual associations” for Victoria’s Secret. I’m not joking.
The case has an interesting procedural history. A man saw an ad for Victor’s Secret in a local paper, “was offended by what he perceived to be an attempt to use a reputable company’s trademark to promote the sale of unwholesome, tawdry merchandise,” and sent a copy of the ad to Victoria’s Secret. Litigation ensued, and the Supreme Court in 2006 determined that the lower courts had applied the incorrect standard of review in addressing whether Victoria’s Secret had been harmed. (Specifically, the Court held that only actual dilution by tarnishment was actionable under the Federal Trademark Dilution Act of 1995.)
While the case was still pending, Congress updated the trademark law to overrule the Supreme Court, adding a new claim under which a trademark owner could recover for likelihood of dilution by tarnishment. Under this new cause of action, the owner of a trademark can obtain an injunction or damages if it is likely that a new mark will harm the reputation of a senior mark, and the two marks are associated with each other due to their similarity.
The case was remanded to the district court, which held that it was indeed likely that people would associate Victor’s Secret with Victoria’s Secret due to their similarity, and that Victoria’s Secret’s reputation would be harmed as a result. The grounds for the ruling was that the association with Victor’s Secret was likely to cross that fine line between “sexy and playful” (as Victoria’s Secret described itself) and “sexually explicit” (as Victor’s Secret concededly was).
Yesterday the court of appeals affirmed, holding that “the [updated trademark] Act creates a kind of rebuttable presumption, or at least a very strong inference, that a new mark used to sell sex related products is likely to tarnish a famous mark if there is a clear semantic association between the two,” and that Victor’s Secret failed to rebut that presumption in this case. One judge concurred in the judgment but disagreed that the updated trademark act created a presumption — instead, he would call it simply an “inference.” The third judge dissented, observing that the updated act contains no language at all regarding any presumptions, and would have held that the single incident of association is not sufficient to create a cause of action.
Aside from the obvious problem of the Sixth Circuit creating a presumption where a statute contains none (actually, query whether it is indeed a presumption or an inference; how will district courts interpret this holding?), isn’t this a difficult decision to justify based simply on common sense? If Victoria’s Secret can obtain an injunction because of an association with sex, where will it end? Could a burger joint named McDuffy’s be enjoined if its food was too fatty, or its service too slow? This decision seems to create a slippery slope for courts with respect to the rights of junior mark holders.
On the other hand, perhaps this is a lesson in lawyering. Both the district court and the court of appeals based their decisions in part on the fact that Victor’s Secret failed to present any evidence that the two marks were not associated, or that Victoria’s Secret would not be harmed. Maybe the take-away in this case is simply that even when a claim appears absurd on its face, it still must be defended aggressively.
The Sixth Circuit decision is here [PDF]; the district court’s decision can be found here.
Victor’s Secret, for what it’s worth, plans to seek an en banc rehearing or to petition the Supreme Court for certiorari.
First District upholds contempt sanctions for violation of non-compete agreement
Thursday, May 6th, 2010In yesterday’s decision in Mitchell’s Salon & Day Spa v. Bustle, 2010-Ohio-1880 [PDF], the First District affirmed a trial court’s imposition of sanctions for violation of a non-compete clause and a court order which essentially incorporated that non-compete. Interstingly, a majority of the panel approved both a disgorgement of profits and an extension of the non-compete term.
When Michael Bustle started working as a hairstylist at Michael’s in 1995, he signed an agreement which included a one-year non-compete clause. He left in August 2007 and rented a booth at a competing salon. Michaels sued Bustle several months later, after noticing that his clients did not return. The parties agreed to a settlement under which Bustle would not provide any hair styling or hair care treatment for one year — that is, Bustle essentially agreed to abide by his non-compete clause — and the trial court journalized an entry incorporating their agreement.
After Bustle’s customers still did not return, Michaels hired a private investigator to determine whether Bustle was violating the court’s order. After a seven-month investigation the PI determined that Bustle was still providing the prohibited services, and Michaels filed a motion for contempt.
At the contempt hearing, Bustle admitted to providing prohibited services to 180 former Michaels clients and had profited over $37,000 in nine months of doing so. Testimony from Michaels revealted that its lost profits for the same work would have been about twice as much, and that it had incurred about $15,000 in attorney’s fees and about $52,000 in PI fees. The trial court found Bustle in contempt, awarded damages and costs totaling about $140,000 to Michaels, and enjoined Bustle from competing for an additional 11 months.
On appeal, the First District rejected Bustle’s arguments that the agreed order did not comply with Rule 65 (because Bustle agreed to it, he had no cause to complain — somewhat similar to invited error, if any error) and that Michaels waited too long to pursue its contempt motion (the court found the time to be reasonable due to the necessary investigation).
On the issue of whether Michaels was awarded a double recovery by virtue of a disgorgement of profits and an extended non-compete term, the court explained that in a contempt case, the court has power to both coerce compliance with the court’s order, and to compensate the the party injured by the contempt. By disgorging the profits and awarding the costs to Michaels in addition to extending the non-compete term, the First District said, the parties were merely put back in the position that they would have been in if there had been no contempt. As a result, there was no double recovery.
Judge Hendon disagreed on the double recovery issue. Because the non-compete period has now expired, however, and cannot be undone, she concurred in the judgment.
First District on Iqbal/Twombly
Friday, April 9th, 2010We have covered Iqbal and Twombly several times in this space (see here, here, here, and here). Briefly, those decisions impose a “plausibility” standard on allegations in a complaint; if the facts pleaded are not plausible, the complaint is subject to dismissal under Civ.R. 12(b)(6). This is more onerous than the long-standing possibility or conceivability standard.
Earlier this week the First District cited Iqbal and Twombly [PDF] for what appears to be the first time, putting it in line with the Eighth and Ninth Districts as Ohio appellate courts which have adopted the heightened standard. To be sure, Ohio courts have consistently looked to federal case law for guidance in the interpretation of analogous rules, but Iqbal and Twombly were enough of a game changer to lead some to speculate that Ohio courts may demurr and retain the old standard.
Can a judge find a litigant in contempt by encouraging people to email the judge?
Thursday, April 8th, 2010The Hon. Robert Gettelman of the Northern District if Illinois says yes.
Kevin Trudeau, who is apparently an infomercial salesman and radio personality in Chicago, was a litigant in a civil case before Judge Gettelman. Trudeau urged his listeners to email the judge and to encourage the judge to rule in Trudeau’s favor. After receiving hundreds of messages, Gettelman found Trudeau in contempt and sentenced him to 30 days in jail. The Seventh Circuit stayed the sentence while it considered whether the judge had the authority to punish conduct which occurred only in the court’s “virtual presence,” rather than in the courtroom; arguments were heard on April 7. The contempt order can be read here.
The Seventh Circuit is said to be concerned with the interesting question of whether Trudeau’s urging of the listeners can constitute contempt despite the fact that it did not occur in the judge’s direct presence. I am not familiar with the statutes, if any, which are applicable to Trudeau’s case, but under Ohio law it seems to me that the answer would be yes. R.C. 2705.01 permits “[a] court, or judge at chambers, may summarily punish a person guilty of misbehavior in the presence of or so near the court or judge as to obstruct the administration of justice.” It appears that as a practical matter the misbehavior was quite near the judge, as it showed up in his inbox and froze his BlackBerry. On the other hand, the misbehavior which manifested in the judge’s inbox was perhaps not Trudeau’s misbehavior at all, but rather that of his radio listeners. Although Trudeau surely asserted it, it is hard to see any First Amendment defense here.
From what I can tell, the crux of this case is only whether inconvenience of the email is punishable. The court is evidently not concerned with the propriety of a party asking others to lobby on his behalf, which may be contempt regardless of where it occurs; because judges frequently admonish litigants to avoid engaging in that sort of advocacy, such action could be a violation of a direct court order, and therefore surely punishable.
In any event, this is just yet another example of the confluence of electronic media and traditional notions of justice. We have seen this pop up several times recently, including service of an injunction and/or CIA surveillance through Twitter, trademark infringement claims in online advertising, the Supreme Court prohibiting YouTube coverage of the Prop 8 trial, and more.
Ohio Supreme Court: employer intentional tort statute is constitutional
Tuesday, March 23rd, 2010In a pair of opinions released today, the Ohio Supreme Court held that the employer intentional tort statute, R.C. 2745.01, does not violate the right to a jury trial or access to courts, the separation-of-powers doctrine, the right to due process of law, or the right to equal protection under the laws. The decisions are perhaps most interesting for their discussion of the legislative history of employer tort law and worker’s comp law, as well as the Court’s general policy statements on the role of the legislative and judicial branches.
In reaching its conclusion that the statute was facially constitutional, the Court relied in part on the statute’s legislative history, explaining that it “embodies the General Assembly’s intent to significantly curtail an employee’s access to common-law damages for what we will call a ‘substantially certain’ employer intentional tort” — but also noted that the statute “does not abolish the tort entirely.”
The Court also reiterated its prior holding that “the legislative branch of government is ‘the ultimate arbiter of public policy’” and that “the legislature is entrusted with the power to continually refine Ohio’s laws to meet the needs of our citizens.” Furthermore, the Court wrote that “[i]t is not the role of the courts to second-guess the General Assembly’s policy choices,” including policy choices which “alter, revise, modify, or abolish the common law.”
As to the merits of the certified questions, the Court rejected the argument that the current version of R.C. 2745.01 was so similar to prior unconstitutional versions that stare decisis must apply to invalidate it. Instead, the current version differs in the required standard of proof and lacks several limitations on damages contained in prior versions.
The cases are Stetter v. R.J. Corman Derailment Services, LLC, 2010-Ohio-1029 [PDF] and Kaminski v. Metal & Wire Products Company, 2010-Ohio-1027 [PDF].
Value of parcel determined by sale date closest to tax-lien date
Tuesday, March 16th, 2010In HIN, LLC v. Cuyahoga County Board of Revision, 2010-Ohio-687 [PDF], the Supreme Court was called upon to decide how to determine the taxable value of a parcel where two sales occur reasonably close to the tax-lien date.
The subject property was sold in an arms-length transaction in December 2003 for $4.79 million, and again in an arms-length transaction in April 2004 for $7.4 million. The increased value in the latter sale was attributable to a long-term lease signed by US Bank in December 2003–before the January 1, 2004 tax-lien date, but after the purchase price for the December 2003 sale was agreed upon. The BTA determined that the the December 2003 sale price was closer in time to the tax-lien date, and therefore more accurately reflected the value of the parcel, even though that sale price did not account for the value of the US Bank lease.
The Supreme Court agreed, holding that that R.C. 5317.03 mandates the use of the price closest in time to the tax-lien date as the true value of the parcel:
In determining the true value of any tract, lot, or parcel of real estate under this section, if such tract, lot, or parcel has been the subject of an arm’s length sale between a willing seller and a willing buyer within a reasonable length of time, either before or after the tax lien date, the auditor shall consider the sale price of such tract, lot, or parcel to be the true value for taxation purposes.
The provision, however is subject to two exceptions–the sale price shall not be considered the true value if the parcel “loses value due to some casualty,” or if “[a]n improvement is added to the property.” The Court does not address whether the US Bank lease should be considered an “improvement,” and if not, why not.
The Court also held that for purposes of R.C. 5713.03, the date of a sale is determined by the date on which the real property conveyance fee statement is filed in the auditor’s office.
Linkwrap
Thursday, March 11th, 2010A few links for a dreary Thursday morning:
- Civil Procedure & Federal Courts Blog points to a forthcoming article in the Lewis & Clark Law Review regarding the effect of Iqbal and Twombley, which we have previously blogged about. CP&FCB also noted a recent decision in the Northern District of Illinois which denied a motion to dismsis despite Iqbal‘s heightened pleading standard.
- The White House announced the nomination of Judge Kate O’Malley of the Northern District of Ohio for a vacant seat on the Federal Circuit. O’Malley has significant experience in patent cases.
- The Second Circuit ruled that the First-Amendemnt constittuionality of a zoning ordinance must be determined at the time the ordinance is challented, not at the time the ordinance is passed. The case is TJS of New York, Inc. v. Town of Smithtown [PDF].
- A few weeks old, but Jack Greiner at Graydon Head notes this interesting wired.com article about First Amendment protection for students.
Four-year statute of limitations to compel appropriation proceedings is not subject to tolling
Friday, February 26th, 2010In a 6-1 decision Thursday, the Ohio Supreme Court held that the four-year statute of limitations in R.C. 2305.09(E) barred property owners from seeking a writ of mandamus to compel appropriation proceedings against a park board, where the board had constructed a nature/walking trail on their property.
The majority rejected the property owners’ claim that the statute was tolled due to a continuing violation; rather than a continuing violation, the Court characterized the repeated use of the trail by the park board and the public as “the present effect of past violations” and explained that “a continuing violation is occasioned by continual unlawful acts, not continual ill effects from an original violation.” And the Court held that it was just one event — the construction of the trail — which constituted the violation in this case.
In dissent, Justice Pfeiffer argues that repeated entrance onto the property of the relators constituted repeated or continuing violations of their constitutional property rights. He likens it to a continuing trespass or nuisance, in which the statute of limitations is tolled, and he rejected the argument that a tolling rule would render the statute of limitations meaningless–it would still apply, for example, to temporary takings or true single-event takings, such as the installation of a utility line for which no repeated access is necessary.
The language of the statute at issue here does appear to favor the majority — R.C. 2305.09 provides that an action “[f]or relief on the grounds of a physical or regulatory taking of real property” “shall be brought within four years after the cause of action accrued.” But refusing to recognize a tolling rule also seems to run afoul of Section 19, Article I of the Ohio Constitution, which provides in part that “Private property shall ever be held inviolate . . . .” And it seems to me that even if the four years expired based on the initial installation of the trail, the subsequent installation of benches, parking areas, and so on would be new violations which would not rely on a tolling rule at all.
Almost as a side note, the Court observed in reference to prior litigation on similar issues that “[u]nlike other judgments . . . a declaratory judgment determines only what it actually decides and does not preclude other claims that might have been advanced.” Is this authorization from the Supreme Court to use a dec action to circumvent the normal rules of res judicata? It may be.
All in all, an unusual decision from the Court, and one which is not especially friendly to property rights.
The case is State ex rel. Nickoli v. Erie MetroParks, 2010-Ohio-606 [PDF].
